Thursday, November 6, 2008

Telecom Gets Creative

Can you hear me now?” We’ve all heard that Verizon expression more times than we’d care to.

Repetitiveness is a key driver of the strategy behind wireless providers like Verizon and AT&T’s media plans. That’s why no category spends more on measured media. The $5.4 billion, per TNS Media Intelligence, shelled out for ubiquitous ads last year that tell us brands like AT&T has “More bars in more places” far surpass most other segments put together.

AT&T, which rebranded itself from Cingular, spent $1.86 billion on media last year, per Nielsen Monitor-Plus. While Verizon wasn’t too far off at $1.43 billion. Sprint Nextel was third at $988 million. After that the drop off is steep with T-Mobile doling out $500 million and Alltel budgeting for $200 million.

Why so much money? “Repetition drives memorability,” says Roger Entner, senior vice president of the communications sector for Nielsen IAG. “You need to hammer it home over and over again.”

Every year up to 20 million people are changing carriers, says Entner. “It’s an intensely competitive industry. The pool of subscribers that is up for grabs is huge. A small difference in the effectiveness of the advertising can have a massive impact.”

What’s more, the landscape keeps shifting. One day, it’s “all you can eat” data plans, the next it’s the LG Chocolate phone and then its AT&T’s iPhone. “They need economies of scale to spread their message,” says Entner.

Products Help to Differentiate
Some brands, such as Virgin Mobile, Tracfone and MetroPCS, are using creativity to gain an edge in this competitive space.

Virgin Mobile, for one, has differentiated itself by leveraging its heritage as a music retailer. It created the Virgin Mobile Fest. Unlike some of the other concerts put on by challenger brands, Virgin’s concerts are the real deal. This past year, the show was held at the Pimilco Race Course in Baltimore August 9-10. Acts included the Foo Fighters, Bob Dylan, Iggy and the Stooges, Kanye West and Stone Temple Pilots.

The thousands in attendance took refuge, during the festival, in three domes. Two were sponsored by Kyocera and one by Dell. Within the Kyocera “recharge dome” consumers received co-branded bamboo fans and towels as well as sunscreen.

Virgin gave its VIPs a pack that included a concert branded shirt and backpack. “We try and surprise them with Virgin giveaways,” says Laura Jordan, director of events for the Virgin Mobile Festival. “When you give them a tube of sunscreen when they’re freaking out because they forgot to bring it, they think ‘wow, they thought of me.’”

Most of the items Virgin selects “are to remind concert goers of their experience,” Jordan says. “We see people bringing back the towels we did last year or the fans we gave out.”

While Virgin is never going to spend a billion on ads, the festival and promotional products distributed at it “is more a sticky experience than a traditional media play,” Jordan says. “People have positive associations with the brand because of the experience they had. If you come up with something innovative that they will hang on to, it becomes viral in nature.”

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