Cablevision Systems Corp.’s latest ad campaign compares satellite owners to dogs. At Charter Communications Inc., comedian Dan Akyroyd, head of the “Dish Intervention Team,” stars in a series of spots in which he tells satellite owners, “The dish is the disease. We’re the cure.”
And nationwide, as part of the industry’s “Only Cable Can” effort, hundreds of cable systems are running commercials that tell consumers cable is the only way to get services such as local broadcast HDTV channels and video-on-demand.
After years of losing basic-cable subscribers to satellite rivals DirecTV Inc. and EchoStar Communications Corp., cable operators are taking off the gloves and shifting their marketing dollars to spots that knock satellite and telephone company competitors.
“We reserve the right to defend ourselves against competition, especially if they attack us or misrepresent themselves,” Adelphia Communications Corp. senior vice president of marketing Jim Matusoff said. Adelphia prefers to focus on positive messages in its ad campaigns, but the MSO has run negative spots in markets hit hardest by satellite competition, Matusoff said.
Comcast senior vice president of marketing and new products Andy Addis said a key driver behind cable’s increased focus on anti-satellite spots is the simple fact that there are fewer homes to pitch to that subscribe to neither cable nor satellite. Comcast needs to place more emphasis on recruiting DirecTV and EchoStar subscribers in order to sign up new customers, he said.
“Four years ago, if you looked at all the marketable nonsubscribers, maybe 20% of them were satellite [customers] and 80% of them were people that just weren’t multichannel-video buyers,” Addis said. “Today, it’s starting to approach 60-40, if not 50-50, which enables us to rationalize putting more aggressive dish win-back messages and offers in the marketplace.”
DirecTV and EchoStar counted 22.4 million customers combined at the end of the first quarter, with the DBS companies signing up an impressive 820,000 new customers during the period.
Time Warner Cable chief marketing officer Chuck Ellis said the MSO’s new ad campaigns focus on three key areas:
- Branding spots that tout Time Warner Cable’s bundle of services, ranging from high-speed data to digital video.
- Product-oriented commercials that tout new services, such as video on-demand, and contrast Time Warner products to satellite’s offerings.
- Subscriber-acquisition spots aimed at signing homes that haven’t subscribed to cable or satellite, and at winning back existing DBS customers.
Ellis emphasized that Time Warner and other MSOs need to increase the amount of money they spend on ad campaigns in order to compete effectively against DirecTV and EchoStar.
“In the video category, the industry in general has been dramatically outspent by DBS providers, DirecTV and EchoStar. Frankly I think that has been a greater part of the competitive struggle, have been just the absolute [ad-spending] weights,” Ellis said.
PREACHING TO CHOIR
Cable operators traditionally use about 25% of their local ad-sales inventory to run cross-channel promotions for services such as digital cable, video-on-demand, high-speed data and more recently, new Internet-protocol telephone services.
While it’s cheaper to run cross-channel spots than to buy local broadcast media, some cable executives say the industry has relied too much on running spots that only reach current customers — and operators need to invest more on outside media.
“Historically, we and all the other MSOs have done anti-satellite campaigns, predominantly aired via cross-channel inventory, so we’re kind of speaking to our own customer base,” Addis said.
“We’re going to be enhancing or increasing the aggressiveness of our general marketing communications in fairly short order, because we’re in a very competitive category, and the satellite guys are tough. So we’re going to respond in kind,” he said.
In addition to buying local broadcast spots, Comcast will spend more on print ads, radio spots, and billboard advertising, Addis said.
Comcast and other operators have derided satellite by pointing to shortcomings such as satellite’s inability to carry local HDTV channels; satellite signals that can be interrupted by rain or snow; and lengthy programming contracts that DBS customers must sign.
NATIONAL CAMPAIGNS
Major cable companies began running a series of national ads last year through an “Only Cable Can” initiative organized by the Cable & Telecommunications Association for Marketing. The spots, which run mostly on national cable networks, began running in November.
The key focus of the Only Cable Can campaign in 2004 has been to develop partnerships with consumer-electronics companies.
In March, eight major MSOs teamed up with Samsung Electronics America Inc. on an HDTV ad campaign tied to CBS’s coverage of the National Collegiate Athletic Association Men’s Basketball Tournament.
The spots, which were tailored for local operators, offered consumers who bought a Samsung HDTV and ordered a high-definition programming package from their local operator two $50 checks that could be used to help pay their cable bills.
Samsung and the MSOs pegged the value of the campaign at more than $10 million, including cash contributed by the manufacturer and cable companies for a media buy, in addition to cross-channel spots contributed by the operators.
CTAM officials wouldn’t disclose how many consumers responded to the offer, but Comcast and Time Warner Cable officials said they saw an increase in HDTV subscription sales in March, which they attributed in part to the campaign.
'ONLY CABLE CAN’
In June, CTAM announced a similar “Only Cable Can” deal with Panasonic Consumer Electronics, which encouraged consumers to buy a Panasonic HDTV and an HD cable-programming package before NBC’s HDTV coverage in August of the Summer Olympics in Athens.
One drawback of that campaign, which was also valued at more than $10 million, was that Olympics broadcaster NBC has an exclusive HDTV sponsorship deal with Panasonic rival Sony, and the Peacock wouldn’t allow the cable MSOs and Panasonic to run the Only Cable Can spots during programming likely to draw Olympics fans — NBC’s coverage of the U.S. Olympic Trials.
CTAM CEO Char Beales said the Only Cable Can campaign has been successful, noting that getting cable companies to team up on a campaign was one accomplishment.
“We were thrilled with our success because step one was proving that we could all work together, and we were all able to do that,” Beales said.
“I think you’ll see more in the fall as we take the campaign to the next level,” she added.
'CABLE CAN’ FALLS SHORT
Some cable executives say Only Cable Can has some shortcomings. Because each operator has unique product offerings and branding, packaging and pricing strategies, it’s difficult to come up with national spots that can be used on an industry-wide basis, they said.
“Because it’s creative by committee, it’s challenging to get a solid, hard-hitting message out into the marketplace that is universally applicable, given the variety of development in the product platforms,” said Charter Communications Inc. vice president of branding and creative services Greg Field.
“You’re drilling it down to the least common denominator,” added Field, who also pointed to Charter’s rollout of an all-digital network in Long Beach, Calif. — something no other operator has done.
While Charter has participated in the Only Cable Can HDTV campaigns with Samsung and Panasonic, the MSO hasn’t committed to future campaigns with the CTAM initiative.
“It’s on a case-by-case basis. We have to evaluate what’s best for Charter, versus the emotional need for everyone to jump on board,” Field said.
BRANDING ISSUES
Cable operators point to the ability to offer on-demand programming as a key competitive advantage over satellite. But since some operators market the technology differently — Time Warner calls it “I-Control,” while Comcast calls it “On Demand” — there may be some limitations in marketing VOD via national ad campaigns.
“I do think companies will always want to have their own brand names on their product, and there’s no problem with that,” Beales said. “I think the confusion comes in when you’re talking nationally through the consumer press, for example, if it’s called different things in different places.”
Insight Communications Co. senior vice president of marketing and communications Pamela Euler Halling, whose company brands the technology “Insight On Demand,” said she doesn’t like the term “video-on-demand.”
“Anything but video-on-demand,” Halling said. “We need to go out of our way to make sure that this is not something that our consumers or our customers see or hear, because it goes back to the nightmare I think we created with pay-per-view. I think video-on-demand, to me, doesn’t adequately describe the service and how powerful it is and how convenient it is for customers.”
NEGATIVE-AD RISKS
EchoStar drew first blood in the latest cable-vs.-satellite ad war, launching a “Stop Feeding the Cable Pig” campaign last fall, which showed pigs running through homes, stealing money from cable subscribers.
Deutsch Inc. CEO Donny Deutsch said there are some risks in negative advertising.
“I don’t think overwhelmingly negative advertising works in the long term, particularly if you’re not giving them the appropriate facts,” said Deutsch, who will give a keynote address at this week’s CTAM Summit in Boston.
“At the end of the day, if cable has a better offering, you know you can paint them as pigs, you can paint them as birds, you can paint them as dinosaurs, you know, they’ll win out,” Deutsch added.
Several cable executives emphasized that with today’s competitive environment, it’s essential that cable operators point out the shortcomings of satellite in ad campaigns. But it’s important to use humor in those spots, they said.
“It’s great when you can use Dan Aykroyd to do it with a wink and a smile, versus us going on air [which] can come across as mean-spirited,” said Field, referring to the “Dish Intervention Team” spots that McCann Worldgroup created for Charter. “When Dan does it it’s acceptable, at least in terms of listening to the message, and conducive in terms of saying it in a nice way.”
LOOK BACK AT TCI
Cable ads have changed dramatically since the early days of the industry, when operators had a monopoly on subscription television. Lela Cocoros, former head of communications at Tele-Communications Inc., said the focus of TCI’s early campaigns was on branding.
John Malone built TCI, which he later sold to AT&T Broadband, through many acquisitions, so the ads were designed to introduce subscribers to the company, Cocoros said.
In 1991, TCI hired Hal Riney & Partners, which had created Ronald Reagan’s famed “Morning in America” presidential-election campaign spots, to develop TCI’s first national ad campaign. The spots were tagged, “We’re taking television into tomorrow.”
Cocoros said the biggest difference about the early cable ad campaigns were marketing budgets, which pale in comparison to the money cable operators spend on ads today.
Even though there wasn’t competition from the sky in those days — DirecTV didn’t bow until 1996 — Cocoros said operators knew in the early 1990s that competition was on the way.
“We always recognized that there was going to be competition, and that’s why one of the things we did in the early 1990s was to start to solidify our relationship with customers,” Cocoros said.
