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Davis's Rules of Marketing

Most cable people aren't familiar with Marvin Davis, but all of them have surely seen his handiwork, which includes the Verizon Wireless “Can you hear me now?” ad campaign. Davis has been running under the radar since leaving Verizon to join Comcast Corp. as senior vice president of marketing in February. His biggest move so far was shifting a $50-million Comcast advertising account to Goodby, Silverstein & Partners. National editor Steve Donohue caught up with Davis recently to get his take on Comcast's marketing strategy. An edited transcript follows:

MCN: What do you think of Cablevision System Corp.'s strategy of steeply discounting the triple-play bundle, charging just $90 a month if you take all three products?

Davis: I think that the idea of going to market with a bundle that has products that deliver value in general is a good approach. As far as how deep that discount needs to be, right now that's a question. Our view is we're just kind of watching it, and we'll see what happens.

MCN: It must be a little nerve-racking joining Comcast at a time that you face an onslaught from EchoStar Communications Corp. and DirecTV Inc., along with competition on the video side looming from Verizon Communications Inc. and SBC Communications Inc.

DAVIS: Actually that was one of the things that most attracted me to the company, is that with all that competition, I think we're in the best position to win.

MCN: Let's take a look at how the market might look a few years from now, assuming that the Verizons and SBCs of the world are able to widely deploy video, and that cable operators will come up with a solution for wireless phone. If it all comes down to multiple carriers offering a four-play of sorts, will consumers just pick whichever carrier has the best deal?

DAVIS: I don't think it's just going to come down to price. If it came down just to price we wouldn't have the cusp we've had to date. We believe if we offer customers a variety of features and services on platforms the way they want it, they'll pay for it.

While price is part of that equation, it's clear across all of these services that there's a segment of folks who think, 'I see the quality is there, and I will pay what I think is a fair price for it, and that does not have to be the lowest price.'

MCN: Will Comcast pick up telephone subscribers but lose video customers at the same time to the telephone companies?

DAVIS: We definitely will pick up phone subscribers, but we still believe there's an opportunity for us to maintain our video base and potentially grow it.

MCN: How important is adding wireless phone to the bundle for Comcast?

DAVIS: Wireless is a component, but there are a great majority of customers who still like to have some separation as far as whether they buy it all from one person or another. I think wireless is an ingredient. The degree to how important it is for what we're trying to accomplish, that's still being assessed.

MCN: Are you helping Comcast form its wireless phone strategy?

DAVIS: We're participating right now in this non-exclusive industry consortium with the other MSOs, including Time Warner [Cable] and Cox [Communications Inc.], to evaluate various wireless options. And from time to time, I may contribute to that. But we don't have any major developments expected right now or in the near term.

MCN: How will your background in wireless phone help Comcast?

DAVIS: I think there are an enormous number of similarities between the cable industry and wireless. Cable is today where wireless was maybe five or seven years ago, and had to go from what had been not as competitive of an environment to a hypercompetitive environment — recognizing that as a huge category of growth starts to flatten the need to get more focused on product differentiation, and then also retaining existing customers.

If you look at what happened in the wireless industry, as far as churn rate, across the board they've gone down considerably over the last four or five years. And I think my experiences in going through that evolution are very appropriate for what we need to do today at Comcast.

MCN: Where do you think Comcast can improve its marketing?

DAVIS: We have an opportunity to be more consistent in how we deliver our product and marketing messages. And so getting more consistency in our positioning and our tone in how we describe our products and services, that's probably the biggest opportunity for us. And we're all looking at ways to better improve our retention efforts.

MCN: Would a more centralized approach to marketing help improve consistency?

DAVIS: Somewhat. That's not the full solution. Centralization helps in getting the consistency piece and the positioning and the look and feel. But local marketing is still an important part of how we go to market. We actually think it's a competitive advantage. And it is not part of the strategy to go away from that. As long as we're able to get consistency, it really doesn't matter if it's delivered to the customer locally or nationally.

MCN: Could you give me a glimpse of what the new spots from Goodby, Silverstein will look like?

DAVIS: Not at this time. We've got a lot of spots under development and in production, and you'll see those in markets probably in the third quarter.

MCN: DirecTV spends up to $500,000 per commercial to shoot live-action spots. Will it take increased spending from Comcast to compete with DirecTV and EchoStar in terms of the production quality and the media spend?

DAVIS: From a production quality standpoint, they're going to be high-quality spots. You don't go out and hire a tier-one agency like this and not expect to produce some pretty high-quality spots. We don't benchmark what other competitors spend on production.

And from a media standpoint, with the entire industry heating up, everyone is working harder to get their message out there. We look at our share of voice on a continuing basis, and as the leader, we've got to make sure that we're getting our message out there too. If we determine that we need to spend more to do that, then we will.

MCN: Do you think Comcast needs to buy more broadcast spots to reach new customers?

DAVIS: Yeah, I do. When you look who needs to hear our message, it's all households, so we need to make sure our media plan has an element in it that reaches them, and broadcast is one of the most effective ways to do that.

MCN: Going forward, could we expect Comcast to primarily market the bundle or the individual products?

DAVIS: Our focus is to market the services the way people want to buy them. While there are a lot of folks who are looking for the bundle — and we'll make sure that we have something for them — there are still quite a few consumers who are making those decisions on an individual product basis. So it will be a mix.

MCN: Could you break down the number of Comcast commercials that tout the bundle versus spots for individual products like Comcast Online or digital cable?

DAVIS: I can't really give you a percentage, but I will tell you that right now a majority of it is on single-line products. With voice just rolling out, there are only a few markets where we can go with the full bundle. It's increasing, but it's still the bundle less so than the individual product marketing.

MCN: At Verizon Wireless, you had Test Man. Cox recently started using its own brand icon called Digital Max — an animated character. Could we expect anything like that from Comcast?

DAVIS: (Laughs)

MCN: Are you looking to repeat the 'Can You Hear Me Now?' campaign?

DAVIS: You've got to look at each brand opportunity — something unique to that situation. Even in that [Test Man campaign] we weren't solving for getting to an icon; we were solving for getting our message out there in a way that would make people just pause, and be able to relate to it. And the Test Man did that well for that industry at that time.

Looking at what we're trying to do for Comcast now, the agency isn't solving to come up with an icon; they're solving to come up with a message and a tone that delivers that. If there's an icon in there, so be it, but that is not what the [focus] is.

MCN: Are there benefits in having a national spokesperson in your spots, or even celebrity spokespeople?

DAVIS: I think for certain companies, especially when they're trying to quickly drive awareness and get an affiliation, spokespeople may work. I don't think that is the best approach for us right now.

MCN: Comcast and other operators have focused much of their efforts the last few years on selling new products like phone or high-speed data. Do you think Comcast needs to focus more on marketing to drive basic video subscriber growth and retention?

DAVIS: Yeah, I think we need to promote all of our products and services, and obviously video is a big part of that. While [high-speed data] has been a real success story for us — we expect the same thing to happen with Comcast Digital Voice — that does not mean that we won't continue to have a strong marketing effort behind our video product.

MCN: Would that include an anti-satellite message?

DAVIS: There are some key parts to our video service that matter to customers, and we want to make sure we get that message [across]. For instance, on-demand has been a strong success product for us. If you talk to customers who have it, they love it, and they're very loyal to it. And so we need to make sure that we're getting that message out to our customers, as well as to prospective customers so they understand the benefits that they can get with us that they may not be able to get with satellite providers.

I don't see it as going so much anti-satellite. Our mission is to make sure that if we believe we deliver our message with what we have and customers have a full understanding of that, versus their other alternative, that more of them are going to choose us.

MCN: In terms of the branding of your packages with names like silver, gold and bronze, will that strategy continue?

DAVIS: The strategy of being able to have different levels of packages to meet different customers [needs], that strategy will continue and will actually expand. We are looking at what's the best way to communicate that. But if we see an opportunity to improve that by looking at a different structure, that's something we'll make decisions on later.