Now That Everyone Has a Triple Play …

With Joe Rooney, Chief Marketing Officer, Cox Communications

Joe Rooney gets credit as the first executive at a cable-system operator to successfully market a triple play of video, voice and Internet services. As chief marketing officer for Cox Communications, he’s also been responsible for precise tracking of results in marketing, while introducing a character called Digital Max that tries to be the customer’s “friend in the digital age.” Rooney, also chairman of the board of directors of the Cable & Telecommunications Association for Marketing, talked about the operator’s marketing tack with Multichannel News editor in chief Tom Steinert-Threlkeld. An edited transcript follows:

MCN: So, I guess the large question is, how does cable set itself apart at this point in its marketing from other triple-play suppliers?

Joe Rooney: Well, I think cable can still differentiate itself from other triple-play suppliers via the fact that we have an authentic triple play.

Probably 90% of cable customers nationwide can get a triple play from their [cable operator] while probably only about 5 to 10% of customers can get a true authentic triple play from a [telephone company].

MCN: Define what you mean by that.

JR: I mean all over one line, all installed by one installer, all on one bill.

MCN: The joint ventures between telephone companies and a satellite company do not present an authentic triple play?

JR: I don’t consider the idea that I’ve got a dish and [digital subscriber line] and a phone line to be really an authentic triple play. I think it is a stop-gap measure while they build out their networks. And I would probably do the same thing if I were in their shoes, but clearly, the integration of the build, the integration of the care experience, the installation experience, people that I know that have gone through something like that and customers who’ve come back to us from that situation have not raved about the experience.

MCN: So, from a marketing standpoint, how to take advantage of the 'authenticity’ of a triple play?

JR: We’ve got an advertising campaign that’s running now which sort of talks about the great new video service from the phone company, and then it shows the satellite dish in the back of the truck. And the consumer’s reaction is part of the hook at the end of the spot, but clearly, it is sort of a letdown to consumers when they call and find out, 'Oh, wait a second, I’ve got to put an ugly dish on my house? I could have done that years ago!’

And, 'Is this really you that’s doing this or is this a contractor for the satellite company to do this for me?’

MCN: From a marketing standpoint, this has gotten very character-driven, popular culture, almost, driven, the way you’re marketing this stuff. Your trusted digital friend is a guy named Digital Max and Time Warner [Cable] has a guy called Sir Charge. AT&T U-Verse has its everyman, called Bobby, Bobby Choice. What’s going on here?

JR: It’s harder and harder to break through the clutter. I mean a customer’s attention is hit by thousands of messages a day, whether it’s on TV or online, and so, I think what you see is marketers are looking for ways to cut through the clutter and get people’s attention and to have their brand stand out, and for us, Digital Max is a shortcut to understanding, 'Oh, this is a Cox message.’

Greater than 95% of our customers recognize him immediately.

MCN: You’ve surveyed that?

JR: Yes. We research every spot while it’s in creation. So we’re putting boards in front of consumers and having them help us make the spots better, and we did a lot of research on Digital Max and tried to find the sweet spot for his best use.

MCN: And what have you found?

JR: We’ve found that Digital Max is recognized because he starred in so many commercials for us and because we have this amazing ability to get our message across with our cross-channel advertising — inserting ads on an average of over 50 different cable networks has allowed us to communicate to our customers.

And research has shown us that he has to be a guide to consumers. We position that he’s not an employee. He’s a digital guy who really loves all things digital.

MCN: In the design, was it your intention that he looked like a Pixar character? The first time I saw him, he reminded me of Buzz Lightyear.

JR: Yes, we wanted him to appear to be modern and not cartoonish. We wanted him to be not-too-realistic though. So we spent a little bit of time, there were some earlier versions where he looked a little different, but we quickly got to this look and we’re very happy with him and no, he doesn’t have a dog or a girlfriend yet but it’s always possible that he could go through life changes and we could have some fun with that as well down the road.

MCN: And he could have his own series, too, right?

JR: Yes.

MCN: On the Travel Channel. [Laughs.] Whose marketing do you also see as standing out?

JR: Clearly, the Comcast advertising has come a long way under Marvin Davis. I think that everything from the Slowskys to the Comcastic campaign, overall, have been a terrific way for them to stand out and differentiate.

I like the flexibility that the Comcastic campaign color schemes, and so on, gives them to work from. And I’m very impressed with the results out of Cablevision [Systems]. They weren’t first to bundle, but they are among the best bundlers in the industry. They have done an awesome job. Their digital iO campaign has clearly worked for them, and I think that their results say a lot.

MCN: Who of the competitors does good marketing? And why?

JR: You know I hate to say good things about my competitors, first off. But yes, I guess I would probably start with Verizon Wireless. I think that they are a little bit of an arm’s-length competitor at this point, but clearly, they have differentiated their network and have the power of first-in, with the network messaging working for them.

MCN: The 'Can you hear me now?’ slogan seems to work pretty effectively.

JR: Yes, at first it seemed to be the annoying thing that people said when they lost signal, but it’s really turned into somewhat of an iconic phrase and they have a character who you instantly recognize.

He doesn’t have to say anything. But he’s instantly recognized and you know what brand you’re talking about. And the brand promise is very simple and straightforward around 'it’s the network.’

So, I would have to say they did a good job.

MCN: What else?

JR: I do worry that my customers are getting hit with so many half-truths by my competitors that it is very frustrating.

MCN: Which half-truths do you find most frustrating?

JR: Half-truths about product performance. About hundreds of channels of high-def or about faster speeds than cable, especially when it’s not true.

It’d be one thing to talk about it if it were true, but when you go to their Web site and they say, well, that’s not really true yet, or that’s not true but I’m glad you’re here, go ahead and sign up, you know? That’s the frustrating thing.

MCN: When did the world become such that advertising and litigation became so intertwined?

JR: This is new for our industry to be in such a competitive environment. We’ve had satellite competition for a dozen years or more, but it’s a first for us to have true bundled competitors.

So we’re both a little bit new to the game, and I think we’re trying to get it right. Certainly, we are on the cable side.

MCN: Is there any way you can quantify what the legal bills have started to become and what percentage of overall advertising budget could be attributed to the litigation from the competitive actions?

JR: No, to do that right … you’d probably have to go in and look at the regulatory side as well and if you add up cable’s legal bills related to advertising complaints and regulatory issues, I’m sure it does add up to some coin.

MCN: Guerilla marketing has come on very strong in the last couple of years. How do you figure out what guerilla marketing tactics to pursue and what works?

JR: It’s the marketer’s job to know what works and what doesn’t work, and it’s the marketer’s job to use scientific methods of measuring marketing effectiveness. So, we measure our costs per lead and our cost per connect across all channels.

MCN: Cost per connect meaning each new revenue-generating unit being generated?

JR: Yes, right. So the marketing costs that result in a new RGU (revenue-generating) connect. For us, our brand is very recognized as an important brand in our local markets. And so we don’t do as much brand-related guerilla marketing.

We’re probably more aggressive in our competitive marketing strategy. One of the strategies is, let’s get everybody into a triple play. Because once they’re in a triple play, they don’t churn.

And once they’re in a triple play, they become invisible to the [telephone company]. The [phone company] is used to having a phone-relationship with homes. When they no longer have that phone relationship, they’re not sure if that’s a vacant home of if that’s a wireless-only home. Or what the situation is there.

MCN: They can’t track it any longer.

JR: They can’t track it any longer. They have a harder time selling in their DSL product because they tie it to wireline phone.

MCN: They can’t even call it because they might not have it in their directory?

JR: Right.

MCN: How do you keep the bundling fresh and accentuate any differentiation that’s still to come?

JR: Direct-response marketing. We are very aggressive at direct-mail marketing, ecommerce marketing, direct response television as well as e-mail.

It’s a bit unsexy and boring but it’s extremely effective and extremely measurable, and it helps us figure out which offers had the greatest response rate, which campaigns had the greatest retention rate.

We try to measure it every way you can.

MCN: What kind of changes in marketing approaches do you think we’ll see over the next year or two as competition intensifies?

JR: Through CTAM we’ve created a marketing co-op for [cable operators] and we’ve participated in a number of cooperative marketing efforts.

We’ve been working for about six years on movers. If you move from this apartment to the bigger apartment downstairs, move across the country, we want to keep people in the family, in the cable family, and so operators have an opportunity to help each other with movers, and to hand-off movers from [one operator] to [another].

We’ve been doing that through the cable movers’ hotline for many years and we’ve been testing a direct-mail execution behind that with the customer’s permission.

We’re also looking at other ways that we could have a bigger impact.

We have had over 100,000 calls per month through the cable movers’ hotline. Over 100,000 calls a month is not insignificant.

MCN: What is next?

JR: I think you’ll see cooperative marketing around high definition. We’re also working on the digital transition. Most people are confused by the digital transition and they’re not really sure what’s going to happen and what cable’s role is.

I think our message is that we won’t leave customers behind. That even if overnight, analog signals go away and are replaced with digital signals, they can always count on the cable operator to take care of them.

MCN: How will cable operators differentiate themselves over the next year or two?

JR: Clearly, operators need to stand for something. And they can’t afford to be branded by their competitor.

We need to put a stake in the ground and decide what we stand for on our own. Clearly at Cox, we [say we] are the friend in the digital age. We are the trusted provider. We are the J.D. Power [& Associates] honoree, and we have the ability to be that guide, that helping hand for the customer, and that is differentiating.

We’re not saying it’s the network, and just connect up to it and good luck.