We’ve all seen the ads: “Raising the Bar.” “Can you hear me now?” “Nextel. Done.” “Get More.”
Then again, with the wireless industry spending billions of dollars each year on advertising, how could we not have seen them?
According to Advertising Age, the telecom industry was the eighth-largest domestic spender on advertising in 2003 with nearly $5.8 billion spent on consumer advertising. Advertising Age is a sister publication to RCR Wireless News.
Six telecommunications companies were ranked among the trade magazine’s top 100 advertisers in 2003, led by Verizon Communications Inc. at No. 11 on the list at more than $1.6 billion. Cingular Wireless L.L.C.’s parent company SBC Communications Inc. was No. 15 on the list at $1.5 billion; followed by Sprint Corp. at No. 30 with $1.1 billion; AT&T Wireless Services Inc. at No. 31 with $1 billion; T-Mobile USA Inc. parent company Deutsche Telekom AG at No. 63 with $517 million; and Nextel Communications Inc. at No. 79 with $423 million.
That spending trend showed no signs of slowing down last year with Verizon Communications leading Advertising Age’s top 200 mega-brands’ spending for the first half of 2004 with more than $730 million in advertising spending-83 percent of the total spent on the company’s wireless division.
Weston Henderek, Current Analysis senior analyst for wireless services, noted that such spending is not surprising considering the highly competitive nature of the wireless industry.
“The industry has hit an inflection point where it’s not just about trying to lure new customers,” Henderek said. “Carriers are having to go after their competitors’ customers with advertisements explaining why they are a better choice.”
Henderek added that with operators rolling out more advanced services, he expects carrier advertising spending to remain robust.
“Carriers will need to explain to customers what their more-advanced networks can provide,” Henderek said. “You can’t just launch these services and expect consumers to understand why they should be spending more money for higher-speed networks. You have to explain the nitty-gritty details so they can see the value of advanced services.”
With so much money behind those campaigns, it’s of little surprise that many of those tag lines have made the cultural jump into everyday language or appeared as regular lines in television shows and movies. Verizon Wireless’ “Can you hear me now?” in particular seems to have become a favorite.
While telecom providers like to spread their message around different media to get maximum exposure, TV and radio continue to make up a majority of total spending. Media research firms report that more than 70 percent of total advertising spending by telecommunications companies are through TV and radio ads.
Verizon Wireless used TV for 90 percent of its media mix when it launched the “Can you hear me now?” campaign in early 2002, with the remaining 10 percent used on print media. The move proved successful, as a brand awareness study conducted by Taylor Nelson in July 2002 found that 82 percent of respondents were aware of the campaign.
Cingular, which surpassed Verizon Wireless as the industry’s largest operator following its acquisition of AWS last October, wasted little time in rolling out its new branding campaign featuring AWS’ previously used “Raising the bar” tagline and newly integrated orange and blue colors. The campaign, which was created by BBDO Atlanta and BBDO New York, was splashed across national television, newspapers, radio and the Internet.
Cingular spent a reported $300 million during the fourth quarter of last year on marketing efforts, with most concentrated in the final two months of the year, following its acquisition of AWS. Cingular noted in recent government filings that selling expenses, which included sales, marketing, advertising and commission expenses, increased 33.5 percent year-over-year to $873 million in 2004.
Industry analysts have noted that the campaign’s focus on network quality and coverage has helped Cingular post industry-leading customer growth numbers since it was launched.
Other operators have seen a more organic mutation of their advertising plans.
T-Mobile USA has had success recently with its Sidekick II device using a slew of youthful celebrities to target the 12-to-24 age demographic. The carrier received additional attention when one of those celebrities, Paris Hilton, had her Sidekick account hacked into and contact list spread across the Internet.
In addition to being remembered, most advertising seems to be getting across the desired message. A recent survey of teens by the Alloy Inc. showed that what carriers emphasize in their advertising is influencing how people think about the carrier. The survey found that teens felt that Cingular appealed to people who were not sure how many minutes they used each month, which is what the carrier’s Rollover offering attempts to address. Verizon Wireless was tied to people most interested in reception and coverage-“Can you hear me now?”-while T-Mobile USA appealed to those who want to talk anytime-“Get more.”
While the industry’s larger operators focus more on TV advertisements, smaller, regional players are finding success with other media outlets. Leap Wireless International Inc. noted that the recently launched rebranding effort for its Cricket service would focus predominately on radio advertising. Al Moschner, Leap’s chief marketing officer, noted that radio is an inexpensive and underused media by the telecom industry and fits in well with Leap’s continued emphasis on keeping operating and customer acquisition costs low.
“We have limited resources and feel we can control a particular type of media by using radio advertising,” Moschner explained.
