Telecom – Advertising – Brief Article – Statistical Data Included

Todd Wasserman


HOT BUTTONS AT&T has a new corporate structure and will likely want to tell the world about it. WorldCom and Sprint also want to dial up ad initiatives.

The price-per-minute war that’s being waged among the largest telecommunications companies in the land has left all three of the big long-distance players–AT&T, WorldCom and Sprint-shell–shocked, and one, AT&T, is literally falling apart.

Perhaps the most noticeable casualties are the big-name spokespeople. AT&T’s Paul Reiser and MCI’s Michael Jordan/Looney Toons gang haven’t been on TV for months. Sprint, with spokeswoman Sela Ward, is the only combatant that has consistently rolled out new commercials.

Facing pressure from shareholders, AT&T announced a plan last October to split the company into four units: consumer, wireless, broadband and business. Whether each will be rebranded or get its own ad agency is an open question. AT&T’s overall spending was status quo in 2000 at $820 million, a 1 percent drop from 1999, according to Competitive Media Reporting.

AT&T’s strategy has been to put consumer and business under the umbrella “Boundless” tag, launched by Young & Rubicam, New York. AT&T launched a $50 million campaign for its business unit under that concept in January.

WorldCom is the product of some 50 mergers and acquisitions. It is generally acknowledged that CEO Bernie Ebbers is far more interested in crafting a reputation as a cost cutter than as a great marketer. Since the company took over MCI in 1998, it has done a 180-degree turn in the marketing arena. Some of the top marketers have left, and the company has cut ad spending across the board. WorldCom’s 2000 spending was about 39 percent below 1999. The company will be launching a new ad campaign later this year for MCI, via Messner Vetere Berger McNamee Schmetterer/EURO RSCG, New York.

WorldCom’s failed attempt to take over Sprint threw that company for a loop as well. Sprint also saw an exodus of top marketers, but it upped its spending by almost a third in 2000. It is now the only one of the Big Three that is still pitching its price-per-minute rates. The Sprint 1000 Nights plan has been acknowledged as a modest success by observers, and a sequel, Sprint 500, came out this month.

Wall Street analysts say there’s no growth in long-distance, forcing the Big Three to focus on other areas, including broadband, B to B and wireless. But for the former Baby Bells, any long-distance revenue is pure gravy.

Verizon, the entity created by the Bell Atlantic/GTE merger, has claimed success in offering long-distance in New York and is eyeing other states, including Massachusetts and Pennsylvania. As with other former Baby Bells, Verizon’s bid for national recognition has been a shot in the arm for the advertising business. This month, Verizon consolidated its $400 million account at Lowe, Lintas, New York.

SBC, which swallowed up Pacific Bell and Ameritech, among others, launched long-distance in Texas and is looking to expand. It raised its spending 55.5 percent in 2000, to $375 million.

The Baby Bells weren’t the only ones bidding for national attention. Qwest Communications oversaw a 274 percent jump in spending in 2000, to $80 million, but rejiggered its advertising message midyear. The company is working on a rebranding for this summer, via J. Walter Thompson, New York. Newcomer Global Crossing, meanwhile, spent just $12 million in 2000, but that was a 30-fold jump over the previous year.

Other new sources of business–and potential allies for the networks in the upfront this year–are the wireless firms. True, Wall Street analysts have found it’s not as fast-growing a business as they’d hoped. But that hasn’t stopped a turf war among AT&T Wireless (currently reviewing agencies for its $400 million account), Verizon Wireless and Cingular, as the combined BellSouth Mobility/SBC Wireless unit is known. Cingular burst on the scene with a purported $300 million campaign in late 2000 and Super Bowl placement, via BBDO, New York.

Despite the uncertain future of long-distance advertising, telecom seems likely to remain a thriving sector for the networks.

COPYRIGHT 2001 BPI Communications, Inc.

COPYRIGHT 2001 Gale Group

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