The Tech Side of Marketing

A funny thing happened to the Cable & Telecommunications Association for Marketing Summit on its way to Seattle last week: The marketing conference became a tech show. Indeed, for the first time ever, a majority of the panels at the annual marketing confab focused on computers or high-tech companies. And Dick Green, president and CEO of CableLabs, won CTAM’s Chairman’s Award for marketing. So the message is clear: cable marketers must master the art — and science — of technology in order to sell new products. From high-definition television to video-on-demand, the high-tech and cable industries are colliding, especially since cable controls a majority of the nation’s high-speed data subscribers. At the same time, cable marketers fear totally embracing technology, thinking that if they give it too much weight, it could surpass cable altogether. At the CTAM Summit last week, Microsoft Corp. announced a new interactive program guide — the very cornerstone that provides access to and control of all cable content. Dell said it is positioning itself as the hub of the digital household. And IBM has claimed and successfully exploited the “on-demand” tag line around the world for years now. Should cable operators worry about these high-tech companies as competitors? The tech companies say no. They insist they want to partner with cable operators by providing them with new tools to compete with satellite providers, phone companies, even overbuilders. In essence, they suggest, partnering with big tech means cable marketing gets a whole lot better. Microsoft says it will help cable operators provide a robust guide and software that will leverage the basic cable set-top box to offer video-on-demand, among other things. (Comcast and Time Warner Cable announced last week that they would test this new guide, which licenses software technology from Gemstar-TV Guide.) Dell claims that its aggressive advertising will help sell an array of digital products throughout the home, all of which can use a cable high-speed connection to flourish. And IBM, well, it’s looking to provide an assist to any cable operator that’s stumped on how to sell complex products. Still, cable operators are skeptical. Joe Rooney, SVP of marketing for Cox Communications, quipped that Microsoft’s IPG tests are the beginning of its attempt to take over the cable world. After all, the software giant has been trying to break into the cable business for years. Remember Ultimate TV? “They’ve got more money than God, and they’re very patient,” Rooney said. Rooney’s quip encapsulates the undercurrent at last week’s CTAM Summit. Marketers know they must sell technology as part of the cable product but they might not trust it just yet. For instance, RealNetworks provides cable content, music and video games to more than a million Internet subscribers. Consumers can sign up for its audio and digital services on the Web anywhere, anytime — even via a digital subscriber line provided by a competing telephone company. And Rob Glaser, chairman and CEO of RealNetworks, warned at a panel Tuesday that telephone companies surpassed MSOs with the highest number of international high-speed subs last year. With DSL equipment and service costs dropping worldwide, it’s only a matter of time until cable loses its hold on the U.S. high-speed data market, Glaser added. That’s where services such as RealNetworks can help rather than hinder, he insisted. Cable can tier broadband services the same way it does cable networks, giving consumers more choice and operators more profit. Cable can also use local avails to sell its own high-tech products such as high-speed modems. Since most subscribers connect to RealNetworks through their high-speed cable modems nationwide, the tech company insists that it partners with MSOs rather than competing against them, Glaser said. Unfortunately, Glaser also said the words that make cable operators flinch: “With the PC becoming the hub for multiroom entertainment…cable has an opportunity to play a defining role.” Operators have always wanted it the other way around, positioning themselves as the hub not just the data pipe. Michael George, Dell’s chief marketing officer, also sees the PC as running the show. Dell is “trying to be the center of the digital universe,” he said. Cable has been a big help in this effort. About 63% of all U.S. broadband consumers use cable modems to connect to the Internet, according to a CTAM study announced last week. And cable has helped spread Dell’s message. Dell buys a lot of time on broadcast and cable because, George noted, its message must be ubiquitous or else it just doesn’t work. Advice like this seemed to resonate throughout the crowd. Despite the battle for control over the digital home, cable marketers can learn from these tech guys. George emphasized the need to make all marketing simple. Dell’s sales increased 100% after launching commercials with the surfer dude selling complex computers, he said. Perhaps cable can find some similar easygoing goofball to simplify the bitrate speeds of high-speed data connections, the broadband waves of high-definition television, the streaming costs of video-on-demand and the hard-drive capacity for digital video recorders. Make things simple, reiterated Maureen McGuire, IBM’s VP of worldwide marketing management and integrated marketing communications. As Big Blue tried to pull itself out of the gutter in the 1990s, it realized the Internet was changing the world and it had to harness this change, McGuire said. So she hired Ogilvy & Mather Worldwide and out came some great ads that created a simple tag line for IBM — “eBusiness on demand.” Similar to Dell, IBM bought a massive amount of TV time to get the message across. “Television was absolutely crucial in the turnaround of the IBM brand,” McGuire said. While IBM has announced no plans to break into the cable business, Microsoft plugs away at doing just that. “We may have taken a few random swings at home plate,” said Microsoft CEO Steve Ballmer of Ultimate TV and of Microsoft’s failed cable investments over the past several years. But, he added, “we’re going to keep on taking more swings.”