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Cable/Video

VOIP Marketeers Are Askin for It

SAN FRANCISCO -- The 2005 National Cable & Telecommunications Association (NCTA) National Show -- The VOIP business is still young, and it has some unpolished swagger about it. This was never more apparent than at a panel on cable VOIP marketing here Monday, when Pulver.com legal counsel Jonathan Askin filled in for his boss, Jeff Pulver.

Askin's remarks, which were mostly a criticism of VOIP marketing tactics, were kicked off with one honey of a disclaimer: “I want you to know that historically I come from the CLEC space, so more than knowing what works in marketing, I know sometimes what doesn’t work. I’m sort of the Schleprock of competitive telecommunications -- every time I get involved with a particular sector of the telecommunications industry, it takes a couple years, but it eventually tanks.”

After some folks walked out, Askin contrasted the cable operators’ somewhat conservative approach to VOIP marketing with the rest of the industry (see What's VOIP?). The cable execs who spoke before him -- executives from Cox Communications Inc. (NYSE: COX), Time Warner Cable, and Cablevision Systems Corp. (NYSE: CVC) -- uniformly pointed out that "soft selling" a customer on VOIP, while playing down the newness of the technology, was the way to go. Cox, for instance, refers to its VOIP offering simply as “digital phone service.”

Askin, however, criticized the idea of marketing VOIP as just a new flavor of phone service. He says a major difference between the cable VOIP marketing efforts and that of the incumbent telephone companies is that the ILECs actually embrace the terms “IP” and “telephony,” while the cable operators seem to avoid them.

“I don’t think that marketing ‘IP’ or ‘telephony’ is what the buying public really wants,” says Time Warner Cable’s senior VP of VOIP marketing, Sam Howe, during a question-and-answer session. Howe says consumers have “100 years of buying experience with the telephone,” and his company does not want to market VOIP is a wholly different service.

Later in the conversation, Askin again drew Howe offsides with a remark about the cable industry being uninterested in developing mobile VOIP offerings. "At the end of the day, the decision about VOIP is made by the head of the household, and we have to make sure that she is happy,” Howe says. “But now mobile is just not where the bread and butter is.”

True to his claim of knowing what doesn’t work in VOIP marketing, Askin trotted out some notable missteps from other VOIP players.

“AT&T spent $50 million advertising its VOIP product during the Olympics,” Askin says, pointing out that only about 53,000 people signed up for the service. “If you look at it, it cost them about a thousand dollars for every one of those customers.”

Covad’s “VOIP: The Movie” ad campaign presumed too much about the VOIP knowledge of consumers, Askin says. “I don’t know if anybody from Covad is here, but their ads -- I didn’t even understand their commercials."

Askin was kinder to Vonage Holdings Corp., the company his boss founded. “Now Vonage’s marketing campaign is state of the art. I’d gladly stop being a lawyer to run the marketing campaign for Vonage,” he says. “I’m hearing that Vonage is now thinking of postponing its IPO and getting a hundred million dollars more to use in its marketing campaign.”

"That's not true," says Vonage's VP of corporate communications, Brooke Schulz, who Light Reading contacted on Tuesday. Vonage's most recent financing round "is intended to take us through to profitability," she says.

Whatever marketing approach is used, Askin says there's just not a single spokesman for VOIP who'll take it to the mass market. “We are still looking for the Steve Jobs of the VOIP industry; we need someone to come along -- and frankly I know it’s not [from] my company," Askin says.

Of course, it's worth noting that even without a VOIP version of Steve Jobs, and even without Askin's marketing suggestions, Cablevision and Cox each have approximately 1.3 million VOIP subscribers, while Time Warner Cable is nearing a million.

“I think that’s all I need to say at this point,” Askin said as he abruptly ended his remarks to a smattering of laughter from the audience.

And isn't the point of VOIP marketing to always leave them laughing?

— Mark Sullivan, Reporter, Light Reading

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