In a TV campaign that just started airing, comedian Mike O'Malley is seen in a pair of ads deliberating the advantages of Time Warner Cable over Verizon Fios, citing less-complicated bills and free service calls as two major pluses. Sam Howe, the cable company's chief marketing officer since June 2005, said this is the first time Time Warner Cable has gone after a specific competitor, which naturally brought to mind tactics most commonly used in a presidential election. So, to gain inspiration, he went straight to the source.
Mr. Howe and his team consulted with political advertisers involved with the 2004 presidential race -- one of whom happened to be on the Republican side -- to learn some of the baseline do's and don'ts of competitive advertising. The key learnings? Name names, be informative and retain a sense of humor. "People aren't voting next Tuesday, so they don't want to hear the most negative ad. They actually want to have a relationship with you, so frankly negativism isn't going to work," Mr. Howe said.
Taking an aggressive stance on customer service has proved to be a crucial part of Time Warner Cable's marketing strategy, even when its programming offerings result in the loss of subscribers. In the past year, two sports cable channels, the NFL Network and Big Ten Network, have caused subscriber uproar by not being available in key markets where satellite providers such as DirecTV and Dish are carrying them on their sports tiers.
Although Time Warner just signed a distribution deal with Big Ten last month that will service customers in key markets such as Ohio and Wisconsin, Mr. Howe said the experience had little effect on his overall marketing strategy. "We see ourselves as a company with at least three products now in a bundle culture. So when you evaluate now whether you have a piece of programming, it's in a much different context than if you are a [satellite] company where you only have that product. ... We're not a specialty store now as much as we are a retailer of a range of products that people want."
Time Warner Cable could also be changing up its media strategy soon as it continues shopping around its media account to agencies, handled in-house and valued at $158.2 million in spend in 2007, according to TNS Media Intelligence. Longtime creative agency Ogilvy & Mather remains with the company and produced the TV spots. Mr. Howe added that he has even more flexibility in spending now that Time Warner Cable split off earlier this year from parent company Time Warner to become the largest independently owned pure-play cable company. "Because you're not feeding someone's balance sheet or income statement you can look at the world differently," he said.
Mr. Howe recently spoke with Ad Age to share other lessons from his three years as Time Warner Cable's CMO and why the industry's challenges give him little cause to leave his post any time soon.
Ad Age: You've served as CMO of Time Warner Cable for over three years now, since 2005, right when DVRs started to become a major consumer product and Fios and U-verse were but a twinkle in Verizon and AT&T's eyes. As evidenced by your competitive ad campaign, in which you call out Fios for having a complicated billing process, what have the past three years taught you that have informed your latest efforts?
Mr. Howe: Three years ago we would've done a competitive ad that just sort of shouted back at the competition. Three years later we're being very single-minded about the one thing about each of our competitors that consumers find daunting, off-putting or wrong. So it's about targeting each of those things, rather than "How many things can we say?"
In those ads we very much call out one thing about each, and it's a consumer truth that consumers find telco [telephone company] bills confusing. But it's not just a smear, because if you pull up a Fios bill, it is two pages, and it is itemized and continues the legacy consumers find maddening about the telco. So we think we're in the zone, calling out a truth consumers see today and themselves in the past.
Ad Age: Because this is your first time singling out your competitors, what considerations did you have to take?
Mr. Howe: Before we went to this series of competitive ads, we went to school. I talked to people who do political ads, tested a bunch of pre-existing bashing ads, even a few that might be good. We did some testing on them not just to see if people liked them or not, did they resonate with anything, could we link them to anything that was true about ourselves and the competitor.
And we've tested them and they're working because they're single-minded on those truths and keep the message intact. ... And that's part of why we picked Mike O'Malley for the ads, because he's an actor who can do comedy, and secondly, his star power's not getting in the way of the message.
Ad Age: You consulted with some key political strategists for advice as well. Any metaphors or synergies you found between politics and the cable industry?
Mr. Howe: In politics or consumer marketing, it's about share of mind. If you're talking about consumer marketing, people want to see a longer-term sense of integrity and what the real product opportunity is. You could argue when it comes to competitive advertising, there's no stretching the truth. You have to be rock solid with what the facts are, what you're trying to convey. You could name names, as we've learned, there's no sense being negative. It doesn't work in consumer marketing.
Ad Age: How top-level of a marketing concern was the controversy over your carriage of the Big Ten Network, which cost you a fair amount of subscribers in key markets?
Mr. Howe: I would tell you it's far less significant in volume and sentiment based on HD [high definition] -- nearly half the country now has an HD set. What does a CMO look for? It's not "You don't have the thing I need," I'm struggling to make the essential thing work the best. So that's why the Big Ten's important for a narrow but important segment, but nowhere as important as HD and defining a video's experience. Big Ten makes for good headlines and competitive differentiation, but the more major life-altering or enhancing things are really what the CMO has to look for. And frankly we've done plenty of work and studies to know people are looking for controls that are effortless.
Ad Age: Speaking of customer service, what does the phrase "Comcast Must Die" mean to you, and what did it teach you?
Mr. Howe: The blogosphere is strong, and people's tolerance for terrible service is low. When we survey our customers, its very clear they're pleased. They're even reasonably tolerant of stuff not working. But unfortunately with Comcast Must Die, it's probably they're being picked on because of their size but particularly there might've been a threshold crossed. In our case we haven't crossed that threshold and certainly must not.
Ad Age: What do you make of Comcast, then, responding to comments on Twitter and other social-networking sites?
Mr. Howe: We're certainly responding at a technical chat-group level; we haven't seen the need to answer every customer-service complaint. We think our point of focus is really on the local level, so we punch up the local response.
Ad Age: What about the economy? Have you seen any recession-related effects on your subscriber base?
Mr. Howe: There's a potential irony that cable does well in recession and boom times. Our theory is, there's defaults on mortgages, people are moving into apartments, where we've had traditional strength.
From what we're seeing since the last recession, the internet is not just a source of information for people, but people really need the internet to find their way out -- not just as a distraction but to source opportunities, whether it's for children or themselves explicitly, or to find new homes or apartments.
Ad Age: Any recessionary effects on your marketing budget?
Mr. Howe: Ironically, no. As we recognize the potency of the brand and the need for top-line revenue growth, spending becomes more important, and we are saying that to the street. We definitely are ticking up our spend. It's not just in promotion, but that's where it is arriving most often. And we're also being more selective in our market placement in where we want to amp it up. And the brand-influencer campaign in New York is an expression of that, an incremental spend we definitely wouldn't have done before.
Ad Age: Earlier this year, it was announced that Time Warner Cable would be spun off from Time Warner as its own publicly traded company. How has that affected your job, if at all?
Mr. Howe: On the one hand, the impending spinoff from the parent has no impact at all. In that our names can be the same, there'll be very little change in staff, and arguably we already are operating differently than when I started three years ago.
But one can anticipate having a more singular focus when you are the only pure cable play that's independently owned. There's no family in the new company; it's owned entirely by the public. You also become a pure-play marketer. You really are unencumbered by partnerships internally and become even more consumer-centric.
And lastly, when you're a standalone brand and there is no parent behind you or under you, you need to make sure your brand stands up tall and means something to not only investors but to consumers. And that's not just a safety net but really a greater emphasis on top-line growth.