As the battle between EchoStar Communications and News Corp. to buy General Motors Corp.'s Hughes Electronics Corp. rages on, Hughes-owned DirecTV Broadband today breaks a campaign for its DirecTV DSL service, which offers subscribers high-speed access to the Internet via a broadband connection.
Created by the Los Angeles office of Interpublic Group of Cos.' Deutsch, the $2o million account "could have a big impact on the price of the deal to the extent that it draws subscribers" to DirecTV Broadband and sibling company DirecTV, said Jimmy Schaeffler, subscription TV analyst at consulting firm the Carmel Group.
A primary target audience for the new TV, radio, direct mail and telemarketing effort is the 10 million-plus current subscriber base of DirecTV, the satellite TV service provider. DirecTV Broadband is a sibling of Hughes' DirecTV. The potential valuation boost to Hughes, however, would come from each new DSL customer lured by the campaign who also elects to sign up for DirecTV satellite services. In recent deals similar to the potential Hughes purchase, each satellite subscriber was valued between about $2,500 and $3,500, Mr. Schaeffler said.
`FEEL THE JOY'
To encourage consumers' association of the DirecTV satellite brand with the new digital subscriber line service, the campaign continues the "Feel the Joy" phrase used in current DirecTV satellite TV spots also created by Deutsch. Deutsch won the $100 million DirecTV account in August 2000, and then won the DirecTV Broadband business this spring.
Whether on TV, a computer screen or in print, the DSL ads, which include both national and spot buys in such key markets as Boston, Houston, Kansas City and Baltimore, aim to convey a sense of possibility to Internet users who have a fast connection. The 30- and 60-second direct-response TV commercials, for instance, feature a middle-aged, middle-class man at a desk in a comfortably furnished living room, who surfs to the end of the Internet.
"We're going after a higher-end prospect," says Matt Downing, VP-marketing, DirecTV Broadband. "We're suggesting that the Internet can increase their productivity."
And if Deutsch succeeds in increasing productivity at DirecTV Broadband and DirecTV by increasing subscribers, then the agency could be positioned to keep the account no matter who becomes the new owner.
EchoStar has consistently outspent News Corp. to advertise its satellite business, according to figures from Taylor Nelson Sofres' CMR. In 1999, EchoStar spent $40.3 million, while News Corp. spent $23.7 million for its cable division. In 2000, Echostar dramatically outspent News Corp. with an $88.7 million outlay vs. the $23.2 million News Corp. spent. For January through May this year, Echostar spent $14.4 million, while News Corp. spent just $8.4 million. In the first five months, DirecTV spent $51.3 million, according to CMR.
Contributing: Tobi Elkin