OneMain's $18 mil backs smaller-market ISP

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Onemain.com, hoping to get big by thinking small, will spend $18 million this year on an advertising campaign promoting one of the first national Internet service providers focused on smaller communities.

The campaign began last week in California with TV spots in smaller metropolitan areas that include Bakersfield, Chico, Fresno, Monterey, Sacramento and Santa Barbara. Ads, from Arnold Communications, McLean, Va., break in the Midwest in the next two months and hit the East Coast by yearend.

ADS FOLLOW INTEGRATION

The advertising's debut follows the 2-year-old company's integration of local ISPs it acquired in California, home to 30% of OneMain's customers. Once the company completes integration of ISPs it has acquired in other markets, it will similarly introduce advertising in those communities, said Scott Hoyt, chief marketing officer.

Reston, Va.-based OneMain.com went public in March 1999 and announced 17 acquisitions that day; since then, it has acquired 11 more local ISPs across the country. While the company has kept existing names of ISPs it's acquired in towns such as Williamsport, Pa., and Beanblossom, Ind., OneMain.com now plans to stamp its brand on all of them while integrating all operations of the acquisitions. The company offers ISP service in communities scattered across 35 states.

The advertising, which includes billboards on trucks in addition to the TV spots, carries the tagline, "Your hometown Internet." Ads feature actual OneMain customers explaining how they use and why they appreciate an ISP with a community feel. Actor Hal Holbrook provides the voice-over on TV spots.

Said Mr. Hoyt: "We want to create and develop a lot of excitement about the brand. We can address our existing constituency as well as new subscribers . . . with a call to action."

OneMain meets a need in smaller communities, Mr. Hoyt said, adding that "in 60% of our markets, [America Online] is a long-distance call. We serve tier-two and tier-three cities nationwide, underserved and underpenetrated markets [where] we still see tremendous growth."

STOCK SLIDES

OneMain went public at $22 a share, raising $215 million. But the stock has been sliding since last fall, trading around $6 at press time with a market capitalization of $150 million. Mr. Hoyt said the service has more than 700,000 subscribers and annual customer loss, or churn rate, of less than 2.5%.

OneMain isn't the only ISP thinking small. AOL and Wal-Mart Stores, noting about four of 10 towns with a Wal-Mart have no local Internet access, in December said they would develop a co-branded ISP for rural communities. Mr. Hoyt said his company "has not seen one sighting of them" in any of OneMain's markets.

Copyright May 2000, Crain Communications Inc.

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