TELCOS TO UNLEASH AD BONANZA

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The advertising industry's forcasters predict a robust year for ad spending in 1996, but they overlook an area of explosive growth that will propel the industry into the 21st century.

If you think the telephone companies have spent a lot of money on advertising up to now, wait until AT&T starts offering local service in competition with the Baby Bells, and the Baby Bells start offering long distance in competition with AT&T, MCI and Sprint. It will be the biggest bonanza the advertising business has ever seen. And keep in mind, the telephone companies will only be gearing up this year for their onslaught of each other's turf.

AT&T the other week announced it was setting up five local service organizations to manage and market its move into local service. Eventually, the LSOs will become full-fledged operating companies, like the Baby Bells were, and in 2025 they'll be spun off in a historic consent decree.

The Baby Bells, of course, are plenty worried. Consumers in all areas of the country say they'd prefer AT&T to provide their local telephone service. The most vulnerable are BellSouth and Pacific Telesis, where 53.8% of consumers in their territories would switch to AT&T. The least vulnerable is Ameritech, where a still sizable 40% would abandon them for Ma Bell. And AT&T has been officially certified to offer local service in Chicago, Ameritech's headquarters.

If I were the Chicago newspapers and TV stations, I'd be licking my chops (who knows, maybe our own Crain's Chicago Business will benefit). The showdown could begin early in the year, and ad guns will be blazing on both sides.

The company with the highest recognition factor will no doubt win out, and that's why Ameritech has consolidated about 30 different brand names under the Ameritech banner and logo.

Look for Ameritech to base its long-distance marketing strategy on innovative packages and services it can offer customers rather than trying to match AT&T and MCI discount for discount. Current advertising emphasizes how Ameritech makes its customers' lives easier and simpler, and it will probably take the same tack with long-distance service.

As one Ameritech exec put it, `*`We're going to simulate the battle so we'll be ready when the bullets start to fly." Ameritech knows it has one shot at prospective long-distance customers, so its ads will be very explicit as to what they can expect.

If the Nynex-Atlantic Bell merger goes through, the new entity will have a tough row to hoe. The two companies already have merged their cellular phone business under the mind-numbing moniker Bell Atlantic-Nynex Mobile, so that plainly won't be an AT&T stopper.

They'll have to put big bucks behind the new name, which I predict will be Nylantic. Of course, the ad slogan has to be,`*`My phone doctor says Nylantic."

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