Our story awhile ago on how the big cable companies were beating up Verizon on its Fios service got me thinking about Verizon's devastating and successful attack on AT&T. So here's my question: Would Verizon have picked a fight with AT&T if Cingular was still the main brand?
I don't think so. Cingular had the reputation of having good coverage, thanks to its "More Bars in More Places" ad campaign, and I have a feeling Verizon would never have challenged Cingular with "There's a Map for That" attack ads if they believed the AT&T brand was strong.
Strong brands are less likely to be attacked, and criticism of strong brands is less likely to be believed by consumers, as Ad Age columnist and consultant Al Ries has pointed out.
Let's be honest here. Many people consider AT&T to be your grandfather's telephone company, and Cingular was considered the up-and-coming and hip brand. As a matter of fact, AT&T's own research confirmed that brand awareness and affinity to AT&T were on the descent while the Cingular brand rated in the "power brand" quadrant.
As Advertising Age wrote in 2007: "It was, in a sense, an admission that the company had elected to go with the weaker brand when it acquired BellSouth and became the sole owner of Cingular Wireless -- a brand that had been built with $4 billion in spending."
"The strategy of integrating Cingular is not working," said Karl Barnhart, managing director of Core Brands Communications. "They have not been able to transfer any of the positive equity from Cingular to AT&T, despite a massive marketing campaign. That's a failure of epic proportions," Mr. Barnhart said at the time.
Another question I'd like to ask: If Cingular were still around and Steve Jobs had teamed with Cingular instead of AT&T, would Apple have sold even more iPhones? I think there's a very good chance it would have.
Now that iPhone is getting some serious competition, AT&T could become a drag on iPhone sales. Furthermore, there's even speculation that Apple might team up with Verizon -- the company that has beat up on AT&T and left it considerably weakened.
So why did AT&T select the weaker name instead of Cingular for its wireless campaign? Apparently saving money was a big consideration. At the time of the BellSouth merger, the company promised Wall Street that 20% of its savings would come from marketing dollars. What's more, many companies would rather put all their advertising dollars into one campaign with one brand name rather than several campaigns with several brand names.
It's also very dangerous for a company to have its key brand have the same name as the company itself. I remember hearing a presentation from a General Motors executive who talked about how the company sometimes used GM as a brand name. Big mistake.
The only time Procter & Gamble uses its name in advertising is when it says, "New from Procter & Gamble." The company would never, never bring out a P&G bar soap.
Like AT&T, Verizon is a company name, too, but consumers perceive it to be a brand name. That gives Verizon a big advantage over AT&T. Companies are companies. Brands are brands. And consumers perceive a difference between the two.
As Al Ries has written, nobody says he or she bought an Apple. They say, I bought an iPod, an iPhone, an iPad or a Mac. When it tried to put the Apple name on Apple TV, the product went nowhere.
Cingular and Verizon were launched at about the same time, around the beginning of the century. At the time it was discontinued in 2007, Cingular was by far the stronger brand. Imagine how much of a lead it would have today with three or four years more promotion -- especially with its powerful slogan, "More bars in more places."
I can't image Verizon launching an attack on such a strong fortress (even though the Verizon assault was against AT&T's 3G coverage, not its total coverage). The Cingular brand would have had the same weakness in 3G as AT&T currently has, but Verizon never would have dared to attack it.
Consumers would never have believed them.