How Virgin Mobile Goes Up Against the Goliaths of Phone Service
Ron Faris is up against some of the country's biggest ad spenders. While AT&T and Verizon are the No. 2 and No. 4 U.S. ad spenders, his brand, Virgin Mobile, doesn't even make the top 100. So how does the little guy go up against the Goliaths of phone service, especially when its product looks a lot different? For Mr. Faris, it's all about a laser focus on his youthful target and using social-media tools to persuade consumers that prepaid, pay-as-you-go phone plans make more financial sense.
Ad Age : Telecom is one of the biggest categories by ad spending. How does a relatively small marketer like Virgin Mobile compete with AT&T and Verizon's mammoth budgets?
Ron Faris: The running joke is that we typically spend in one year what AT&T spends on "American Idol." The good news is that our target demographic -- whom we like to call 18- to 28-year-old hyperconnected youth -- spread their attention across a myriad of media outlets, not solely on pricey prime-time TV. When young people research the brands they want to associate with, they do nothing short of background checks. And that cycle of investigation happens socially. If a brand wants to break through with a segment, that brand needs to publish as often as an almost-annoying-but-super-cool friend on Facebook.
Ad Age : Virgin Mobile sells prepaid phone plans, which some associate with unsavory characters like criminals or drug dealers. How has Virgin worked to overcome the category's baggage?
Mr. Faris: It's true that prepaid, historically, has gotten a bad rap. But the recession of 2009 changed everything. Bling was out. Thrifty was in. Fashionistas became frugalistas. These days, 60% of our customers come from the post-paid world, from people looking for better value without compromise. Virgin Mobile these days is the enlightened choice for youth. If you don't use a lot of minutes -- chances are if you're under 30, you don't -- then why pay for them? It's no different than the college grad who cuts the cord with their cable service in favor of Hulu.
Ad Age : You've talked a lot about branded content. When does branded content not make sense for a marketer?
Mr. Faris: I'm a big believer that every brand marketer has the capacity to publish branded content. The trick is to create or curate in a manner that 's authentic to the brand's voice. A brand with no content is a brand with nothing to say. And a brand with nothing to say socially -- or, worse, a brand that only posts offers -- is like a creepy user on Facebook with no profile pic.
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