Retooled Prodigy goes for newbies

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Prodigy will back its relaunch this week as an Internet-based service with a $15 million branding campaign that positions it as a more practical, personalized service for online beginners.

The campaign, the first work for the online service from Weiss, Whitten, Stagliano, New York, will appear in newspapers in the top 10 Prodigy markets; computer and consumer magazines, including Newsweek, People and Vanity Fair; and on radio stations in select markets.

"The newbie is who we're trying to reach," said agency partner Nat Whitten. "We wanted to bypass the wackiness, loudness, and busyness and do something that felt comfortable and easy."


Added agency partner Adam Stagliano, "A lot of our conversations centered around the human connection."

The print ads are spare, using earthy colors and a miniaturized person or teaser questions to invoke the idea that the Internet is a place for individuals to find services they need. "Prodigy Internet. Make it yours" is the tagline.

It's been a tough year for the online communications company, which finally lifted itself out from under IBM Corp. and Sears, Roebuck & Co.'s ownership in May, when it was acquired by International Wireless.

This time last year, the service--like rivals America Online and CompuServe--was using a broad TV campaign to promote itself as an offbeat, Generation X venue for creative content and chat. Cliff Freeman & Partners was Prodigy's agency at the time.

But with a fresh infusion of marketing capital, pricing competitive with both AOL and the Internet service provider market, and an entirely Internet-based platform, analysts like Forrester Research's Kate Delhagen think the new moves could resuscitate the Prodigy name.


"I don't foresee them retaking the lead, but they're going to be competitive," Ms. Delhagen said. "Their long-term goal is to stay a midsize company."

The new Internet-based product will sell for $19.95 per month for unlimited service, or $9.95 for 10 free hours, with each additional hour at $2.50. Prodigy Internet will let subscribers create their own home pages and choose their favorite links, and it will also capitalize on Web-based brands the service has been building over the past year, such as music site SonicNet and Chat Soup.


If marketing dollars alone make a company competitive in the marketplace, then Prodigy's new management is ready to get aggressive. Senior VP-Marketing Bill Pearson said Prodigy will spend $50 million on marketing in the fourth quarter alone, with at least another $50 million budgeted for 1997. The effort will include the ad campaign and other marketing efforts, such as licensing and bundling deals with PC marketers.

That budgeting plan is in line with the current relaunch of the Microsoft Network, also spending $100 million during its current fiscal year, ending June 30, with $50 million going to advertising.


CompuServe, challenged by flat subscriber growth, is said to be spending between $100 and $120 million on marketing for its service. But it has decided not to use a broad TV branding campaign in favor of more direct marketing.

America Online, pledging to boost subscribers 66%--from 6 million to the 10 million mark--by the end of 1997, is investing $333 million in marketing through fiscal 1997, ending June 30. It launched a new campaign from TBWA Chiat/Day earlier this month.

Mr. Pearson said Prodigy opted against TV ads because, "We want to do something that you can look at for a few more seconds than is possible on TV ... It also has to do with internal biases, including my own, about cost effectiveness. In the context of where we are and the kind of image we want to convey, I think we can be much more effective in terms of recall and action with" these methods.

Copyright October 1996, Crain Communications Inc.

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