SAN FRANCISCO (AdAge.com) -- It cost $4 billion to turn it into one of the best known names in the country, a future-forward, dynamic brand with a strong connection to young consumers and a share lead in the wireless marketplace. Yet, in 2007, Cingular will be tossed aside like an old sock.
AT&T Plans to Kill Cingular Brand
Acquisition
Not only is AT&T -- in the throes of acquiring Cingular
owner BellSouth --planning to ditch the Cingular name and
ubiquitous, sprightly orange jack, but it will replace it with its
own stodgy moniker, renaming the division AT&T Wireless. Such a
move could conjure up images of the rotary dial and cause so much
confusion that experts estimate it may take another $2 billion in
marketing expenses to explain the changes to consumers.
AT&T argues that the $4 billion spent building Cingular -- it
will lay out around $1 billion this year alone -- won't be wasted,
because, in the words of spokesman Michael Coe, it has "created a
brand that has led to a customer base which is the largest in the
U.S." The company also claims that the single moniker for all
AT&T services will "eliminate customer confusion and make a
much more elegant solution."
And certainly if consumers take to the idea of bundled service, it
is easy to see where "elegant solution" comes in. It would seem
logical to try to sell consumers their landline, Internet
connection, cable connection and wireless service all under the
same brand.
'A mistake'
Still, many ad experts feel the success of bundling is far from
a given, and that ditching the wireless brand as we enter a
wireless future is the wrong approach. "To give up Cingular is a
mistake," especially in favor of AT&T, "my father's brand of
telephony," said Jonathan Asher, president, Dragon Rouge USA, a
branding and design consultancy. "I'm not sure how much value or
what AT&T brings to the party." Of course AT&T has positive
attributes, Mr. Asher pointed out, like "incredible recognition,
incredible heritage and somewhat reliable," but it also is "stodgy,
old fashioned, big, heavy and dated."
Karl Barnhart, managing director, CoreBrand, New York, a former
AT&T agency, agreed that changing the Cingular name "doesn't
make sense." Cingular's brand is "relevant for the younger
audience; it's a fun, hip, interesting, dynamic -- everything you
don't think about AT&T."
Mr. Barnhart estimates the changeover will cost "probably one-half
billion per year for three to five years." And in the end,
consumers still may not understand why they moved from writing a
monthly check to AT&T to writing one to Cingular and then going
back to AT&T, he said.
'Could it cost them customers?'
"It's the right decision to buy BellSouth," said Mr. Barnhart.
"But it's a hard business decision to jettison Cingular." Could it
cost them customers? "If they don't do a good job of [changing the
Cingular name] consumers will jump to Verizon Wireless."
The change also comes at a time Cingular faces a flurry of emerging
competition targeting the lucrative youth market from new wireless
service providers such as Amp'd Mobile, Mobile ESPN and other
mobile virtual network operators.
Cingular is the No. 9 mobile brand in the world, according to
Millward Brown's recent global brand rankings, and has a value of
$6.6 billion, just below Verizon Wireless at No. 6 and T-Mobile at
No. 7. But Nikhil Gharekhan, senior VP, Millward Brown Optimor,
still thinks it makes sense to hitch the wireless arm of the newly
merged company to AT&T's star, or death star, as some describe
its logo. Brand equity "is not wasted if there is enough marketing
or communications of message so those equities are transferred to
AT&T."
'Somewhat damaged' AT&T brand
Susan Nelson, executive director strategy and insight at
Landor, San
Francisco, also espoused the view that the "somewhat damaged" and
increasingly meaningless AT&T brand needs to be attached to the
Cingular business for the entire company's sake. "Rebranding
Cingular is not only the right thing, but probably the only thing
to do," she said. "The AT&T brand didn't stand for much ... at
least as a leader in telecom. If they want to make it meaningful
for tomorrow it has to represent the state of the art, and the
state of the art is mobile."
So far experts have been unimpressed with AT&T's $1
billion-plus campaign last winter to introduce the combination of
SBC and AT&T. "It's an amateurish revision," said Mr.
Asher.
The head of one wireless company joked that AT&T is spending a
lot of money for virtually the same logo and a lot of lower case
letters.