• by John Gaffney , June 26, 2002

WorldCom’s Wake: If AT&T and Sprint will benefit from the shocking accounting fraud at WorldCom, I think they need to take a new look at their ad strategies. Right now, telecom ad spending has been cut by several factors, not the least of which is the poor financial performance of almost every company in the category. Sprint has turned its focus to CRM, which is not an ad strategy at all. The strategy there says that retaining current customers is a better financial bet than spending on big ad campaigns and discount long distance deals to attract a customer who might be vulnerable to a better deal down the road from another company. AT&T continues to focus on calling plans and other discounts. Here’s the problem. The ad strategies for both Sprint and AT&T need to start moving away from discounts, and focusing on customer loyalty. AT&T and Sprint do have a huge opportunity here. And it’s an opportunity advertising can play a big role in. AT&T and Sprint have a chance now to move away from the profit-poor but revenue rich business model the industry works under. When a big category moves to two players, all the rules are different. This is a chance to reposition the value of phone service. A good media campaign can do that.

World Cup’s Wake: Here’s the problem I have with the World Cup, and the Olympics for that matter, if I’m thinking about buying media connected with it. These events don’t resonate. When your team loses, or the tournament ends, it’s really over. No carry over effect at all. Remember all those kids winning medals in snowboarding in Salt Lake City? Please tell me one of their names. Remember the US Soccer Team that made it into the quarterfinals of the World Cup? Next month, you won’t.

A Solid Comeback Theory At Long Last: CMR released its update on 2002 ad spending earlier this week, and it was refreshing to see a report backed up by some solid market factors. According to CMR, a strong upfront for network TV and increased multi-ethnic marketing will fuel a 2.5% overall spending bump for the year. I believe that’s the first report I’ve seen that fully takes multi-ethnic marketing as growth for the overall business. Good call.