Marketing In a Maelstrom

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On the eve of the Cable & Telecommunications Association for Marketing's annual summit — to be held this week in Boston — I'm curious about the mindset of some 2,500 people, who by the time this appears in print will already be on the scene.

As I write this on the night of July 11, the 10-month anniversary of the terrorist attacks on these shores — with all of its ramifications — I'm also thinking about where my own head is, amidst a slew of very disturbing trends and headlines.

As I write, the Dow Jones Industrial Average is now trading below the 9,000 point, with the anticipation that more corporate malfeasance, such as the alleged use of questionable accounting practices by Bristol-Myers Squibb Co., will come to light.

Think about the other events of last week. President Bush made an appearance in lower Manhattan to say that those Enron Corp.-like crooks will be held accountable. It didn't do any good.

That same day, a prominent medical trial — testing the efficacy of hormone replacement therapy — was suddenly suspended due to some scary contraindications about breast cancer, heart disease and stroke. The pharmaceutical companies took a nosedive, and so did the rest of the market.

Another bad omen: Universal McCann's Robert Coen, a respected researcher, last week revised his 2002 projections downward, particularly for cable — predicting a 3.5 percent decline for that medium.

What all of this says is that there is a major lack of confidence in the U.S. economy, a fact that marketers should not ignore. This is your problem, too. Americans, who have seen their 401K funds shrink, are becoming frightened and tightening their purse strings.

While prepping for a CTAM panel on branding and rebranding — which I'm moderating on Monday — I sense how distracted everyone seems to be about attaining the goals of the endgame. For cable marketers, the goal is to protect the basic customer base, but also to grow new services such as digital, cable modems, video-on-demand, subscription VOD and interactive services.

It's a little hard to stay focused during these tumultuous times. For the most part, cable's premium customers — the low-hanging fruit, if you will — have already signed on for a lot of the new products. That was a slam dunk.

But we now see that digital video continues to have problems with churn — rates are ranging anywhere from 5 percent to 10 percent, depending on who you want to believe.

It's going to take a lot of marketing savvy to make these new products into mass-market commodities. It might never happen.

While all of the folks in the market try to push these new products, their bosses seem preoccupied with short-term financial goals. And they're beholden to Wall Street investors, who seem skeptical about cable.

On top of that, cable might soon be entering a protracted battle with direct-broadcast satellite. Not surprisingly, the dish guys are targeting subscribers of bankrupt Adelphia Communications Corp., urging them to make the switch.

Competitively, you can't blame them. If the shoe were on the other foot, cable would likely use the same tactics. But some fear that cable operators other than Adelphia might be affected, too. One ugly brush stroke can go a long way to tarnish other MSOs.

Going into CTAM, the endgame is to protect market share, albeit during difficult times. So how do you do that?

If I were an MSO, I'd get this message out loud and clear: I have a demonstrably better product and I have the facts to support that claim. Then I'd turn on the marketing spigot, big-time.

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