A New Profit Picture : AT&T; Opens Ad Campaign to Sell the MTV Generation on Videophones
Judith Grant is clearly not a member of the MTV generation. But the 78-year-old resident of Rancho LaCosta in San Diego County relishes electronic gizmos. She’s got a videocassette recorder. A compact disc player. A laser disc player. A telephone answering machine. A car phone. And as of three months ago, a videophone.
Come again?
That’s videophone, as in a telephone with a tiny picture screen that shows the face of the person on the other end of the line. It’s not unlike its gee-whiz prototype that amazed visitors at the World’s Fair in New York in 1964. Today, the gadget is sold right next to conventional telephones at many shopping malls. But--with its hefty price tag of $1,500--it’s certainly not purchased as often.
To change that, AT&T; has embarked on a massive marketing mission. A series of television spots promoting its videophone began airing nationally Monday. Rival MCI says it will also begin to sell videophones during the first quarter of 1993--for about $750 each--about half the price of AT&T;’s version. And companies in Japan and Europe are also hoping to market them soon.
But the picture for the future of videophones is fuzzy at best. Videophones are expensive. They’re unfamiliar. And they show stilted images that look more like slow-motion photography than what people are used to seeing on TV.
However, telephone industry executives are betting that--Judith Grant notwithstanding--today’s MTV generation is tomorrow’s videophone user. They also hope to lure frequent business travelers, families that have been separated by moves, as well as people who are less mobile.
There’s more in it for AT&T; than a one-time purchase of the videophone. Consumers will spend about twice as much time on the phone if they can actually see the person at the other end, according to phone company research. Although it costs the same to use the videophone as a regular phone, more time on the line translates into bigger phone bills.
Grant says she purchased her videophone--and another for her daughter in Tarzana--so they could cut back on the road trips back and forth. “I hate that freeway driving,” Grant said. “Now, when we talk on the videophone, it’s almost like we’ve visited.”
Added her daughter, Sue Weber: “What I like about it is that when Mom tells me that she’s feeling all right, I can see if she really is.”
Industry skeptics--and there are plenty of them--say that videophones are light years from wide acceptance. “As far as I’m concerned this stuff is still on Mars,” said Larry Lannon, publisher of the industry trade magazine Telephony. “It will not happen any time soon.”
“Who wants to clean up to answer the telephone?” posed Dr. Joyce Brothers, celebrity psychologist and author, who conceded that eventually the phones will catch on.
“It’s an invasion of privacy,” she said, “and it will introduce a whole new set of phone etiquette.”
But AT&T; executives project that seven years from now--at the turn of the century--videophones will be installed in 30 million American households. As for the next year, they expect to sell “thousands.”
“People today want the visual element in every aspect of their lives,” said Stephen M. Clemente, general manager of global videophone systems at AT&T;’s consumer products division. “These days people turn on their laser discs, play with their Game Boys, plug in their VCRs, then take their 4-inch TV sets to the beach.”
That is why AT&T; has begun airing a TV campaign to promote videophones. The tone of the ads is remarkably similar to the soft, warm image spots it has broadcast for years to market its long distance phone service to consumers. One ad features a young woman whose smiling face fills the TV screen--and then is seen on videophone screen. “She let her hair grow long,” says the off-camera narrator, “and you know it.”
AT&T; has been running videophone print advertisements in consumer publications for several months. “Look in on Grandma,” says one print ad, featuring a videophone that shows the smiling face of a white-haired woman.
But watch out AT&T.; MCI is closing in fast. Although MCI won’t be making the phones, it will be marketing videophones by March, 1993, in conjunction with British Telecommunications.
“We think the market will be directly related to the distances that people telephone,” said Gerald H. Taylor, president of the consumer markets division of MCI. “The longer the distance, the less that people see each other, and the more they will want to use it.”
Meanwhile, marketing experts suggest that consumers would be wise to wait at least two years before buying the devices. They say that is typically how much time it takes for competition to improve the technology--and lower the price--of new electronic products.
“It’s a pretty tough sell right now when it’s cheaper to get on a plane and see Mom four times a year than to buy the product,” said Michael W. Marsak, president of Marina del Rey-based Effective Marketing Strategies.
Futurists insist that videophones are here to stay. “This is the first real linkage of the television, the computer and the telephone,” said Watts Wacker, managing partner of Westport, Conn.-based Yankelovich Partners Inc. “It will penetrate American households almost as quickly as the answering machine.”
Skeptics aren’t so sure. Among them, Dr. Brothers suspects that if the videophone ever does catch on, it will have some surprising repercussions. “It will kill the phone sex industry,” she said. “Callers will no longer be able to fantasize.”
Briefly . . .
Team One Advertising of El Segundo has picked up the estimated $1-million ad business for Town & Country magazine. . . . The Los Angeles-based Spanish language newspaper La Opinion has handed its advertising account to the Latino ad agency Cruz/Kravetz: Ideas. . . . Virgin Retail of Los Angeles has handed the ad business for the introduction of its Los Angeles recorded music “megastore” to the Los Angeles office of D’Arcy Masius Benton & Bowles. . . . Doubletree Hotels Corp. of Phoenix is reviewing its $11-million account now handled by Los Angeles-based GBF/Ayer. . . . Outspoken New York ad man Jerry Della Femina, who left his former New York agency in a huff earlier this year, has formed the tiny ad firm Jerry Inc., with Newsweek magazine as his first client. . . . Ron Rieder & Associates, a public relations and ad agency, has opened in Sherman Oaks. . . . Veteran PR professional Jeanne Jalan has opened Mesa Communications in Los Angeles. . . . The Los Angeles-based PR firm Lippin Group has formed a London-based subsidiary, Lippin Wallace Ltd., to serve entertainment clients in Europe. . . . The American Advertising Federation lists California among five states likely to levy an ad tax in 1993. . . . Hollywood’s Creative Artists Agency has retained director Rob Reiner to shoot a Coke Classic spot with a theme similar to his box-office hit, “When Harry Met Sally.” . . . Spokesjock Deion Sanders wears a red Armani suit and plays “Sanders Claus” in a Nike cross-trainer spot to appear this week.
