TECHNOLOGY - July 29, 2002
The black-and-white images on the television screen are of vintage telephones, linemen dressed in early 20th century work clothes and operators in front of massive old-fashioned switchboards.
But this is not a documentary. It’s a commercial for BellSouth Corp. that has been popping up regularly on national cable TV outlets, even though the Atlanta-based Baby Bell serves only nine Southeastern states.
The company has been aggressive in using advertising to shore up its image at a time when the record-setting bankruptcy filing of No. 2 long-distance provider WorldCom Inc. has further sullied the already-troubled telecom sector.
Although WorldCom is not mentioned in the commercial that began appearing about two weeks after the Clinton, Miss.-based company acknowledged it improperly accounted for $3.9 billion in routine expenses, its presence is unmistakable.
The soothing voice that accompanies the nostalgic images emphasizes BellSouth’s ability to play a leading role in business, “even in times like these.”
SBC Communications Inc., AT&T; Corp. and Sprint Corp. also are running ad campaigns in print and on TV designed in part as a response to WorldCom’s debacle. Officials at WorldCom and its MCI unit declined to comment on how they might use advertising to reassure their customers.
The BellSouth ad campaign is being overseen by William Pate, who was in charge of MCI’s advertising from 1992 to 1996. Pate now is vice president for advertising and public relations at BellSouth.
The company can use all the goodwill it can muster. Last week, BellSouth reported its second-quarter earnings were down by more than half. On Friday, the stock rose 33 cents to $23.32 on the New York Stock Exchange, far short of its 52-week high of $42.95.
Question: Was this ad campaign launched in direct response to the WorldCom accounting disaster?
Answer: Yes. There was a lot of attention focused on the telecom industry, especially since [the WorldCom scandal] came not long after troubles at Global Crossing Ltd. and other companies. We thought there was a danger of everyone getting tarred with the same brush. It was important to assure our customers and shareholders that BellSouth had been here for a hundred years and we’re going to be here the next hundred.
Q: Some telecoms put out ads that blatantly make a pitch for MCI customers to switch over to them. Why haven’t you done that?
A: We’re not a company that delights in the pain of others. That being said, clearly in this environment when you have competitors in a difficult position, there is opportunity there. Starting Monday [today], we’re going to take this ad campaign to the next stage, where we will be offering new packages of all kinds of service.
Q: You operate in only nine states. Why run your ads nationally?
A: We are one of the most widely held stocks in the country, and I think it’s important to get our message out to our shareholders as well as our customers.
Q: In this high-tech age, why go with a nostalgia theme?
A: A couple of years ago, the dot-coms were very hip and the telephone companies were seen as stodgy and slow-moving. Then after the Internet bubble burst, it was the dependable, reliable companies that became cool. Reliability is back in style.
Q: The ads have not helped you on Wall Street.
A: An ad campaign is almost never going to markedly affect a stock. The factors that move a stock are market conditions, earnings and outlook. And as we have seen recently, psychological factors are very important in the marketplace.
Q: This seems like a very different kind of campaign than you would have done at MCI. Does advertising play a different kind of role at BellSouth than it did at MCI?
A: In my prior life at MCI, I was right in the middle of the long-distance wars. AT&T; would put on a commercial, and right away we’d have one on in answer to that, and so on. Back then, MCI was the renegade brand with only 10% or 12% share of the market. We had to make sure people knew we were there and what we could do.
When you have a heritage like we do at BellSouth, you don’t need to be dwelling on the situation of your competitors. You can sit there and tell a good story yourself.
Q: Was it more fun back then?
A: There was a lot of criticism, probably rightfully so, that after a while we had stopped talking to the customer and were just talking to each other.
Q: Do you have some advice for your old company, MCI, about what role advertising could play in trying to get the company back on its feet?
A: It’s hard to speculate. There are so many factors. I think I would have to leave it to them.
Q: So I take it that you are not in the business of helping out a competitor?
A: That’s true.
