CTAM 2003 Digital Case Study Competition

Digital Operator
1st Place: 'Viral' Campaign Spurs Cox's Digital Conversion Rate
Group: Digital Operator
Award: First Place
Campaign: "Share The Happiness"
Company: Cox Communications Inc. Patti Marciano, director, web marketing and e-commerce
Cox Communications Inc., like other MSOs, faces slowing growth in its digital-cable business, plagued by churn and satellite competition. But a "viral marketing" campaign that Cox undertook late last year, prominently featuring the company's Web site, netted a 39 percent conversion rate to digital, four times what company officials expected. For that effort, Cox is being recognized as the first-place winner in the digital operator category in CTAM's "Digital Case Study Competition."
The cornerstone of the campaign was a Web referral function, where existing Cox Digital Cable subscribers were incented to get their friends and family to sign up for Cox Digital via the Web, said director of Web strategy Patti Marciano.
She said Cox hit on the idea of using viral marketing after watching its success for Internet-based services, such as e-mail and high-speed access. "We knew that providing an e-mail-based way for our customers to refer their friends would offer a greater chance of success than a program that relied on paper forms and postage," Marciano said.
Cox launched a digital-cable referral Web site, hoping to achieve a 10 percent response rate.
The home page at cox.com/share informed digital-cable subscribers that they would receive one month's free digital service for each friend they signed up. The home page included a link the customer could send to a friend. Customers also could enter the contact information for their friend on the Web site.
Prospective subscribers received an e-mail with links to facilitate a digital-cable purchase. By filling in zip-code information, customers would get routed to their respective local Cox Cable system.
The campaign ran last October through December, with the site receiving 92,104 hits, resulting in 32,126 page views from 15,678 visitor sessions. The site drew 10,747 unique visitors and 1,357 users visited more than once. The average session length was three minutes and 43 seconds.
The response, Marciano said, blew Cox officials away. "For every referral made on the site, 39 percent resulted in a Cox Digital Cable sale," Marciano said. "Compared to an average 1 percent to 2 percent response rate for a direct-mail campaign, the results of this program have been astronomically higher than traditional mail."
Marciano said there were also significant cost savings in using the Internet. Whereas a typical digital-cable marketing campaign costs $30 per sale, she noted, all Cox had to do here was change some buttons on its home page. The cost: nothing.
"While we do give a reward to the customer who referred their friend, we view putting our resources in the form of a 'thank you' gift rather than in the form of a marketing expense as a benefit to assist in retaining these valuable customers," Marciano said.
The ordering online also saves on commissions. Typical call-center commissions run $6.05 per sale, she said. Combined with the $1.95 cost related to call avoidance and talk-time expense, Cox saved $8 per sale by using the Web campaign.
2nd Place Winners: Time Warner Tactics Drive DVR Sales
Group: Digital Operator
Award: Second Place
Campaign: Digital Video Recorders
Company: Time Warner Cable, Green Bay
John Lochner, vice president, marketing
Time Warner Cable's Green Bay, Wis., division launched digital video recorders last August, one month after premiering its iControl video-on-demand service. To drive DVR sales without confusing consumers on the two products, Time Warner Cable used incentives for customer-service reps as well as telemarketing, live radio interviews and a 35-foot truck to demonstrate the benefits of the service.
CSRs were given prizes depending on the number of DVR sales that they secured in a given hour, day or week. A telemarketing firm contacted three pay-network households and advanced analog subscribers. A launch event that included demonstrations, local dignitaries and celebrity guests (Mimi Rogers, Freddie Rodriguez) was held. TWC conducted 10 live radio interviews to explain the service and rolled out the 35-foot truck, compete with demo stations for DVRs, high-definition television and high-speed data.
The MSO's results were linked with an adjacent high-speed data push. TWC said 16 percent of digital subscribers with or without high-speed data acquired an additional set-top for their home. There was a 10 percent increase in high-speed subscribers taking DVRs, and a 7 percent gain among non high-speed subs taking DVR.
Simplified Packages Halt Churn, Wins Subs
Group: Digital Operator
Award: Second Place
Campaign: "Operation Orange"
Company: Time Warner Cable, Los Angeles
John Trierweiler, vice president, marketing and sales
Time Warner Cable's Los Angeles system addressed its digital-churn problems by simplifying its digital packages and making a renewed effort to win back lost subscribers.
The system started with a $39.95 price point for digital basic (200 channels, digital music, VOD access), then offered any extra digital premium network for $5 more each month. (For existing digital customers paying more than any new tier rate, TWC called to offer more premium networks in extant packages for a $1 price increase. TWC said 40 percent of all those contacted took three or more pays.)
The system launched the initiative last September and generated 40,537 premium connects in four months, compared to only 22,804 for the first eight months of 2002 and 27,144 for all of 2001.
Premium churn dropped from 9.7 percent in 2001, to 5.3 percent in the final four months of 2002.
Overall digital penetration doubled from 24.5 percent in 2001 to 49 percent in 2002, paving the way for TWC to increase VOD and pay-per-view rates in those categories rose from 42 percent in the first eight months of 2002, to 53 percent in the final four months.
Digital Supplier
1st Place: Showtime 'Grills' Buy-Rates Through Upgrade Initiative
Group: Digital Supplier
Award: First Place
Campaign: "Chill, Thrill and Grill"
Companies: Showtime Networks Inc., Charter Communications Inc.
Jordan Berman, online marketing manager and advertising
Showtime Networks Inc. won first place in the digital industry-supplier category in CTAM's case study competition, thanks to an innovative upgrade campaign, conducted with Charter Communications Inc., that combined digital-video and high-speed elements.
The companies said research shows that bundled video-and-data customers have a higher propensity to embrace premium networks. Showtime developed a rich-media e-mail campaign to buttress a summer "Chill, Thrill and Grill" promotion.
The result: the e-mail tactic generated a 50 percent open rate and a 3 percent click-through rate.
"More importantly, the 0.69 percent buy-rate was delivered at a cost of $4.31 per new subscriber to Showtime and a deployment cost in pennies to Charter," said Showtime online manager of marketing and advertising Jordan Berman.
Last June, Charter's non-Showtime subscribers received messages via cross-channel, direct mail, bill inserts and banner ads on the MSO's Web site (www.charter.com). A rich-media e-mail message was sent to Charter Pipeline high-speed subscribers in July.
That promotional scheduling was aimed to induce recipients to open up the rich e-mail in July, after they'd been made aware of the Showtime campaign via the June message. A click-to-order button was incorporated in the e-mail.
The e-mail deployed streaming video, as Showtime used HyperText Markup Language graphics that communicated the offer and provided a call to action. The cross-channel TV spot was digitized and streamed inside the e-mail, reinforcing Showtime's long-standing "No Limits" campaign.
Any subscriber who used the click-through button was sent to a jump page where account information was captured. Upgrade requests were forwarded to Charter CSRs.
More than 600,000 Charter high-speed subscribers received the e-mail offering new Showtime subscribers a free Weber tabletop grill and six free pints of Ben & Jerry's ice cream, a $50 value to new subscribers. The subject line read: "$50 VALUE — Get a Weber Grill and Ben & Jerry's from Showtime."
Charter found that 306,526 recipients opened the e-mail, translating to a 50 percent open rate. Recipients generated 8,201 click-throughs, or 3 percent. Of those, more than half (4,274) signed to upgrade to Showtime, giving the e-mail campaign a 0.69 percent buy-rate, better than direct mail's typical yield, Showtime said.
"The most important metric of success was the low cost of $4.31 per new subscriber to Showtime, and the e-mail's deployment cost in pennies to Charter," Berman said. Berman added that the companies plan to use the best practices developed from the campaign for subsequent e-mail efforts.
2nd Place Winners: A Pioneering Retail Approach to HDTV
Group: Digital Supplier
Award: Second Place
Campaign: "Picture Perfect"
Companies: Pioneer Electronics Inc., Time Warner Cable
Dan Ward, director, marketing, cable and communications
Pioneer Electronics Inc. broke new ground via a high-definition television campaign with Time Warner Cable in Southern California, the first initiative linking a consumer electronics giant with an MSO.
The campaign was designed to marry HDTV set sales with Time Warner's high-definition programming. Consumers who purchased a Pioneer HDTV set from a participating retailer would receive the operator's digital package, Home Box Office, Showtime and one HDTV receiver for free for six months.
The campaign used a 30-second on-air spot promoting Pioneer's HDTV plasma set and the six-month offer. Direct mail also was employed, as were point-of-display cards in retail locations. Twenty-five stores, including Best Buy and Circuit City outlets, were part of the campaign.
Pioneer and Time Warner said one of the key goals of the campaign was to get consumers to come in and sample HDTV programming at retail.
TWC said inquiries into digital and HDTV increased dramatically after the campaign, which ran during January and February, was launched. Pioneer and Time Warner were tabulating results at press time.
Instant Activation Boosts Premium-Net Orders
Group: Digital Supplier
Award: Second Place
Campaign: Showtime NOW Online Instant Activation
Companies: Showtime Networks, Comcast Corp.
Jordan Berman, online marketing manager and advertising
Showtime launched an online instant-activation campaign with Comcast Corp.'s cable system in Alexandria, Va. The result: 15 percent of all Showtime orders for June 2002 came through the premium network's Web site.
The campaign was trained on existing digital customers, who were targeted with a special online deal that offered one-month free, plus instant activation with a paid subscription. The two companies worked together, allowing digital subscribers to log on to the Showtime Web site (www.sho.com) and instantly activate Showtime by submitting their order online.
To establish the online order, Comcast had to create an offer-rate code, online offer qualification, online offer presentment, serviceability verification, provisioning, billing and customer-service practices.
The marketing plans included targeted direct mail, TV, print, bill inserts, public relations and telemarketing. The 15 percent buy-rate translated to 50 online orders out of 332 transactions that month. Another 25 offline conversions were directly related to the Web-based offer, Showtime said.
Showtime also saw a net increase in orders in June, compared to the previous five-month period. Showtime manager of online marketing and advertising Jordan Berman attributed the increase to the ease of ordering online and the instant-activation feature. Online ordering also helps to save call-center costs for MSOs, Berman said.
On-Demand Operator
1st Place: TWC L.A. Twins VOD Launch/Digital Upgrade Effort
Group: On-Demand Operator
Award: First Place
Campaign: VOD Launch
Company: Time Warner Cable, Los Angeles
Max Herbas, director, new products
Time Warner Cable earned first-place honors in the operator on-demand category in CTAM's case study competition by successfully combining a video-on-demand launch with campaigns to raise digital penetration, which now stands at 49 percent.
The MSO's goals were to reduce churn through increased customer satisfaction, accelerate the shift to digital and increase profits through new revenue streams.
The Los Angeles system launched a brand campaign, "Now Anything is Possible," specifically for VOD and part of its overall "Because We Care" effort to drive digital growth. The idea: to put the VOD launch front and center to help spur digital expansion.
The first phase of the campaign, which debuted last summer, was to educate consumers about digital and VOD. That was followed with more targeted tactics to close the sale and encourage trial usage. Content-driven messages were then added to the mix.
TWC launched with 100 new-release movies, priced at $3.95; 60 library titles priced at $1.95; and 40 adult titles available for $9.95. SVOD packages from HBO, Cinemax, Showtime and The Movie Channel were launched for $6.95 per month. TWC's free-on-demand category featured fare from DIY, Home & Garden Television, BBC America, Food Network, Cartoon Network, Cable News Netwrk, Comedy Central, The Golf Channel and The Biography Channel.
The system developed stand-alone VOD messages targeting digital premium and non-premium homes, as well as analog subscribers for upgrades.
The messages focused on VOD's three primary attributes: convenience (start a movie or program whenever you want, no trips to the video store, no late fees or out of stock movies), choice (hundreds of titles), and control (pause, fast-forward and rewind functionality with a remote).
The system utilized a wide array of media components, including outdoor, radio and newspaper ads, cross-channel spots, PR events, bill inserts, on-hold messages, "leave behind" materials, e-mail and direct-mail efforts, and telemarketing.
TWC said VOD buy-rates have increased 120 percent over PPV since the introduction. The company counts 4,209 SVOD customers. The system reported that digital churn has dropped in half and basic churn by 20 percent. Digital penetration now stands at 49 percent, the highest in the company, with customer satisfaction of digital improving 15 percent, TWC said.
"Corporate has used our lineup model as a template for all divisions," said Max Herbas, director of new products, TWC Los Angeles. "It's intuitive, it's easy to use and gets the customers to the purchase point immediately."
2nd Place Winners: Altrio 'Stickiness' Improves With Starz Offers
Group: On-Demand Operator
Award: Second Place
Campaign: Starz On Demand Launch
Company: Altrio Communications
Bill Rivas, vice president, sales and marketing
Altrio Communications, a competitive overbuilder in Pasadena, Monrovia and Arcadia, Calif., launched Starz On Demand last October, using a campaign that netted both an increase in Starz On Demand users and overall digital subscribers.
Depending on a customer's service level, Starz SuperPak, including Starz on Demand, was priced between $5 and $12, with a "buy now, service free for three months" offer. Altrio used cross-channel spots, print ads, 26,000 direct-mail pieces, CSR product training and telemarketing to get the word out. Altrio also used email, door-to-door and a mobile demonstration.
The campaign resulted in an increase in Starz Super Pak penetration to 50 percent from 34 percent, and a 17 percent gain in digital subscribers. Altrio said it has doubled Starz On Demand cumulative usage over other markets. In addition, overall VOD category usage and sales grew 15 percent.
"Starz Super Pak along with Starz On Demand has improved the stickiness of our product by reducing competitive losses," said Bill Rivas, vice president, sales and marketing for Altrio.
Raising Digital Penetration in Green Bay
Group: On-Demand Operator
Award: Second Place
Campaign: iControl is Coming
Company: Time Warner Cable, Green Bay
John Lochner, vice president, marketing
David Sengkhammee, product development manager
Since launching VOD last summer, Time Warner Cable in Green Bay reports that digital penetration has increased from 25 percent to 31 percent, while area DBS rolls have dropped by 3,744 subscribers.
Green Bay was TWC's first division to launch movies-on-demand, SVOD and free on-demand fare using the MSO's Interactive Services Architecture last summer. The launch plan called for using the iControl theme to gradually increase awareness of VOD through each wave of promotion.
TWC started with 14 outdoor billboards that teased the upcoming iControl launch and focused on the "choice, control, convenience" theme. A series of radio and broadcast/cross-channel spots were then added to the campaign. Print ads and direct mail were subsequently layered in.
To give VIPs and the media an opportunity to learn what iControl was all about, the system held a launch event titled "A Revolutionary Day." The event drew 500 guests from government, business, retailers, media and community constituencies.
TWC demonstrated VOD, along with PVRs, HDTV and high-speed access, with the help of Showtime talent Mimi Rogers and HBO Real Sports
contributor Frank Deford.
In November, combined VOD/PPV buys reached 23,259, compared to 16,778 in the year-earlier period, with VOD accounting for 5,997 of the total.
On-Demand Supplier
1st Place: Concurrent Serves Key Role in HBO On-Demand Debut
Group: On-Demand Supplier
Award: First Place
Campaign: SVOD—"The Churn Buster with HBO's Chartbusters"
Company: Concurrent Computer Corp
Joe Parola, vice president, market development
Concurrent Computer Corp. took first place in the industry supplier on-demand category in CTAM's case study competition for its work in Time Warner Cable's Columbia, S.C., system to launch HBO On Demand.
Concurrent's servers were part of Time Warner Cable's VOD platform. In July 2001, TWC began offering the 26,000 extant HBO subscribers a 30-day free trial to the on demand service. The marketing plan included direct-mail, radio and TV newspaper ads, local public relations and moving HBO On Demand to channel 1 on the program lineup.
The promotion began on July 1, 2001 and the requests from HBO subscribers immediately swamped the set-top box control software, effectively shutting down the system. TWC responded by shutting down all marketing three days after launch and working with Scientific-Atlanta Inc. to upgrade software to handle session setup requests. The new software was in place by mid-September.
"The initial test's success proved that subscribers were interested in SVOD as an on-demand offering and that HBO On Demand is compelling as a revenue generator," said Joe Parola, vice president, market development at Concurrent.
After the first few days of the campaign, TWC started targeting 100 HBO digital subscribers per week to sell them HBO On Demand, and even out the traffic flow. Once the new software was in place in September, the system increased that number to 100 HBO subscribers per day.
In December 2001, the advertising campaign was restarted. Targeted mailings were sent to subscribers. In January 2002, the system launched an acquisition-and-upgrade campaign to target nonsubs and digital households.
To date, the system has generated a 54 percent penetration rate for the $3.95 a month HBO On Demand service. Digital HBO subscribers have increased 22.9 percent, since HBO On Demand launched, and overall digital households improved to 34 percent. Digital premium households also grew 34 percent.
The division now counts 30,115 customers in all four premium on-demand services (HBO, Cinemax, Showtime and The Movie Channel), for 87 percent of its overall digital subscriber count.
Also, HBO On Demand subscribers buy three times as many VOD hit movies as non- HBO On Demand subscribers. Average SVOD usage is 6.6 hours per month, with TWC experiencing a 53 percent sell-in rate for HBO On Demand for new HBO digital subs.
Churn for HBO On Demand subs is 40 percent, lower than those without the service. And churn on digital HBO subscribers with HBO On Demand is 400 percent lower than those without the service.
TWC also reports that DBS's growth rate dropped from 21 percent between April 2000 to April 2001, to 2.5 percent from April 2001 through April 2002.
2nd Place Winners: Seachange Truck Speeds VOD Showcase
Group: On-Demand Supplier
Award: Second Place
Campaign: "The VOD Experience Tour"
Company: SeaChange International
Jim Sheehan, public relations manager
Server provider SeaChange took to the road to showcase VOD, launching a 41-foot mobile truck at the 2002 CTAM conference in Boston, to crisscross the country and showcase the benefits of the technology. By December, the tour had reached dozens of markets and logged over 50,000 miles.
The vehicle was equipped with set-tops from both Scientific-Atlanta and Motorola, so no matter the cable system, VOD could be displayed.
The truck hit Time Warner Cable systems, for instance, in Charlotte, N.C.; Lincoln, Neb.; Binghamton, N.Y., and Waco, Tex. Events included built-in promotions with local consumer electronics stores, radio remotes and content-partner promotions.
"Their VOD truck, with its built-in headend and over-sized plasma screens, supplied our iControl launch event with a visually dramatic focal point," said Brian Cecere, vice president, sales and marketing for Time Warner Cable's Lincoln division. "It captured the attention of our local media and further supported the sophisticated nature of VOD technology and Time Warner Cable's expertise in its deployment."
'Plan' Kicks Up PPV Sales
Group: On-Demand Supplier
Award: Second Place
Campaign: "2002 ESPN Game Plan"
Company: ESPN
Matt Murphy, vice president, interactive sales
Aided by a marketing plan that included a national sweepstakes and CSR incentives, ESPN generated a 111 percent increase in its college football Game Plan pay-per-view package in 2002 compared to 2001.
The 2002 program was designed to increase PPV revenue, awareness of the Game Plan package and help operators compete with direct-broadcast satellite providers.
The plan gave operators a taggable radio spot, CD ROM, ad slicks, logos, Web banner, on-hold message, radio script, CSR information sheet and gifts for each consumer purchase. The grand prize sweepstakes included a trip for two to the Rose Bowl, tickets to the game and parade, hotel, airfare and meal money as well as ESPN merchandise.
Affiliates were eligible for an ESPN Game Plan prize pack and trips to the 2003 ESPY Awards. ESPN said 83 affiliates participated, 50 percent more than in 2001. Some 40,000 spots promoted the early-bird package price, sweepstakes and gift offer, and reached 19 million subscribers.