The Money’s in the Marketing
Shortly after activating its 400,000th account, Vonage launched its voice-over-IP services into the United Kingdom in January 2005. The company sells its products from its Web site, around which marketing efforts are centered. In addition to the Web, Vonage has advertised the new service on television, the radio and in print media, and signed a £75 million marketing contract with Havas. This kind of comprehensive campaign summarizes the company’s worldwide branding strategy. (Vonage)
According to an article in Information Week, 50 percent of Vonage’s 2005 advertising budget is being spent online. Considering high-speed Internet access is required to use the company's products, targeting customers online is a smart way to go.
“In the first five months of 2004, Vonage spent a whopping $25 million on online ads, according to TNS Media Intelligence/CMR. Spending on TV, radio and print has been modest: less than $5 million last year and less than $2 million in first-half 2004, per Nielsen Monitor-Plus. A spring TV and radio campaign from Korey Kay positioned Vonage as ‘your telephone company's worst nightmare’ (AdWeek)."
In addition, Vonage ran full-motion video commercials on 15 high-traffic Web sites, including ABC News, About.com, Accuweather, CBS Sportsline, ESPN, FoxSports, Gamespot, iVillage, Lycos, Maxim, MSN, and Nick.com. The resolution of the video was designed to be much closer to that of broadcast quality than what Flash or Java provides, thereby ensuring a more positive experience for the person whose Internet surfing has been interrupted by the ad. (New York Times).
Stupid People on TV
Vonage has a series of television commercials intended to make people laugh and to realize they needlessly pay too much for their telephone service. The four spots show normal people doing dumb things and suffering the consequences. The commercials look like they were shot with a home video camera, adding to the everyday feel of the sequence. They feature:A male running on a treadmill with his head covered. He falls, slides down the length of the treadmill and flies off screen.
Teenagers spinning in circles with their heads balanced on baseball bats. They stop spinning and run through the backyard, tripping and falling over each other. One slams hard into a storage shed.
A man cutting down a tree with a chain saw. He is cutting it from the wrong side and it falls on and crushes his car.
A helmeted child playing baseball in his backyard in front of the sliding glass door. He swings at a pitch, letting the bat go flying off behind him where it crashes through the glass door.
The scenes are wrapped up with the following, written and spoken: “People do stupid things. Like pay too much for phone service. So switch to Vonage. The Broadband Phone Company. Unlimited calls to the U.S. and Canada. $24.99 per month.”
The ads are intended to convey the idea that overpaying for phone service is as ridiculous as the featured activities. They are the kind of commercials people talk about and that evoke excitement when they air. Audiences want to see what stupid things people will do next. The content is basic enough to attract a wide demographic, which is important because almost everyone needs phone service. The simplicity of the ad theme is key because a lot of people don’t "get" VOIP, but they do get paying too much to their telephone service provider.
One-stop Web site
One of the most inviting aspects of Vonage’s Web site is the ability to watch the company’s “People do stupid things” commercials. The ads are entertaining and will have visitors coming back to the site and pointing their friends in that direction.
The company’s online press room provides the following for the media:
news releases going back to 2001 in both html and PDF formats
press and marketing contacts, complete with name, title, telephone number and e-mail address
an image library with downloadable B-roll, photographs and company logos
multiple product reviews from reputable organizations such as CNN/Money
industry news from respected publications like the International Herald Tribune, Newsweek, New York Magazine, and ZDNet
transcripts of coverage broadcast on television
information on awards won and industry research
In addition, visitors find product and company information and have the chance to sign up for e-subscriptions to newsletters and press releases. The Web site encourages visitors to be customers, and customers to add advanced services.
Room for Improvement
Vonage's branding campaign is a great example of online marketing. Between spending half of the company's advertising budget online and packing so much information and interaction on its Web site, Vonage has its cyber-bases covered.
There is always room for improvement, however. With more than 550,000 active lines, the company can assume it has reached the low-hanging fruit and now needs to climb higher. New VOIP companies are being launched all the time and Vonage must use the Web to differentiate itself from its growing list of competitors. Marketing efforts need to be more two-fold, with one side targeting those who know and understand the technology and the other side targeting those who don't. Currently, Vonage's message targets those who don't, using a medium designed for those who do.
Additionally, the company needs to quickly utilize the Web to launch a crisis management campaign. Vonage is being sued over problems with its 911 service. (CNet) People will not switch from traditional phone service to VOIP if they feel their lives will be endangered by doing so. The company has not posted to its Web site a response to the charges or a statement reassuring current and potential customers.