The two firms will become independent publicly traded companies in 2015. The move follows pressure from investor Carl Icahn to spin off the payments ...
Paunch-bellied entrepreneur Reed Woodson (a fictitious name) calls his own shots. He pooh-poohs “the corporate thing…the politics, the back-stabbing, the chit-chat, the garbage.” And thanks to the convenience of ordering software from Beyond.com, he works out of his house naked-buck naked-for all the world to see. “I’m as free as I want to be,” he declares.
Woodson, of course, is fictitious-a nudist executive dropout created for Beyond.com’s current TV campaign. But “Home Office,” which began running in February, has struck a chord with viewers, one of whom actually wrote the Sunnyvale, Calif.-based software retailer asking about the business Woodson operates. And in the most recent survey by the Internet usage measurement company Media Metrix, Beyond.com was No. 1 in total traffic among all computer retailers online-thanks in part to the visibility of its TV advertising.
“The company’s mission is to be the first in the space to establish a brand name,” explains Brian Sroub, vice president of marketing for Beyond.com. Compared to other media, he adds, “TV tends to be a wider and faster awareness builder.”
With more and more online retailers taking their message to the masses, 1999 is shaping up to be a watershed year for TV advertising. Television isn’t expected to take the place of online advertising, which is still the predominant medium for most Internet retailers. But as companies start to see a greater demographic convergence between the typical consumer and the online consumer, television is becoming a viable, cost-effective means of reaching millions of potential consumers.
“There’s nothing more powerful than TV,” says Michael Crotty, vice president of marketing for CDnow Inc. The Fort Washington, Pa.-based music retailer was the second-largest advertiser on this year’s Grammy Awards, running seven spots throughout the night and adding Grammy winners to its home page during the telecast.
The ‘Miseducation’ of CDnow
“We call the Grammys the Super Bowl of music,” says Samantha Liss, director of brand marketing for CDnow. During the 1998 Grammy telecast, the retailer broke its first
TV campaign in a big way, selling Grammy-winning CDs at an unprecedented 50% off. “It’s some-thing we did for attention that we won’t be doing again,” Liss says.
But it worked. The promotion drove a record number of visitors to the site, while this year’s Grammy promotion-which offered 30% off all Grammy-winning CDs plus free shipping-eclipsed the previous year’s numbers by 53%. Again, the number of concurrent visitors to the Web store reached an all-time high, recording 3.5 million page views in the 24 hours following the broadcast -1 million above average-as well as 7,500 first-time customers. “We sold 16% of all the Lauryn Hills we’d sold within 24 hours of the broadcast,” Liss says-and that’s a lot of CDs.
CDnow advertises heavily on MTV, VH1 and CMT, and its site often features promotional tie-ins to the video channels’ programming- a “Behind the Music” promotion with VH1, for instance, or MTV’s popular “Road Rules” series. “Our advertising approach is built around being where music is,” Liss says.
Online remains the largest piece of CDnow’s marketing budget, which Liss calls “a very healthy mix of TV, radio and online.” She adds, “It’s an integrated approach so that it all makes sense and works well together -online to on-air to on our site. That convergence is very important.”
For companies with a bricks-and-mortar track record, television can heighten the awareness of their online presence, as witnessed by the success of the Victoria’s Secret fashion show last winter (Newsline, March/April). Lands’ End is spending an estimated $15 million
to promote its online store with a campaign that includes TV, print and Internet ads.
Bn.com, the online arm of Barnes & Noble, uses radio as a frequency medium and turns to television primarily during the peak holiday periods, although it branched out to include Mother’s Day and Father’s Day this year. “In terms of driving people to our site, I’d rank TV first, newspapers second, radio third, and magazines last,” says John Rindlaub, vice president of brand marketing for bn.com.
“What TV provides is a B-52,” creating the high level of brand awareness that tells the company’s customers that the company is in the game for the long haul, says Ken Perez, senior vice president of marketing for Reston, Va.-based CyberCash Inc. “It’s a significant statement for a company to use any television,” he says.
CyberCash ran an ad touting its new one-click shopping model, InstaBuy, on CNN and Headline News for three months beginning in April. The spot ran about 300 times-“not a lot,” Perez admits, “but enough for people to notice it on a business trip.”
For a vendor who may be chasing a big online retailer, the TV spots are a boost to the salespeople who are on the front line of the approach.“It’s not just a morale booster internally,” says Perez. “It’s a high-level awareness booster.”
“Even for a business-to-business company such as CyberCash, I think the bottom line is multichannel marketing,” adds Perez, noting that CyberCash reached an audience of approximately 6.5 million listeners with a radio tour in April. “TV is just one of the legs of the chair.”
Such is the impact of television that it can be used to create or cement a company’s identity-or tweak an existing one, such as the current campaign for Amazon.com, which has been airing on spot TV and national cable since March.
There are five spots in the campaign, each one set against a vast backdrop, including an aircraft carrier, the Superdome, the Roman Coliseum, the Palace of Versailles and the Great Pyramids. The message-“Earth’s Biggest Selection”-conveys the fact that the Seattle, Wash.-based retailer now features books, music, videos, gifts and auctions.
A well-balanced diet