Branded Utilities&

Utilitarian Branding

O2’s ode to seamless integration

Charlie Thorogood

An Introduction(Boring but important)

• In December 2004, O2 were 4th and last in the mobile phone network provider’s race for customers, trailing rivals Vodafone, Orange and T-Mobile. They were also placed lowest of all major providers in a survey of overall customer satisfaction.

• A mere year later in December 2005, they had the largest customer base in the UK and ranked highest of all network provides for overall customer satisfaction.

• Consequently, Spanish telecommunications giant Telefonica decided they were worth £17.7bn when they bought them out in late 2005.

• They have since consolidated their status as market leader and now have approximately 18million customers in the UK and a £4bn annual turnover.

Industry Background

• Up until 2005 each of the industry’s 4 big boys focused their marketing resources on stealing each others’ customers.

• As saturation levels hit 70% there was a limit to the amount of new markets to target so this ploy seemed essential for survival.

• The result of this, however, was that customers regularly switched network providers, enticed away by appealing introductory offers and irritated by the poor customer services offered by their current network provider.

So how do you win a race whenyou start in last place?

Well, how do you win a race whenyou start in last place?

• The essence of O2’s resurrection lay in a dramatic change of strategy – rather than aiming to steal their rivals’ customers, they focused their efforts on rewarding the loyalty of their existing ones.

• In so doing, they also excelled where they had previously stumbled - in attracting their rivals’ customers. They liked the sound of a network provider that would treat them with respect.

• Naturally, advertising has been at the heart of O2’s revival. Everybody had to know what they were doing or this risky about-turn in strategy could have finished the struggling company off.

The Ad Campaign

• On the surface of it, VCCP’s ads for O2 are all pretty unimaginative.

• On TV, an oxygen bubble floats through some attractive ethereal scenery while Sean Bean talks about how well O2 treats its customers. See what you can do? Then the same thing happens again. And again. And again. Online, in print, in their shops and everywhere else they appear, O2 are serenely unimaginative.

• Creatively, the campaign is hollow at best and I wouldn’t be the first if I argued that it is simply an exercise in branding and barely even a justifiable advertising campaign. But I don’t think this is the case at all. I think it’s inspired.

• To justify this comment, it’s important to draw some direct comparisons with how one of O2’s major rivals, Orange, sell themselves.

• I don’t want to pick on Orange but they’re the only one of O2’s rivals with a comparable media spend.

• VCCP’s creative solution to O2’s situation was “A world that resolves around you” (which manifested itself in their campaign line “See what you can do”). A simple promise which was backed up by a good product and suitably professional customer service.

• Images from their TV commercials naturally accompanied their MMS communications (free, direct advertising) and were further reinforced by their online, print and press spots.

• Orange’s proposition, meanwhile, was “The future’s bright, the future’s Orange.” A nice, memorable line, but one which offers zilch (unless an Orangey future genuinely floats your boat). Oh, and then it was something cute about togetherness and now they’re talking about good things never ending.

• Whilst 360 thinking is in evidence it feels forced, their current never ending website exemplifies this perfectly – clever idea, no point.

Apologies to Orange,whose ads are lovely

• So O2’s ads are dull to look at and nobody talks about them down the pub. Orange, on the other hand have consistently created memorable, clever, or touching ads.

• It sounds funny, but to my mind, this is exactly the problem with Orange’s advertising.

• O2’s whole campaign is both relevant and consistent and greater than the sum of its parts as a result.

• Orange’s campaign, however, is relevant but wildly inconsistent and considerably weaker as a result.

Communications for telecommunications

• The inconsistency in Orange’s advertising is confounded by the industry in which they exist. Conversely, O2’s consistency is perfectly suited to it.

• The telecommunications industry moves at breakneck speed and, in any market with short product lifecycles, a brand image has to be consistently applied to numerous and varied communications across all media to plant the deepest roots.

• O2 benefited from keeping it simple and consistent even if this resulted in the production of adverts with little surface appeal.

• But isn’t that what all agencies are seeking: a BIG idea? If the confines of that idea place constraints on creativity then so be it because one big idea is stronger than 100 small ones – kudos to VCCP for keeping their eye on the ball.

How “utilitarian branding”made the branding of

branded utilities a piece of pie..

• Buying the naming rights to the Millennium Dome (arguably the greatest white elephant of all time) was a massive gamble.

• Since its redevelopment last year, however, the O2 Arena has immediately become the world’s best selling live music venue.

• The internationally renowned artists who have performed there are essentially appearing in an ongoing live advert for O2.

• The prestige of attracting diverse big name acts such as Justin Timberlake, Foo Fighters and Led Zeppelin (result) have infinitely enhanced the O2 brand’s appeal across all markets.

• An added bonus is the rising status of the O2 as an internationally iconic building, appearing in blockbuster films “The Da Vinci Code” and “The World Is Not Enough”.

• By offering VIP tickets and priority bookings to all customers, O2 have upheld their promise to customers of a world that revolves around them.

• VCCP’s TV spot for the O2 exemplifies the simplicity with which O2’s branding can be applied to their branded utilities.

• Sponsorship of Arsenal FC also targeted London-based customers with disposable income.

• These weren’t just football fans either, corporate hospitality has revolutionised how elite football clubs finance themselves and O2 reaped the benefits of reaching the divergent market groups attending Arsenal’s football games.

• Sponsorship of the England rugby team who achieved national hero status by reaching last year’s World Cup Final was another of O2’s great coups.

• Once again, they made full use of this partnership to offer their customers exclusive access to the team, both in real life and via online video.

• In November 2007, O2 sealed exclusive rights to distribute the iPhone, the hottest new electronic gadget from the hottest electronics company at the moment.

• This further served to show consumers who didn’t know how it felt to have a world which revolved around them just exactly what they were missing out on. Particularly astute given the iphone’s capacity to be used as an internet portal, media player and camera.

Integrating branded utilities

• I’m not sure how happy the England rugby or Arsenal football team would be to be called a branded utility, but from O2’s perspective that’s exactly what they are.

• By offering their customers exclusive access to music, sports and technology, they aren’t just talking a good game, they are practising what they preach – a world which revolves around you. And a world which keeps getting bigger to boot.

• Wherever possible (given the nature of synergy in business) the marketing communications that go hand in hand with these branded utilities always carry the instantly recognisable, easily applicable O2 branding.

Integrate this.

• In terms of integration, O2’s campaign is 100% seamless. In fact, you will have noticed that I have been happy to assimilate their last 3 years of advertising into one single campaign, such is the unprecedented consistency in their messages and the style of their presentation.

• O2 have proven that integration on such a mass scale can be phenomenally effective.

• But what happens next? Where will the future take O2 as they seek to further consolidate their position as market leader?

Let’s see what the future holds…

O2: Media Gatekeepers?

• With the growth in popularity of video on demand (like 4OD or BBC iplayer) and access to music, photography and UGC through the internet rapidly increasing, mobile network providers are in the ideal position to become gatekeepers of vast stores of all media entertainment. Customers will be lured by offers of exclusive content – taking the O2 arena effect into the digital world.

• They could even offer this service as a legal peer2peer operation like Qtrax using either the internet or bluetooth, given that their customers already have to pay contractual fees.

• Orange have already set the ball rolling by recently sealing a deal with Setanta Sports to stream their TV channels direct to customers’ phones for a monthly fee.

O2: Media Gatekeepers?

• The modern mobile phone is like a super-portable laptop, the perfect device to access all online media and, seeing as how everything is going digital right now, this means all media.

• O2 need to capitalise on the increased use of their phones as internet browsers, cameras, mp3 players, video players and recorders and games consoles. Not only are they already perfectly positioned to do this, but the technology already exists to implement it.

• Potentially, O2’s domain could amalgamate the combined popularity of YouTube, itunes, Flickr, and foreseeably television and games consoles too. There is little in the way of them monopolising all online media. Scary?

“I’ll pay with my phone”

• In some parts of the world, phones are already replacing credit/debit cards.

• O2 should pre-empt the arrival of this technology in the UK by becoming involved in fronting a financial service.

Food on your phone

• Online shopping is steadily increasing in popularity but still hasn’t reached as many people as it potentially could. This is another avenue for O2 explore.

• They already have an ongoing partnership with Tescos, providing the supermarket’s customers with mobile network services under the name Tesco Mobile.

• It would be smart for O2 to offer customers reductions on items bought over the internet from Tesco. Given the breadth of services offered (insurance, loans, food etc) and the dominance of Tesco in their own industry, a successful relationship could feasibly kill off both companies’ rivals.

Conclusion: where will it all end?

• The mobile phone is the emblem of the early 21st century. It is also the most personal form of media available to advertisers.

• O2 have unbridled access to their 18 million customers and are able to reach them at the exact moment they wish. If the messages they send out offer the customer something, continually harking back to a world which revolves around them, then the sky really is the limit.

• In fact, the world which revolves around you may one day start to look more like a universe.