Cox Spins A Web Of Marketing Success

Cable World, July 21, 2003

Byline: MAVIS SCANLON

Last summer, Cox Communications won a gold Mark Award from CTAM for its "Great Deals" Web promotion. The campaign's objective was to generate a 25% increase in monthly online orders for Cox cable and high-speed data services over a three-month period. The strategy was to drive customers to the Cox.com website, where, they were told, they would get better deals.

Cox underestimated. In just one month, online cable orders rose 53%, digital cable orders rose 40% and HSD orders rose 125%. Granted, the company may have been working from a low base, but overall, Web orders jumped 44% in the first month, far exceeding the company's target.

These days, Cox is duplicating last year's Web marketing success. In conjunction with HBO - Cox's "Network of the Month" since February - Cox is giving away $20 to every customer who signs up for Cox Digital Cable and HBO.

The promotion has been so successful HBO has signed on for the rest of the year, according to Patti Marciano, Cox's director of Web marketing. "We are using it as an evergreen initiative to continue to drive sales through the website," she explains.

As DSL and satellite competition grows fiercer, legislation has narrowed telemarketing parameters, so cable operators have been compelled to seek out more targeted and more cost effective ways to reach existing customers and new prospects. The Web, along with the built-in customer e-mail databases MSOs own, fits the bill.

With the federal Do Not Call registry taking effect recently, telemarketing has certainly taken a hit, says Maria Rothschild, VP of marketing at ColdSpark, a Denver-based e-mail marketing company whose customers include Showtime and Comcast. In the second quarter, ColdSpark nearly tripled its e-mail deliveries on behalf of cable operators seeking to acquire or retain customers, Rothschild adds. Furthering this trend "is the realization on the part of MSOs that they have this asset, this broadband base."

Cox uses e-mail as a marketing and communication tool, but is exploring deeper uses of the technology, such as more opt-in e-mail marketing and customized e-mail newsletters based on customer preferences. The company seems to be further along with its Web strategy. Here's how the Cox-HBO promotion works: Cox drove traffic to the website by advertising a sweepstakes giveaway of a 50-inch TV, but made no mention of the special offer. When visitors arrive at the website, they see a link to the $20 offer, right next to the customer service link. They can also click on this year's "Best Deals" icon, a rotating potbelly pig with the emerald green color and sheen of a Christmas tree ornament. Even though the $20 money-back offer was not specifically promoted anywhere else, 2.5% of the visitors to the site purchased a Cox digital package along with the HBO premium channel.

The results are "comparable to a solid direct-mail campaign without the cost to us," adds Marciano, declining to disclose specific numbers.

Another promotion Cox did with Disney, in which it gave away a Lizzie McGuire-branded digital camera, boasted an even higher rate - 15% of the visitors purchased the Cox product. Although Marciano and Nancy Heffernan, Cox's marketing manager for video services, declined to give specific numbers for the Lizzie promotion, Heffernan says orders were in the thousands.

Through its Web marketing programs, Cox is reducing transaction costs and call center traffic. According to Marciano, Cox saves $8 for every order it processes over the Web compared to the call center. In May, visits to the company's website surpassed calls to its centers, she adds. Joe Rooney, Cox SVP of marketing and Marciano's boss, is "absolutely an advocate of leveraging the Web," Marciano says.

"Probably a key factor in [Cox's] success is that they are giving back to the customer," says Howard Horowitz, president of market research and consulting firm Horowitz Associates. "They are saving $8 but giving back $20 - that's a great deal for the consumer."

From a consumer point of view, responding to an offer via a website solves the problems of lengthy wait times, disconnects and endless transfers customers can experience when they call a service center. "It's unobtrusive, it's automatic and the whole process is very well liked by people who actually use it," Horowitz says.

Overall, he thinks cable operators still have some way to go with their own Web presence, including their high-speed data services. "That investment back into the HSD platform for this high-margin product that they are selling is a whole new area of opportunity."

Exclusive content will be crucial to driving demand for high-speed data, says Bill Allman, SVP and GM of Discovery Interactive Media.

"Eventually, high-speed data may be seen as a way to get special exclusive content," Allman says. "In theory, everyone agrees down the road, that has to happen."

Comcast, for one, has been revamping its own HSD home page, with expanded shopping, searching and applications capabilities, all within the Comcast.net environment. The largest MSO clearly sees the opportunity available to it on the Web.