Leave Ivan alone: Drawing the line between comparative advertising and trench warfare

In a recent speech on business ethics at Chicago's Loyola University, Ameritech's Joan Walker explained why the local exchange carrier is taking the "high road" in telecom advertising.

"If we got down in the mud to engage in negative ad campaigns and media backbiting, customers may come to feel as bad about us as they do about the competitor we malign," said Walker, the carrier's senior vice president of corporate communications. Ameritech's message testing and extensive research on the subject confirmed that customers are more likely to trust a company if it concentrates on its services in advertising, rather than on what its competitors are doing, she said.

One example of negative advertising, she said, is MCI's recent Ivan campaign, which features a Russian man who needs to be freed from the constraints of a non-competitive local market. It is one of several MCI campaigns using Cold War imagery to represent lack of competition, and this message is irrelevant to customers who want to know only what services carriers can provide, she said.

An MCI spokesman responded that these ads are just one of many ways to "get the word out" about developments in the market and that "customers aren't angry about negative ads; they're angry at lack of local competition."

The campaign provoked retorts from several local carriers and spawned at least two Ivan spoofs. In one from the United States Telephone Association, the "real Ivan" wants one company for local and long-distance service, but MCI and AT&T won't help because he "just isn't profitable enough."

So where to draw the line between sustaining strong brand recognition in a competitive industry and engaging in mudslinging that is sure to turn customers away? Analysts agree it's a delicate balance.

"It depends on what kind of company you are," said Jagdish Sheth, a marketing professor at Emory University. New entrants in an industry can poke fun at incumbents because in the U.S., "we like the underdog," he said. Conversely, an incumbent should not put down a newcomer because it looks as if they're "crushing the little guy."

Because of the sheer amount of telecom advertising, ads that focus on quality or one specific service fare much better with consumers than comparative pricing or degrading a competitor, said Jerry Arbittier, senior vice president with Competitive Media Research. "Basically, if your slogan is, 'You can hear a pin drop,' that's good," he said. "But when you start comparing cents a minute to your competitors, you start sounding like a used car salesman."

If companies differentiate themselves from competitors in ways other than price, however, comparative advertising can be effective, said Debra McMahon of Mercer Management Consulting. But carriers must stay away from the "truly negative stuff" or they can experience a backlash toward their brands because most consumers "just don't like rudeness," she said

Chances are, few consumers will be reached by ad campaigns such as Ivan, McMahon said. "Many companies, including MCI, have fallen into the trap of instead of talking to customers, talking to themselves," she said.

Eventually, backbiting ads can hurt the entire category, Arbittier said. "It gets people to not trust what's coming at them," he said.

Being positive doesn't mean a company is not a strong competitor, Walker said. "This doesn't mean we're soft; it means we're assertive," she said. "We respond critically and forcefully to any misleading information from our competitors, and then we move on to the issues our customers care about."

IMPROVED REMOTE ACCESS Several initiatives from Sprint expand and simplify remote access for business customers using the Internet. The carrier has expanded its Internet dial-up coverage to include 500 cities in the U.S. and 344 cities in 59 foreign countries. Sprint also introduced IP Web enabling software, which simplifies employee access to the Internet from remote locations.

FREE CALLS TO THE GOVERNMENT Responding to rumors of FCC-proposed regulations on Internet telephony, IDT Corp. will offer free PC-to-phone calls so government representatives can be "flooded" with responses opposing the regulation. Users can call representatives, senators and the FCC directly at www.net2phone.com to suggest that low-cost calling should continue.