MSN TV, formerly WebTV, is targeting a $5 million direct marketing campaign at those older than 55, a segment that represents the largest age group not online.
Television, direct mail, radio and print advertisements will push subscriptions to the Microsoft Corp.-owned service, which offers narrowband Internet access through the TV and not a computer. Adults seeking holiday gifts for their parents are a secondary target audience.
“What's interested us in this [seniors] target is they're both the largest population not online and they're now the fastest-growing segment of new Internet users,” said Sam Klepper, senior director of marketing at MSN TV, Mountain View, CA.
MSN TV claims this audience is ripe for its service. It costs $9.95 a month for five hours of e-mail and Internet access. Unlimited access costs $21.95 a month, comparable with other ISPs, though this audience is unlikely to spend hours on the Internet. There is a one-time $99 fee for the receiver, wireless keyboard and remote control.
The bulk of the ad budget, $3.5 million, is devoted to three TV spots for the holiday season. Handled by Euro RSCG Tyee MCM, Portland, OR, the spots range from 50 seconds to 2 minutes. They air on national cable channels in Miami, Phoenix, Las Vegas, Tampa and Des Moines, IA.
One execution shows the joy after a daughter in her 30s gives her elderly parents MSN TV. An e-mail from the granddaughter caps the happy occasion. In another spot, a 40-year-old-plus person shows the ease and affordability of the service. The final spot uses black actors to make the same point.
“We uncovered some information in a research study about how African-Americans and Hispanics seem to have a higher purchase interest in this type of product, and what we're going to do is some sells in our direct mail to reach those groups as well,” Klepper said.
Klepper did not know why these ethnic groups showed particular interest in a product like MSN TV. He thinks under-representation of Internet-accessible homes is one reason.
TV also conveys the ease of use and affordability of MSN TV. The messaging specifically portrays the ease with which MSN TV lets older Americans communicate with family and friends.
Consumers are asked to visit MSN TV retail partners Best Buy or Circuit City offline and online to buy the registration kit. They also can visit RCA.com, which is part of Thomson Electronics, maker of the MSN TV receiver. The incentive is a two-month-free offer that runs through January.
The direct mail campaign is more targeted to older Americans. Handled by Euro RSCG Tatham, the $250,000 effort comprises 1 million mailers to prospects in Miami, Phoenix, Las Vegas, Tampa and Chicago.
Mail pieces ask consumers to call a toll-free number on the brochure or visit Best Buy or Circuit City. The outreach starts in November and ends in December, with one-time drops to prospects off lists rented by the ad agency.
An identical call to action as the mailers is reflected in three 60-second radio spots. They air in the same markets as the mail drop. The radio spend is also identical as direct mail, $250,000. Euro RSCG Tyee MCM handled the effort.
Print ads appear only in AARP's Modern Maturity magazine, whose readership reach is 21 million, and My Generation, with a reach of 4.2 million. The ads highlight MSN TV's ease of use. Euro RSCG Tatham handles print.
MSN TV's media plan kills two birds with one stone. Except for Las Vegas, cities where the campaign will run have a higher-than-average senior population. Many of the same markets have a higher-than-average population of Hispanics. And the Chicago area has a large black population.
Essentially, the campaign targets prospects that match the MSN TV user base. Its users are Americans in their mid-50s in the low-income strata. Only 10 percent have computers at home, signaling a low penetration of high-tech gadgets.
Though Klepper would not disclose the renewal rate, he claimed that MSN TV's user base had a 30 percent greater retention rate than any other group buying ISP products.
“Seventy percent of our users have never been on the Internet prior to getting our product,” he said.
The 6-year-old company, acquired in 1997 by Microsoft and renamed in September 2001, does not disclose subscriber numbers, either. It bundles them into the overall MSN Internet division's 8.7 million subscribers. This includes the MSN Internet service provider numbers.
MSN TV's challenge is whether this first targeted campaign toward an older demographic pays off. This is even more critical after the service's repositioning that resulted from older Americans showing more interest than younger consumers who are more at ease with computers.
“We are projecting our sales to double in November relative to October,” Klepper said.
