Verizon’s attention-getting ads frustrate AT&T, peak consumer interest

Posted by Tammy Parker Sunday, November 22nd, 2009

Add a comment

Verizon Wireless has raised the hackles of rival AT&T Wireless with an ad campaign that highlights the coverage gaps in AT&T’s 3G network, but is that marketing push enough to stem the tide of customers flowing to AT&T solely because they want Apple’s iPhone, for which AT&T still has the US exclusive?

AT&T is suing Verizon Wireless over the latter’s advertising campaign, whose tagline “There’s a map for that” highlights the gaps in AT&T’s 3G coverage by displaying a map of the US with numerous blank areas. Verizon’s tagline also mocks ads promoting the Apple iPhone, which say, “There’s an app for that.” Filed in a federal court in Atlanta, AT&T’s lawsuit seeks a cease-and-desist order against Verizon’s ad campaign, which it says misleads consumers into thinking that blank spots on the map mean AT&T has no coverage at all in those areas even though AT&T customers can “fully use their wireless devices outside of a ‘3G’ coverage area and undisputedly have coverage in areas depicted by white or blank spaces on the maps used in Verizon’s advertisements.”

In its response to the court, Verizon was blunt, saying, “AT&T did not file this lawsuit because Verizon’s ‘There’s A Map For That’ advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts.”

Clearly Verizon has taken the offensive in its marketing because it’s tired of coming up second to AT&T in net adds, a trend that began with AT&T’s introduction of the iPhone. Verizon gained 1.2 million net adds in 3Q09 to bring its customer base to 89 million, but the largest US mobile operator is losing market share to second-place rival AT&T, which added 2 million subs during the quarter.

Verizon has done a great job of building out its CDMA network over many years and has long used that in its advertising (“America’s most reliable wireless network” is the main company tagline). The operator has repeatedly emphasized the extensive coverage and reliability of its network, but in many cases that message was being lost on US mobile users, who have jumped to the iPhone even though problems with AT&T’s GSM and 3G networks were well-known even before the iPhone caused massive traffic jams of data.

Angie is my best friend of more than three decades. She spends her time in Arizona and California and did not want to switch from Verizon, which provided her with great service, but desperately wanted an iPhone. So Angie made the switch and now admits that her mobile service on AT&T’s GSM and 3G networks has been a great disappointment, but she still refuses to give up her iPhone. She’s been willing to live with the poor service in order to keep the device. She’s not the only one: Faced with an either/or decision (either a good network with boring devices or a troubled network with the iPhone), many people in the US are selecting their operator based on the device, not the network.

A few months ago, there were signs that Verizon Wireless had finally begun acknowledging that many people care more about the device than the network, and it began touting its growing smartphone portfolio alongside its network strength. “We’ve always believed even the most advanced device is only as good as the network it runs on,” Mike Maiorana, regional president for the company, stated in a recent press release.

Understanding the importance of key devices to its overall success, Verizon has committed a reported US$100 million to an integrated ad campaign touting the new Motorola Droid. That device, based on Google’s Android operating system, provides Verizon’s best chance right now for competing directly against the iPhone.

Verizon’s advertising mix is grabbing consumers’ interest. Even Angie has been paying attention. She emailed me last week to ask my opinion of Android phones, and the Droid in particular. “I’m still waiting for the iPhone to come to Verizon, but if the Android phones are any good I’ll bite when my contract (with AT&T) is up for renewal in the spring,” she wrote.

That’s exactly the response Verizon is hoping to generate from its recent marketing efforts. And that’s why AT&T will continue legal efforts to shut down at least some of Verizon’s ad campaigns. Verizon’s message about having the most reliable network was falling on deaf ears, but Verizon’s revamped mix of messages that combine network reliability with a sexy Android handset is making people take notice. It might even make them become Verizon customers.