The Spaghetti Meets the Wall

Eric Frenchman deconstructs Vonage's marketing campaign in two posts. When smacking folks over the head with your ad a kajillion times doesn't "work," maybe try something else - like figuring out if you still have a product that can be differentiated from everything else on the market. I've got Optimum Voice at home, and the offering is nearly identical to what Vonage could give me. But my bill comes along with my cable bill and it works with my existing cable modem, so I didn't have to run out for any additional hardware.

On nothing more than gut feel, I'll postulate that Vonage's problem is differentiation. People probably don't see enough incremental value in Vonage's VOIP product to want to go with Vonage vs. the VOIP offering from their current access provider.

In cases like this, where the product is at best at parity with similar products from competitors, you can have the brand serve as a differentiator, and hope that your customers align more closely with your brand than that of your competitors. But that begs the question - Vonage is all over the place, but are their ads responsible for any brand-building activity? Not by my assessment. The ads seem to be largely DR-focused.

If I were their CMO, I'd first look to existing and prospective customers to find a differentiator (or something ownable to be added to the product), I'd also take a nice chunk of that marketing budget and earmark it for brand-building activity. (As long as you're wasting money on $130 CPAs, there's plenty of money for brand building.) I'd pull out of TV and radio entirely until we latched on to a brand idea and an easily defendable product differentiator.

Someone should do some variable isolation analysis to find out whether Vonage's advertising is actually good for its competitors. I suspect that their advertising prompts consideration, and when potential customers see they can get a similar product from their existing broadband provider, they go with the offer that makes more sense. I bet Vonage is, to an extent, building a business for their larger competitors, especially cable companies offering broadband access.