Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 6, 1995 TAG: 9509060087
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: JEANNINE AVERSA ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: Medium
The multimillion-dollar mudslinging contest the phone companies are waging on TV is ``really annoying ... a turnoff,'' complains Mark Jaffee, an AT&T customer in Meriden, Conn. And he's not alone.
Though the long-distance companies say the ads work, TV viewers and experts suggest they do more to repel customers than attract them.
The ads are biting and direct:
nIn one MCI ad, former game show announcer Don Pardo is host of the ``AT&T True-False Quiz.'' Pardo asks whether ``every AT&T customer gets true savings.'' A buzzer goes off. ``False,'' he says. ``Forty million save nothing.''
nIn another ad, AT&T attacks MCI's discounted calling circles, in which ``MCI asks you for the names and numbers of your family and friends so they can solicit them to switch to MCI ... At AT&T, we don't ask you for names and numbers ... Privacy, that's your true choice, AT&T.''
Jack Kramer, an MCI customer in Washington, called the ads ``phone soup.'' To make a true rate comparison, he said, one has to look at a complex set of factors. To this end, the ads are of little help.
AT&T and MCI blame each other for the use of negative ads, which, they say, account for less than 20 percent of all their advertising.
``We're going to answer AT&T whenever it comes into the market and bashes MCI,'' said MCI's advertising director, William Pate.
Nearly 19 million people switched long-distance companies last year. And both AT&T and MCI, the main users of negative ads, contend they are effective in acquiring and retaining customers. But the companies decline to quantify such gains.
Dan Clark, an AT&T vice president, noted that his company's ad attacking MCI's calling circles emphasized privacy. ``That's a hot-button issue to consumers, and they responded favorably,'' he said.
But professor David Stewart, chairman of the University of Southern California's marketing department, said, ``We don't have a lot of evidence that these ads have been particularly effective in getting people to switch from one carrier to another.''
In fact, Esther Thorson, associate dean for graduate studies at the University of Missouri's School of Journalism, said, ``There's good evidence that companies run the risk of the boomerang effect.''
Stewart and other experts said promotions - such as offering a potential customer a $50 check - are more powerful inducements to switch long-distance service.
Another unintended consequence of the negative campaign between AT&T and MCI is that it may help Sprint.
Wally Meyer, a Sprint vice president, says that's just what has happened, with thousands of customers signing up because of the AT&T-MCI ad war.
Since the breakup of AT&T in 1984, industry revenue has nearly doubled to about $70 billion. While AT&T has steadily lost market share, its revenues have grown.
According to figures supplied by the Federal Communications Commission, for the first quarter of 1995, AT&T accounted for 56.6 percent of the long-distance market, MCI 17.7 percent, Sprint 8.7 percent and others - several hundred small long-distance providers - 17 percent.
by CNB