AT&T Inc.

Author:Frank Caso, Kim Kazemi, Mark Lane, William Baue
Pages:147-156
 
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175 E. Houston Street

San Antonio, Texas 78205-2233

USA

Telephone: (210) 821-4105

Fax: (210) 821-4105

Web site: www.att.com

CARROT TOP CAMPAIGN
OVERVIEW

In 1982 the U.S. government mandated the breakup of the vast network of the American Telephone and Telegraph Company (AT&T) into smaller regional companies, the so-called Baby Bells. The regional companies handled local telephone calls, while AT&T continued to offer long-distance service. One area in which the new AT&T decisively lagged behind its competitors was in collect calls. The AT&T brand, 1-800 Call ATT for Collect Calls, had an uphill battle to overtake the category leader, or at least to gain market share, in long-distance collect calls, an area that was itself dwindling.

In order to address the problem, AT&T initiated a national campaign in 2001 to win the hearts and minds of young callers. The campaign was the brainchild of AT&T's longtime advertising agency, Foote, Cone & Belding Worldwide of New York, but in October 2001 AT&T switched agencies, giving Young & Rubicam of New York all of its consumer advertising business. Young & Rubicam also inherited the latest ad campaign for 1-800 Call ATT for Collect Calls, which featured the brash young comic Carrot Top, the stage name of Scott Thompson. The integrated "Carrot Top" campaign consisted mainly of 15- and 30-second television spots, but it also included radio spots, print ads in newspapers and consumer magazines, outdoor signage, public relations work, ads shown in movie theaters, special events, and an online interactive component. The media expenditure for the campaign was in excess of $20 million.

By August 2003 the "Carrot Top" campaign had met or exceeded all of its goals, and in 2004 it received a Bronze EFFIE Award for its marketplace effectiveness. Not only did the brand become more recognizable to the target market, but market share and revenue increased over a period of more than two years.

HISTORICAL CONTEXT

The 1982 court ruling that broke up AT&T created numerous rivals in the telecommunications field. With the various regional Baby Bells providing local services, AT&T concentrated on long-distance services and ancillary businesses such as the sales of telephony hardware. At first this arrangement seemed to work well, but by the early twenty-first century the telecommunications landscape looked a lot different than it had 20 years earlier. In response, the leadership of AT&T decided to split the company into four units: AT&T Business, AT&T Wireless, AT&T Broadband, and AT&T Consumer. The consumer unit was responsible for most long-distance calling, including the 1-800 Call ATT for Collect Calls brand. "Carrot Top" was not the brand's first advertising campaign, nor was Carrot Top its first

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Carrot Top (Scott Thompson), a spokesperson for AT&T. AP Images. spokesperson; he followed the actor David Arquette. Foote, Cone & Belding ostensibly had chosen the edgy comedian because of his appeal to young people, and Young & Rubicam seconded the choice when it took over the account.
TARGET MARKET

The majority of collect telephone calls were made by people between the ages of 16 and 24, and this was precisely the group for which Carrot Top held the highest appeal. He was well known as a comic on the college campus circuit and as someone who projected an anti-corporate image. This type of image was especially important in attracting people in the target age group, since in many cases the first instinct of such people was to question, or even reject out of hand, authority or corporate messages. Although collect calling was not something young people spent much time thinking about beforehand, Carrot Top was the type of celebrity with whom this audience could identify. A secondary target market consisted of people 25 to 34 years of age.

COMPETITION

AT&T faced a variety of competition in the collect calling marketplace. The competition ranged from store-bought calling cards to the Baby Bells, Sprint, and, most important, MCI, whose own collect calling brand, 1-800-COLLECT, was the industry leader. A different type of competition altogether was coming from cellular phone services. As more and more people within both the primary and the secondary target markets were becoming cell phone users, cell phones were cutting into the overall collect calling market. In fact, from the beginning of 1999 through the end of 2002 the collect calling market shrank approximately 68 percent. Likewise, cell phones were deemed responsible for the decline in the number of public pay telephones, obvious points of usage for collect callers.

THE BREAKUP OF MA BELL

In 1974 the U.S. Department of Justice (DOJ) filed an antitrust suit against AT&T, seeking the breakup of the telecommunications giant popularly known as "Ma Bell." The suit did not come to trial until January 15, 1981, however. With Judge Harold Green presiding, the trial lasted until January 8, 1982, when both parties came to an agreement that called for the breakup of AT&T. The breakup took place on January 1, 1984. The regional phone companies, the "Baby Bells," took over local telephone service, while parent AT&T retained long-distance service. In effect, this was how things had stood when AT&T was formed in 1885. The nineteenth-century model, if that was what the DOJ was striving for, was turned on its head, however. Not only did AT&T have competition from other long-distance service providers, but through mergers some of the Baby Bells quickly became stronger than AT&T. In 2005 the one-time monopolistic corporation was taken over by SBC, a former Baby Bell.

Gaining ground on the enormous lead in market share enjoyed by MCI's 1-800-COLLECT was the priority of the "Carrot Top" campaign. MCI's 1-800-COLLECT advertising also used celebrity spokespeople, ranging from basketball superstar Michael Jordan to pop singer Britney Spears. In addition, as Young & Rubicam acknowledged in the EFFIE Awards Brief of Effectiveness, 1-800-COLLECT had become the generic name for the category, making it more or less the default number for collect callers, which presented a major obstacle to overcome. Two other obstacles acknowledged in the Brief of Effectiveness were the facts that there was no obvious benefit to callers to switch to 1-800 Call ATT for Collect Calls and that the brand was not part of a subscriber service. Thus, continual reinforcement was required to gain market share.

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MARKETING STRATEGY

Young & Rubicam identified four objectives for the "Carrot Top" campaign, with the achievement of each of the first three objectives leading to the next one. The first of the goals was to instill recall of the 1-800 Call ATT number in the target audience. It was believed that this would lead to achieving the second goal, which was to increase interest in the brand. Increased interest would, it was believed, then lead to the third goal, an increase in market share. The final goal of the campaign was to equal or exceed planned revenue.

Young & Rubicam, which took over the 1-800 Call ATT for Collect Calls account from Foote, Cone & Belding in October 2001, retained Carrot Top in the advertising. The comedian had been AT&T's collect calling spokesperson since June 2001, and Foote, Cone & Belding deemed him able to deliver on the objectives of the campaign. The decision was not without controversy, however. Outside the target market Carrot Top was seen by some people as having an obnoxious persona. Media critics in particular seemed to enjoy reviling him, with at least one writer appearing to border on the libelous. In a Brandweek article by Todd Wasserman, Carol Eversen, general manager for 1-800 Call ATT for Collect Calls, responded to the Carrot Top criticism. "We've noticed it," she said. "He is noticed. [There are] no questions within the market we're targeting he's been a big success."

Carrot Top's success as a comedian was explained by his irreverent attitude, his sense of humor, and his in-your-face attitude. This was exactly what appealed to the target audience. Furthermore, within the spots he used catchy phrases that reinforced directly either the product or its benefits. These included turning the brand name into a rhythm—"C-A-L-L-A-T-T"—and by making it easy and cool to use the number—"Dial down the center." This phrase referred to the fact that the letters CALL ATT were positioned on the center numbers—2, 5 and 8—of the telephone keypad. Another pivotal phrase was "Free for you and cheap for them," bolstering the target market's argument for dialing 1-800 Call ATT, presumably to phone their parents.

Perhaps more than for most advertising campaigns, it was important that the "Carrot Top" spots be placed where they would have the highest visibility for the target market. The obvious choices, therefore, were music, sports, and sports entertainment, including professional-wrestling television programs. By 2003 "Carrot Top" spots were seen during telecasts of MTV and MTV2, VH1, Much Music, ESPN and ESPN2, and WWE professional wrestling. Not only did these shows attract a high percentage of the target market, but they also melded readily with Carrot Top's persona.

One interesting feature of the "Carrot Top" campaign evolved from a spot that was originally scheduled for theatrical release. Young & Rubicam hired...

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