Rohit, you *NEED* one of these phones. Speaking of which, "glocal"
sounds like a word Rohit would make up.
> "Glocal!" blurted one APL official. The room fell dead silent. Mr. Quish
> shuffled. The debate moved to other topics.
Full article follows...
To Sell a Phone, Iridium Plays
To Fears of Being Out of Touch
By QUENTIN HARDY
Staff Reporter of THE WALL STREET JOURNAL
June 4, 1998
Last November, a score of high-technology salesmen met in Rome and
bickered over their new product, a mobile phone that works anywhere on
the planet. High-priced advertising and public-relations specialists
watched as executives from India, Dubai, Germany and the U.S. clashed
over budgets, corporate backing and sales strategies. They did agree on
one key point.
They hated the phone.
"It's huge! It will scare people," exclaimed John Windolph, executive
director of marketing communications at Iridium LLC. It was a brick-size
device, with an antenna like a stout bread stick. "If we had a campaign
that featured our product, we'd lose," he said.
Today, attitudes have shifted. The phone is about to star in a $180
million campaign for global attention, including advertising, public
relations and a world-wide direct-mail effort. By fall, Iridium, an
international consortium based in Washington, D.C., hopes to score the
ultimate marketing coup: becoming a global brand, known and sought-after
the way Pepsi and Cartier are.
The phone is still big, as is its initial price: up to $3,000. But after
more than eight grueling months of under-the-gun and sometimes
over-the-top brainstorming, Iridium's ad wizards believe they can
persuade the rich and powerful that the fat phone is sexy, cool -- and
perhaps all that stands between them and devastating failure.
This is the sell of a new machine. Iridium's pagers and phones will
communicate with a network of 66 satellites orbiting 420 nautical miles
overhead and hook into a land-based cellular-phone network joining more
than 200 service providers in 90 countries. If the $5 billion project,
the product of a dozen years of labor by hundreds of engineers, works as
planned when it is switched on in September, no user need ever be out of
touch, anywhere.
No start-up has ever built a global brand as quickly as Iridium hopes
to, and just as Iridium's satellite technology is pioneering, the
marketing of it enters strange new realms. Iridium's ad agency, New
York-based Ammirati Puris Lintas, has drawn on marketing talents in
dozens of different cultures to find what it hopes are common themes,
hashed out in a series of conferences so complex and angst-ridden that
APL insiders call them "weddings."
The agency has prepared an arsenal of print and broadcast ads, made
deals with media companies for exposure, and even enlisted Nature in the
effort: Powerful lasers in select cities will beam Iridium's seven-star
Big Dipper logo onto clouds. One hope is that the hovering image will be
momentarily mistaken for a UFO. Imagine, in this millenarian time, the
buzz.
Still, the campaign is an exhausting gamble, played out in dozens of
international locales. Mr. Windolph, 31 years old, survives his millions
of air miles on megavitamins and sleeping pills. "People who don't
travel this much don't understand me," he says. Driving him is the
belief that "we'll change the world."
Even some backers of Iridium, though, say it is likely to be one tough
sell. The prime contractor is Motorola Inc., which created Iridium and,
with an 18% stake, remains its biggest investor. Motorola has blundered
in some of its businesses lately and badly needs a score.
But there are still questions about how much better Iridium will work
than an existing suitcase-size satellite telephone, which offers
crackling reception through higher-altitude satellites. Competitors,
meanwhile, are building rival satellite cell-phone systems. And other,
emerging technologies may match the globe-spanning reach more cheaply;
Iridium's service will cost as much as $7 a minute for some calls.
--------------------------------------------------------------------------------
Iridium and Its Rivals
Though Iridium will be first, it won't be the only group using
satellites to help offer mobile phone service world-wide. The field
includes:
Iridium Globalstar ICO Global Comm Ellipso
Headquarters DC San Jose DC DC
Start service 9/23/98 1999 2000 2001
Cost to build $5 b $2.8 b $4.5 b $1.4 b
Expected user
cost/min $1 - $7 Unknown $1.50 $0.50
Biggest
investors Motorola Loral, Qualcomm Inmarsat Mobile Comm, Boeing
Source: The companies
--------------------------------------------------------------------------------
Moreover, Iridium is a crazy-quilt alliance that includes arms of the
Russian and Chinese governments among its dozens of investors. Members
are loosely organized into 14 regional "gateways," named after the
ground-based switching stations around the world that will receive and
direct Iridium calls. Gateway representatives will sell the service
directly and through local cellular companies. With so many players,
Iridium's marketing effort has run a constant risk of collapsing into a
global garble.
"There is no word in Russian for marketing or public relations," Mauro
Sentinelli, Iridium's executive vice president of marketing, said after
one fractious meeting. "I need to get them to sell, but I can't kick
their a-- because I don't pay them."
Other unusual challenges have plagued the effort. Last fall, at one of
their first major meetings, Iridium's marketers gathered in New York to
listen to ad agencies bid for the Iridium account. Before the first
pitch, a woman representing the China gateway inexplicably began
pounding on a grand piano stored at the meeting room and later
exclaimed, "I am a talented person!" to her startled partners. After
conferring privately with her, Mr. Windolph kicked her out of the
meeting.
The gateway representatives who remained got an eye-opening glimpse of
how ad agencies angle for a juicy account. "We are a hothouse of
world-changing ideas," said Saatchi & Saatchi Chairwoman Jennifer Laing,
offering a "Master Brand Temple" and a brand-management tool billed as
"B-rand, R-esources, A-dvertising, Information, and N-etwork." TWBA
Chiat Day promised to create a "magic brand" for Iridium. Fallon
McElligot passed out piles of modeling clay, mangled by focus groups of
travelers. The lumps showed travelers' anger at technology, Chairman Pat
Fallon explained; his agency would calm it.
For its pitch, APL flew in managers from eight of its 77 country offices
to present an analysis of 600 global travelers, the kind of people
Iridium wants to reach. "They feel they are the chosen ones in the
company: special, tougher, with greater endurance," APL's Robert Quish
said. But paradoxically, the ad-agency managing director went on, they
also worry that people will think them frauds, or that they will miss
out on critical office politics while on the road, or that their
children will reject them for absenteeism. Tap into their worries, offer
control, reassurance and snob appeal, and Iridium will win, Mr. Quish
pitched.
The message of fear and flattery rang true to Iridium's own
globe-trotting executives; APL, a unit of Interpublic Group, won the
job. All marketing, whether for toothpaste or space phones, starts with
defining whom to target, and forging a clear product identity. But at
the Rome meeting in November, it became evident that Iridium's unique
array of global players would make that tricky.
Brazil, with few telephones, expected to presell 46,000 Iridium phones
before they were even available, to people exasperated by the country's
creaky phone system. Iridium Mideast wanted the phone in hunting-supply
shops; it was the perfect toy for desert falconry. An executive from
Iridium India, Jaidev Raja, planned exclusive parties where rich
businessmen might goad one another to buy the status symbol.
Mr. Quish was troubled by the scattershooting. "It would help us if you
could articulate the spirit of Iridium," the 37-year-old ad executive
told the gateway people. No one spoke. "I'm just listening to what you
have to say," he said, like a parent of a troubled teen. "Trust me, it
helps." Still nothing.
Breaking for coffee, Mr. Quish fretted and paced. "Am I being too
American, too pushy?" he asked colleagues. "Any words I can get, I can
use. Otherwise, we could just get on the next plane out of Rome."
So he tried free association, writing words on an easel: "car,"
"animal," "newspaper," "dress," "color." If Iridium were a car, he asked
the gateway representatives, what kind of car would it be?
"Ferrari," said Manlio Tarantini of Iridium Italia.
"BMW," said Thomas Lowenthal of Germany.
"Of course," Mr. Tarantini shot back.
Soon Iridium was a Land Rover and a Mercedes, a panther and a puma; it
was country green and heather green. It was accessories from Patek
Phillipe. It was dream, power, smart, a thrill. (It wasn't a metal,
though it is named after one, the 77th element in the periodic table;
that's because there were originally going to be 77 satellites.)
Later, the executives jousted over whether Iridium should portray itself
as one global system or many local ones. "Global or local? Global or
local?" they asked.
"Glocal!" blurted one APL official. The room fell dead silent. Mr. Quish
shuffled. The debate moved to other topics.
As the meeting closed, a worried Mr. Quish tucked the ideas into his
carry-on luggage, checking that his tape recorder had caught every word.
Ev Jenkins, APL's world-wide planning director, sighed. "The clients
always say they are Patek Phillipe," she said.
Mr. Windolph was less troubled by the dissonance. "The gateways bought a
pig in a poke," he said over dinner that night. "But in the end, it'll
make money and they'll all be happy."
A natural optimist and Eagle Scout, Mr. Windolph also was soothed by his
faith in Iridium's internal marketing head, the 50-year-old Mr.
Sentinelli, who had helped make Telecom Italia Mobile Europe's biggest
cellular operator. For Iridium, Mr. Sentinelli was already dreaming up
marketing schemes denying that $7-a-minute calls were expensive.
Iridium's customers won't be using the costly satellite segment unless
calling from the Amazon or some other place where lower-priced,
land-based cellular systems don't reach. He planned to stress how the
low frequency of satellite use would make the cost "disappear" inside
the overall bill.
"We can play with this to hide what is ugly and show what is pretty,"
Mr. Sentinelli said during the meeting. "It's a trick. It's a damn
trick. But we have to use every trick we have."
Mr. Windolph considered that inspired. Walking to his hotel, he peered
at Italian kids huddled on Rome's famed Spanish Steps in a soft rain.
They were chattering into Telecom Italia cell phones at a dollar a
minute. "Look at that," Mr. Windolph mused. "They'd rather talk on the
phone than eat. Mauro [Sentinelli] did that."
The Rome meeting had been rough, but at least the ball was rolling. Mr.
Quish and his colleagues spent a month in near-constant travel to the
gateways. They held internal video conferences among their New York,
London, Tokyo, Sao Paulo and Bangkok offices. Mr. Quish had so many
faces on his terminal that, referring to the opening credits of an old
sitcom, he joked of getting to "a full Brady Bunch."
Budget Skirmish
Money, suddenly, became a problem. Iridium's board had authorized $125
million for ad spending. But, concerned about spiraling costs of the
overall Iridium project, it cut that to $60 million. Mr. Windolph and
Mr. Quish felt that wasn't enough. They hatched a plan to reverse the
cut.
It unfolded on a freezing January day in New York. An APL team excitedly
laid out for gateway executives what Iridium could get if it was willing
to spend, say, $140 million. Coverage in 50 countries. Double-page
spreads in top magazines describing "success in all its forms," as
Marie-Theresa Dunn, APL's media director for Europe, put it.
They could hit the "pressure points" of high-powered travelers, such as
being in places where regular cell phones don't work and those fears of
the void-loss of control, disconnectedness-supposedly arise. "There are
moments when they are not in control that are incredibly stressful," Ms.
Dunn said. "We can exploit that."
With the low-end $60 million budget, by contrast, Iridium could get
coverage in the U.S., China and Brazil and ads in niche and industrial
publications. "Do we advertise in Oil and Gas Daily?" Mr. Windolph
privately mused. "Do we advertise in girlie magazines?"
Hustler or the high road? What did the Iridium want to be? The gateway
executives eyed each other, doodling in a half-dozen languages. Mr.
Windolph urged them to kick in several million more dollars each.
"My bottom line isn't that big," groused Mr. Raja from India. "Get out
of here." Still, Mr. Raja, a former Coke executive, thought that failing
to establish Iridium as a brand right out of the gate would be a
disastrous loss of opportunity.
In fact, the stark choice Mr. Windolph and Mr. Quish presented was
something of a concoction. They had decided to present a dazzling
high-cost campaign and then contrast it with an insipid low-budget one.
(Before the meeting, eyeballing the visual aids for the low-budget
pitch, Mr. Windolph murmured: "Great! They look terrible!") The idea was
to get the gateways to lean on Iridium's board for more funds, and it
worked. The gateways did put pressure on Iridium's board, and it kicked
the ad budget back up to $125 million.
Tension at the Office
But other problems threatened. By early spring, morale at Iridium's
Washington headquarters was sinking. Iridium Chief Executive Officer
Edward Staiano had doubled staff size and kept everyone in the same
amount of office space. The pressure was building. A personnel manager
warned Mr. Windolph that an employee had talked about killing himself.
Mr. Staiano knew what was at stake, though. "We can be the world-wide
connection," he said, sipping Chilean wine over lunch one afternoon in
New York with Mr. Windolph and Mr. Sentinelli. Make Iridium an elite
global brand at its debut, he told them, and "we will use this thing to
take over much of the world."
The world-conquering message would have an unlikely creator. "We all
hate advertising," said Roger Bentley, an APL big thinker named creative
director for Iridium, when he spoke to gateway representatives. "Ninety
percent of it doesn't work; it's just an interruption." Mr. Bentley, who
once made soft-drink commercials that ran successfully to the divided
cultures of India, Pakistan and Sri Lanka, aspired to create the last
10% of advertising "that works by touching people here." At a bar later,
his hand moved from his heart to his beer, and he wondered about the
reach of the satellites above: "Could I call the space shuttle with one
of these phones?"
The next day, at APL's New York headquarters, Mr. Bentley, who is 39,
wrestled with more earthly concerns. "You've got to crack Saudi Arabia
for us," said APL's Mideast representative, R.P. Kumar. "No legs,
nothing that looks like liquor, everyone very dignified. They aren't the
stressed-out, paranoid warriors Quish is describing."
Mr. Bentley rocked back in his chair. "Is there a time when they put on
traditional dress, with robes and daggers?" he asked. Mr. Kumar
mentioned the traditional Arab conclaves called majlis.
"Majlis." Before he could finish caressing the word, he was bombarded
with calls about Iridium matters from London, Germany and Japan.
Being There
Upstairs, meanwhile, his international creative team surrounded itself
in global sensation. Music seeped from a laptop computer as Thai
copywriters sat amid piles of magazines, books by Buckminster Fuller,
odd Japanese packages and videos -- "Blade Runner," "Being There,"
"2001: A Space Odyssey." They were picking through the world's cultural
bone yard, looking for ideas; the task spilled into a "war room" papered
with rejected slogans such as "One world, one telephone."
In an experiment, he paired an Iridium phone with a gorgeous model and
had her stand on a New York street corner while the ad people observed
passersby. The boys at the Rome meeting who had criticized the phone
would be shocked: Their "huge," 3/4 -pound phone was a hit. "Lawyers,
Wall Street people walked up to her," Mr. Bentley recalled later.
"Normal people didn't. It looks like it can talk to a satellite." They
also showed the phone at fancy restaurants and got effusive reactions.
That convinced Mr. Bentley the phone belonged in the ads, and APL
basically ran a contest, with all its world outposts submitting campaign
ideas. APL Japan offered a bit in which a South Pole penguin phoned a
North Pole polar bear. The Italians tried "Iridium World," a cartoon
version of opulence, where first class had 90% of the airplane and
champagne always flowed. New York came up with the winner: a series of
mysterious photographs and slogans designed to both flatter and frighten
the powerful.
The night before Mr. Bentley presented the images for approval to the
gateway executives, he slept for 45 minutes; a young copywriter, Peter
Kain, was found at dawn asleep on top of a photocopier that held one
last ad. Some of the photos in the campaign came from art galleries and
were printed on a gold mesh that looked like the golden foil on
spacecraft.
"If you're going to own the world," read the words alongside one exotic
cityscape, "you'll need a phone that can follow you around it." Other
ads showed an Iridium-deprived mogul unable to find his wife, or
searching for key executives while businesses collapsed.
In the Clouds
APL found a laser specialist who could beam Iridium's Big Dipper logo
onto clouds and buildings. There would be no explanation. "We want
people to start to ask 'Why?' " Mr. Bentley said to gateway
representatives. "We recruit the audience to be participants in the
marketing effort."
To ad departments of media organizations, APL argued that "if we choose
you, a year from now you can say you were chosen to launch a global
brand, [but] it'll be a competitive disadvantage if you aren't chosen,"
as Graeme Hutton, European media director, recalls saying.
The media also made pitches. The Economist Newspaper Group offered ad
space and an opportunity to give product demonstrations at some
conferences. Another big winner of ad dollars, Dow Jones & Co., offered
a broad package that included ad space in The Wall Street Journal's
print editions; commercial time on CNBC, with which Dow Jones has an
alliance; a chance to sponsor Dow Jones conferences; and access to names
in a marketing database. The Economist and Dow Jones conferences were of
keen interest to APL, which wanted to place the phones in the hands of
well-known executives.
(Dow Jones is also the publisher of the Interactive Journal.)
At the British Broadcasting Corp., meanwhile, Iridium plans to sponsor
short technology-news programs and buy ads on every one of the BBC's 64
commercial breaks on Sept. 23, the day of Iridium's commercial launch.
Mr. Windolph hoped for a plug from the National Aeronautics and Space
Administration when Sen. John Glenn goes into space later this year, but
the idea fell through because of concerns the satellites couldn't
sustain a link to the space shuttle. Mr. Windolph then began lobbying
for a presidential endorsement or a plug from tech-head Al Gore. No
decision has been reached, the administration says.
Finished Product
In March, gateway executives gathered to judge the finished effort at
the satellite-control facility of Thai Satellite Telecommunications Co.,
an Iridium investor. Outside, the heat was like a giant fist.
"Think about these ads in an emotional way," Mr. Bentley told the
jet-lagged executives, stacking before them images of golden deserts and
exotic empires. " 'The person at the hotel making minimum wage is your
only link to your office.'... We want to go directly to that anxiety."
He whipped through other facets of the campaign-the lasers, TV, print,
possible plugs from government leaders, deals with Internet search
engines. Ads would be regionally varied, but with a universal theme: The
thrill -- and anxiety -- of global success. "Someone travels to Osaka
from Portland -- they'll see an ad that looks the same, same mood, but
in a different language." (As many as 20 in all.) His listeners,
themselves disoriented travelers dreaming of changing the planet, were
rapt. Mr. Bentley concluded. They cheered.
No one knows whether consumers will also cheer when Iridium's ads hit
the airwaves this month, or when its phones go on sale in September.
Many experts are skeptical. But not the Iridium team.
This was "the last 'wedding' we had to throw," mused Mr. Quish, shifting
his eyes to the Thai jungle beyond as he headed back to his hotel. "Time
to start thinking about 1999. How do we get the customers to use more
minutes?"
----
adam@cs.caltech.edu
Simulations only tell you the consequence of assumptions. They do not
necessarily reflect reality.
-- Al Barr