Sony Ericsson connects on the web

Digital marketing is playing a key part in winning the mobile brand new customers, marketing director Ben Padley tells. Two major brands - one big company. Or so you might think from Sony Ericsson's success with its handsets in the mobile market over the past two years or so. Yet, as you drive on to the suitably clean and modern (in terms of British office design at least) Farnborough business park where the company's UK HQ is based, the brand hardly makes its presence felt. Tucked away in a building dominated by its main occupier, Systems Union, Sony Ericsson's branding is unobtrusive.

But, as users of its handsets will know, the smaller you are, the more effective you can sometimes be.

The real point, says marketing director Ben Padley, the power of its brand aside, is that the firm is still very much a start-up. Some three-years-old, the brand combines the might of handset maker Ericsson and consumer electronics giant Sony.

Combining a Swedish company with one from Japan, it boasts a design and communications heritage on the one hand with a history of marketing expertise and gaming, music and entertainment content on the other - as well as the millions that have been invested by both.

Of anyone, Padley will know these strengths. He joined Sony Ericsson as head of marketing UK & Ireland in February 2004. Ironically, for someone who works on a joint-venture, Padley has had experience in-house at both parent companies. In 1997, he moved to Ericsson and started up the marketing function for Sony's mobile division in October 2000.

When Padley arrived at the joint-venture, he became head of marketing, working alongside Peter Marsden, managing director UK & Ireland.

Although the company admits a slow start in 2001, last year - fuelled by sales of the popular T610 mobile - it started to taste success. SE is a toddler that's growing rather rapidly. In the second quarter of 2004, ending on June 30, it reported a pre-tax profit of Euro 113 million (£77.7m); its fourth quarterly profit in a row. Not only that, but according to Superbrands, it is also one of the coolest brands in the UK.

Digital has been core to this development, notes Padley, who oversees all marketing activity in the UK with SE's operator, retail and distribution customers, all other marketing communications programmes, PR, advertising and direct marketing. "It is an essential part of our marketing mix," he says. "If some companies are only spending five per cent of their budget online, it is usually 15 per cent with us.

For some handsets, the proportion of ad spend online can be up to 30 per cent."

There are several reasons for this, says Padley, but if you're one of the early technology adopters who wants to buy a top-of-the-range mobile phone, then you're likely to be looking online. "Our own sector and the way the market is segmented makes it worthwhile," he explains. "We found out very quickly that if you are a high-end, early adopter of technology, you will go to the web for information. It wasn't a great leap of imagination."

He adds: "It is a sustainable part of our marketing mix and it will continue to evolve in future. It's easier to invest - we learn more about our consumers and what we find is their different enthusiasms and preferences. It is not just a male proposition. In the 80s, the technology guy was the nerd; now the guy into technology is much more respected. Technology is perceived as an enabler - both in life and work.

"Pure decision-making is a lot more driven online, but people need tangibility and technology. We give them a brand experience online, but at the end of the day you need to explain the product," he adds.

Marketing mobiles, from the manufacturer's point of view, is not as straightforward as other products. For one thing, in the UK it is the networks that form direct relationships with their customers. So, ironically, the one form of digital marketing that SE does not do is mobile. It does not have a one-to-one connection, if you like.

Also, with its branding work, SE needs to have an impact, not just on the consumer, but on retailers and its distributors. Finally, people upgrade their mobiles somewhat more often than they buy a car, so handsets have a limited shelf-life and any campaign must be fast moving.

Digital marketing can help brands tackle these factors, even the one of planned obsolescence. "We still interact with the consumer direct through the web site," Padley explains. "It offers support to other media step-by-step." He says SE works closely with the networks. "We have also been mindful of our direct customers. We work with them to ensure that we don't bring a product to market too quickly." E

Digital agency Dare has worked with SE on three handset launches in the last 12 months (T610, T310 and P900) and will work on five more in 2004, including the launch of the Z500a clamshell phone in the US. "Sony Ericsson has always recognised the importance of digital channels in the marketing mix," says Gavin Bell, account director at Dare. "We do get a sense of importance about the role of digital."

The launch of the T610 was a key project in the eyes of Flo Heiss, Dare's creative director. "Arguably, it was one of the first sites that asked people to put their own photos - taken by the phone - online," he says. "It set people a challenge that plays off the design of the phone (black and silver) and the idea of contrasts."

A community of users was built around the site - which was shortlisted in the Revolution Awards 2004 in the Best Consumer Marketing category - and this effectively topped and tailed the above-the-line campaign, adding months to its life-span at least. "The T610 site went live about six months before the TV work. It helped build demand, but also helps a manufacturer like SE to build up supply. It gets the message to the early adopters and builds momentum," explains Bell.

The irony is that, although the T610 web site had a lifespan of some nine months, handsets are continually launched and upgraded.

To overcome this conveyor belt of new technology, Sony Ericsson promotes each handset through their own microsite, providing a brand experience, but still drags users back to its corporate hub (www.sonyericsson.com), which offers more detailed product information.

Toon Diependaele, director of digital marketing at Sony Ericsson, oversees sonyericsson.com. "We always say the key is to have a global framework with local implementation. With a global site, flexibility is key." And, it has to be, with the wealth of product information online. In some 63 different country areas, there can be as many as 30 main products live at any one time.

"We explain the user benefits in a non-techy way," stresses Diependaele.

"It is all about how this phone will make your life easy. It can also be about encouraging new user behaviour, as we did with the T610 and the use of MMS."

Design and functionality are key to this online creativity, as Heiss explains: "The product informs the idea. For the new S700 campaign (a megapixel camera phone), the picture quality of the phone - its performance - became the basis of the idea."

Also, the sleek, new K500 camera phone, currently one of Sony Ericsson's great hopes for the final quarter of this year, is one of the handsets that will find a major focus online; some 30 per cent of its ad budget will be spent there.

This faith in digital marketing is not only supported by results. It should be natural for a firm founded in 2001 and selling E mobile phone technology to trust digital. As Padley points out: "Since the inception of the joint-venture in October 2001, there was a realisation - and a mandate - that we are in a digital age and everything about Sony Ericsson has to recognise that. Even the logo is dynamic. What is so surprising about this industry is the speed with which it develops."

Naturally, the company's products are dynamic too. The T610 camera phone, with its black and silver visage, has already proven itself to be a popular classic, but still a new range of handsets has been launched this summer.

With its 'Phone meets camera' strapline, the dual-fronted K700 is currently at the centre of an aggressive marketing campaign. It has even seen SE make its interactive television debut, with ads on Sky and channels like UKTV and Flextech.

To push the new handset, Sony Ericsson has also pioneered the use of 'two-sided' online banners (see Revolution, October 2004, p4). As with its successful online work for the T610, a microsite has been built to provide consumers with the brand experience, which chimes in with the handset; for detailed product knowledge, they're directed back to a dedicated area of sonyericsson.com.

The Dual Front strategy is key for the new generation of camera phones.

It encourages users to hold the handset horizontally in two hands when they take a picture. Padley explains why: "Megapixel products are more prone to camera shake. QuickShare makes our handsets easy to use for picture messaging." QuickShare, the one-click mechanism of sharing pictures from Bluetooth, is common to all Sony Ericsson camera phones, which poses another issue for the marketer.

Themes can be expanded from the functions of the handset. The new K500i, which is promoted on sleeptomorrow.com, takes the idea that technology should be about saving time. Meanwhile, users are urged to seize the day and pack as much into their life as possible.

So, for a handset that offers picture capability, 3D gaming and good quality MP3 playback, a broader theme is used to show how much more can be done. The web site is the mechanic by which users can enter a competition to suggest their ideal, fully packed, five-day adventure.

A web site (www.theartofimaging.com) has been set up to follow this theme for longer than the lifecycle of a single handset.

SE sponsored an exhibition in September, featuring pictures taken by celebrities on the K700, which was not only shown offline at the fashionable Proud Galleries in North London but was also put on the internet. "The web site is the hub of the wheel really. It links both to the event and to the sponsorship. It is a way in which we can continue to develop our brand positively online in 2005," says Padley.

Richard Dorman, marketing manager at Sony Ericsson in the UK & Ireland, adds: "The site will enable us to continue the theme. It gives us the opportunity to extend the life span of our products online." This theme should continue in the future.

However, as a brand, SE is always trying to do things a little differently with its online marketing. So it used iTV as a channel when the opportunity arose. Padley explains: "Interactive TV as a medium always presents the problem of the initial outlay in production costs and accountability, but we went with the creative - the advertising idea was very strong."

The complication when marketing handsets is that, by and large, it is the networks - from Orange to Vodafone - and the retailers, such as Carphone Warehouse, that sell them. This involves a heavy emphasis on co-ordination between SE and its customers (again, the networks, not the consumers). For example, it linked with O2 in a Pure Style campaign to promote the T630 handset (see box). E

Padley is keen to treat each project as a collaboration. "It is a dual approach," he points out. "If we are doing solus work, we are all about creating desire for the product and a great part of that relies on good design. When it comes to co-operation, we can work with customers." It's quite a long process.

"We are in the process of creating desire with our customers. We adapt the particular proposition and product to their own segmentation of consumers, from online CRM to retail. When we have an advance like a Smartphone, it is different than something that is more of an entry-level product.

There, content is something that drives sales of the product; free ringtones and Java games are driving sales," he adds.

In 2004, as even Martians must know, the networks may still drive text and data services but it's picture messaging that is the real focus of their marketing.

SE is no different. "We are really concentrating on imaging. Imaging is a trend that is going to continue. Consumers want to own their images and the artistic value is important."

Some of this confidence has been backed by SE's experience in Japan.

In under two years, some 95 per cent of all mobile phones sold in the country are now picture-enabled. In the UK, it has been the T610 handset - to some acclaim - that has triggered this opportunity.

Next year, entertainment, with the advent of handsets such as the S700, will be more of a marketing proposition. Gaming has been much talked about, but music is also a major area for improved services.

According to Padley, the advent of handsets such as the K700 and S700 place an emphasis on high sound quality. Could this be a clue to where the brand will go in 2005?

"Absolutely," enthuses Padley. "The proposition that we take to the market relies on a buy-in from the networks. The great thing about music is that it appeals to all people - it is just that they have a preference for different genres." Dorman adds: "Even now we have got music services like Play Now ringtones, which are MP3 files with the ensuing quality."

In mobile, from all sides of the industry, 3G is the next big opportunity.

It remains so for Sony Ericsson, as much as for the networks, but nothing has been revealed. "It will drive a new medium, but we will have to manage that with the networks. The way we market our products - and the products themselves - will evolve as digital evolves," Padley promises.

MOTOROLA LEADS MARKETING FOR RAZR V3 WITH DIGITAL

Many handset manufacturers see digital as a key marketing tool.

Motorola used the web as the lead channel to push its Moto Razr V3, which it claims is the "ultimate in mobile design".

Simone Sweeney, Senior EMEA Motoweb marketing manager, explains: "We used hellomoto.com to tease the V3 and encourage users to find out more by registering their interest in nine countries. It will culminate in a call to action to buy the V3 with a second phase of banner and rich media ads."

Sweeney says it raised UK registrations by 50 per cent on the previous quarter: "We partnered two key retailers to offer online pre-order and the result has been tremendous." Motorola sees digital as vital for brand building and direct response, she adds. "Online brings the brand to life, making it more tangible for consumers. The web gives people a chance to experience products and we can give a more bespoke offering." The Moto Razr V3 is an example of a '360-degree' launch campaign, which Motorola claims is a hall-mark. "The web offered a great way to communicate the slimline, high style of the V3 and position it as a must-have product to the right target audience."

O2 FOCUSES ON CLARITY OF MESSAGE

Handset manufacturers have to develop firm relationships with the major networks, O2, Orange, T-Mobile and Vodafone, when marketing their products.

Digital initiatives are no exception, says Vik Patel, director of Vendor Strategy at O2. "With every launch, we realise progress in technology is still difficult to convey and adopt, but with all those changes we need to send a clear message. We work out what is attractive to consumers and the phone's unique selling point."

When deciding on which project to work, factors to consider can be fashion-based, technology-led or the application of particular services such as music.

One O2 promotion, centred on Sony Ericsson's T630, worked well for the network. Design was key: "It was attractive and the colour (white) not only meant it was 'iPod-esque' and desirable, but it could resonate with a female audience," Patel says. "It was also hi-tech."

Online is a vital channel for users researching purchases, even if they don't buy online. "The higher the value of the customer (and handset), the more the decision is made and influenced with their peer group," Patel concludes.

CORPORATE HIGHLIGHTS

April 2001 - Ericsson and Sony announce their intention to form a

joint-venture; the new company is equally owned by Ericsson and Sony.

October 2001 - Official start of SEMC (Sony Ericsson Mobile

Communications).

March 2002 - First product announcements from SEMC.

December 2002 - First smartphone P800 hits the shops.

February 2003 - First 3G phone; Z1010 announced.

March 2003 - The T610 has its premiere.

March 2003 - The parent companies invest more money in the

joint-venture.

September 2003 - SEMC shows a profit for the first time.

June 2004 - Miles Flint appointed new president of SEMC.

July 15 2004 - SEMC reports profits for the fourth consecutive quarter.

Sony Ericsson is responsible for product research, design and development, as well as marketing sales, distribution and customer services. The company's global management is based in London; R&D is in Sweden, Japan, China, US and the UK. In total, the firm has approximately 3,500 employees around the world.

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