CMO Spotlight: Selling Televisions With Television

Sony CMO touts power of commercials to drive 3D, HD

Why This Matters

At a Glance: Sony Electronics

Ownership:
Part of Sony Corp. of America, the U.S. subsidiary of Sony Corp.

Based in:
San Diego

Global sales:
$78 billion for the fiscal year ended March 31, 2010. Consumer products and devices, including televisions, account for 40.5% of sales. Of Sony’s worldwide sales and operating revenue, 22.1% comes from the U.S.

Corporate employees:
167,900 worldwide

Ad spending:
$49.02 million in 2009, including $20.3 million on Bravia televisions, $13.4 million on Vaio computers, $8.3 million on Sony Readers, $2.6 million on Alpha cameras and $2.1 million on Cyber- Shot cameras

With his company's leadership position in selling televisions-and its film and television studio business-Sony Electronics CMO Michael Fasulo embraces the philosophy that there's an advantage in engineering and selling products that go from the lens to the living room. But with the television set business changing just as quickly as the content delivery world, his task is not only to keep up with the latest from widgets to 3D, but to tell consumers why they need them. In an interview with B&C Business Editor Jon Lafayette, Fasulo addresses the challenges of marketing during these times, when technology is changing both the product and the way it's sold. An edited transcript follows.

Television technology is advancing: There's HD, 3D, new forms of connectivity. How does all of that change your marketing message and strategy?

The strategy doesn't change. The strategy we've employed that has worked very well and will continue to work very well is focusing on customers from the point of view of what their interests, passions and needs are with all of this new technology. From a marketing point of view, the communication of that gets a little challenging because it's a lot for me to say in one sentence. HD and 3D would probably be the best examples where we're not messaging only the device itself, which we could very clearly and command a strong market share simply on the quality of the device. But the consumer's perspective is, why do I want HD, why do I want 3D, why do I need it? The reason is, it's going to be a much more enjoyable experience.

When you're selling the television experience, is television the best way to do that, or are people happy with their TVs?

In America, there are more TVs in a household than there are people, so folks are always looking at upgrades or are always looking at their next television. That's a great thing. What we use television advertising for is part of the total conversation with the consumer. I am a firm believer that television advertising is still alive and well, but used independently, it's not going to achieve a goal. The best results we've seen in marketing is when we can integrate that.

Does TV have same role if you're selling TVs or computers?

It is the same role; however, I will say that making televisions in the electronics industry does give you a halo to other product categories, even if they're unrelated. So, when we are promoting our televisions in our integrated approach, I see a lift in cameras and I see a lift in audio, and I see a lift in personal devices unrelated to the TV itself because of the volume and the mass of that one centerpiece in the home.

How do you measure which marketing activities generate sales?

In some cases, that's easier done than in others. Anything online you can measure pretty precisely. What I try to avoid is associating the last activity with the reason for the sale, because some things you can measure better than others, but it's the cumulative effect that really drives the result.

So, we use a number of different tools. Internally, we have a tool we call Marketing Return on Investment. It looks at everything going on in the marketplace and then gives you a return on your spend across a long tail of media. What we do is look at that for our planning purposes-where do we put the most investment and focus to generate the best results? You will see changes, like trends in social media that have had a significant impact on changes of investments we've made in that space. [Same with] online search. You can see those changes very quickly, and it gives you a lot of flexibility to move things.

That being said, if you want to reach a mass audience, your TV commercials are still going to reach your mass audience.

Sony uses personalities in a lot of its advertising, Peyton Manning, Justin Timberlake. How were those guys chosen and how does that affect the way you use media in your marketing?

Some sleepless nights. It's really difficult to select individuals to associate with your brand, especially when we've got long-standing credibility with consumers for quality. We own quality and that was given to us by consumers because our products are good. They're great. They're the best on the market. So now you start getting into a little bit of an area of risk when you start to associate individuals to that brand proposition. It is something that we take really seriously and we really go through a tough evaluation when we do this.

Now the reason we are doing it is the association. So with Peyton Manning, Peyton Manning is tremendously talented, very ethical, great morals, good citizen. What he stands for is what our brand stands for as well. But the affiliation is football, or if you want to look at it broader, sports.

So by working with Peyton we're able to reach a broader passion of sports, more specifically football, without having to make significant licensing and sponsorship investments with franchises that just give us the use of marks and an association. So we're able to make that connection in a much more affordable and personal way. But I've got to tell you it's a tough business to be in because if you make a mistake there's no way of getting away from it.

The same is true with Justin. Justin is an entertainer and our company is entertainment and he gives us that great association. And lately you've seen Taylor Swift. Taylor provides all of that plus this whole attraction with youth and her loyalty to her fans and her engagement with her fans socially and virally. If you've read anything about Taylor, she's so grateful for her fan base and everything that she stands for is what they stand for.

So that's another great association that gets us to a targeted audience of youth.

You advertise heavily in football. What can we expect this season?

You can expect we'll continue to advertise heavily in football and sports in general. We were also significant in World Cup. Our 3D spot at World Cup was actually rated a top spot.

You're going to see us heavy up in sports and entertainment and the reason being is that's what matters to consumers and that hits their passion points.

Is there anything that media vendors, particularly TV people, can do to help you get a better handle on what's working?

Absolutely. We use Universal McCann as our agency, but we also work directly with the providers themselves. And I think where that help comes in is with targeting audiences. If you look at a breadth of product line that Sony delivers to the market that covers all of the interests of consumers of entertainment and electronics, you're dealing with a very broad segmentation and demo of a consumer. The media partners can help us fine-tune that media buy to get to the salient audience. What works best is when we can put multiple vendors in the same room that deliver on different areas. Connecting those pieces can truly have an increased return on investment.

I've read that electronics still seem to be selling well despite the economy. Why do you think that's happening?

There's a number of things going on there. Clearly the economy and nesting is a big component. The term "stay-cation," people are creating their own local ways to enjoy time off with the family. It drives to a good proposition of electronics being that glue, that way to bring the family together. The way to enjoy entertainment in the home is with the purchase of devices like Sony's 3D television.

It's an investment, but I know I'm going to get benefits and results of that investment over a long period of time. Today I can buy Sony's 3D television and know I'm getting the best, high-quality high-definition experience in the industry and I'm protecting myself from obsolescence in the future.

Right now the 3D proposition is an interesting one because we're building content and I think the good news with Sony and 3D is we're building content at the same time we're building devices. So it's not a chicken or egg. But there is a ramp. So from a ramp point of view in an economy where people are spending more time inside the home, less time spending money on other things, how do we deliver value and still make sure that people are comfortable that their investment today is protected in the future as content becomes more available. And that has been our focal point and frankly it's been working very well.
 
Is that an explicit part of your marketing message, that you invest in these products and they will pay off in entertainment and enjoyment?

Yes and no. At some points it's implicit, but at shop front for instance, it is very explicit. Online, very explicit. Where we can have that conversation with the consumer, that's precisely the strategy. To take them out of the confusion point, to take them out of the anxiety of 'oh my god if I buy this today am I really going to be able to enjoy 3D because content is not readily available?' Yes. That's exactly our strategy. You buy the television today. It is the best high definition television you can buy and will deliver the best 3D experience with the content available today and with future content coming out.

You are social responsibility officer for the company as well. Do those activities dovetail somehow with the marketing efforts and media spending you're also responsible for?

The common part is focus on the consumer. And the uncommon part is marketing versus cause. I'm not interested in taking what we're doing to improve the environment and using that as a marketing campaign. Now we do need to communicate that, so my area of responsibility covers all communications. We do need to communicate it from a consumer benefit point of view if it is relevant.

I'll give you an example: recycling. We need to communicate to consumers how easy it is to recycle your electronics waste, because that's good for our environment, right. Not to get them to go out and buy more Sony televisions, although I think they will because they believe we're helping the environment. We want to be within a 20-mile radius of a consumers' home for convenience for them to dispose of their electronic waste. Well we've got to tell them where those locations are and we've got to tell them how to go through that process. So that's the communication part.

And from the point of view of authenticity, we run events regularly where we'll take back anybody's brand off a consumers hands to make sure they're being disposed of appropriately and not harming the environment. That's authentic.

And that's really where my role comes in from a point of view of responsibility. Just making sure we're doing everything we committed to and that we're doing it for the right reasons, which is to improve the environment.

E-mail comments to jlafayette@nbmedia.com and follow him on Twitter: @jlafayette