Commingling of media helps companies build their brands and customer base

Sony Playstation Underground has been anything but subterranean when it comes to reaching its audience.

The subscription-driven club - for video gamers who use PlayStation hardware - targets consumers with an integrated mix of direct mail, catalogs, a Web site, a CD magazine, TV spots, package inserts, space ads and even billboards.

The combined efforts, says Peter Dille, Sony's senior director for product marketing, reaches 99% of the market. Over 11 million of the $149 consoles have been sold since their introduction two years ago, and Sony hopes to bring the total to over 18 million by the end of the year.

"Anything that makes the PlayStation customer relationship stronger," Dille says, "will sell more product."

Sony isn't alone in its efforts to use integrated marketing to build the relationship between brand and consumer. Prodigy Internet, for example, uses a variety of direct response vehicles to brand its Internet access software and increase membership.

Doug Ruble, management supervisor, Rapp Collins Worldwide, Dallas, notes that integrated marketing is more than "getting all your arrows going in the same direction. Everything that goes out there - advertising, mass media, direct, Web sites - needs to work in concert to deliver one large arrow."

But Sony Computer Entertainment America had less abstract goals in mind when it hired Rapp Collins two years ago. Faced with the launch of Nintendo 64, Sony wanted to maximize customer loyalty to its PlayStation.

Sony recognized that hard-core garners were their best customers, but didn't know who or where they were, so they started by building a database from surveys, e-mail and registration cards. It turned out PlayStation gamers were male, ranging from 12 to 34 years old, with the core market being 17 to 24. Typically they spent two hours or more daily playing and often owned more than one system. While they were eager to be the first to try new game releases, they weren't interested in joining a club. However, they were interested in having a dialogue with not only Sony but also other gamers (many communicate online).

The creative trick was to develop a vehicle to initiate that dialogue and not be seen as corporate sales. The result was Sony PlayStation Underground, a quarterly CD magazine, featuring software demos, game tips, interviews and behind-the-scenes looks. Now six issues old and with a circulation of 60,000, it is formatted on a disc playable only on - naturally - PlayStation units.

Subscribers also get access to a members-only section of the PlayStation Web site offering game codes and chat rooms. Sony and Rapp Collins estimate a 7% response rate to sub otters included in hardware and software packages, such as Crash Bandicoot or Final Fantasy VII.

In a 12-month period, PlayStation Underground members received some 47 mailings from Sony, nine for third-party software developers and five from PlayStation distributors. Overall, PlayStation has a $140 million marketing budget, says Dille.

Future plans include creating greater synergy between television spots (appearing during programs such as "Frasier," "3rd Rock From the Sun," during NFL games and on cable), print ads (in magazines such as Details, Rolling Stone and Sports Illustrated) and other marketing efforts. Space ads include the Web site address and sometimes a toll-free number; the TV spots currently do not.

In slightly more than two years, the PlayStation database has grown from 100,000 to 1.5 million names; owners average more than six $39 to $49 software purchases a year for each hardware unit compared with the industry norm of three to four. To capitalize on this buying power, Sony has just launched a catalog of branded merchandise offered by mail and online. However, the catalogs - also distributed at concerts - focus on products like clothing and CD carrying cases and don't sell software (Sony wants to keep its retail partners happy).

Prodigy Internet's vice president of member management Monica Sanchez describes her company's integrated marketing program as "member management" - it wants to keep its new members' relationship so strong they'll stay enrolled "forever."

Robert Lieber, head of the agency Lieber Levett Koenig Farese Babcock, New York (which works with Prodigy), noted that the Internet service provider (ISP) was losing approximately 10% of its members each month.

For all intents and purposes, he says, "Prodigy was starting over every 10 months."

Half the problem, says Lieber, was how new members were brought in. Prodigy was offered as a free trial on some 70% of new computers sold. According to Lieber, Prodigy didn't even ask for a credit card number.

"If they don't commit [by giving their credit card number], how likely are they to convert?" Lieber asked.

Half the solution, Sanchez explains, was segmentation. Prodigy used segmentation to identify who was most likely to stay and target those at risk of leaving with a retention program. It also helped identify "spinners" - new members who will leave no matter what Prodigy does.

Prodigy's ideal consumer is relatively older and more educated. "They're not here for the free offer," Sanchez said. "They're here for the experience."

New members - often acquired through traditional direct marketing techniques as well as bundled software - are thanked for joining with a free pocket Internet dictionary. And a few days after a new member joins, representatives of the ISP call to find out how he or she is doing with Prodigy. Online sweepstakes, direct mail programs and an online welcome center offering tutorials for new members are also part of the mix.

Sanchez notes that Prodigy prides itself on the fact that to receive commercial e-mail, Prodigy members must opt in. If a member volunteers to receive e-mail from companies, he or she is awarded points which turn into such prizes as downloadable gift certificates for Macy's, The Gap or Tower Records.

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