Advertising Campaign
May 2, 2011
1
Subliminal Inc.
121 Carnegie Building
University Park, PA 16802
May 2 2011
SiriusXM
1221 Avenue of the Americas
New York, NY 10020
Dear Sirius XM CEO Mel Karmazin,
Within this report, you will find information on the recommended campaign for Sirius XM Satellite
Radio. This campaign is designed to increase awareness and develop stronger brand equity. It will
provide a current situation analysis on Sirius XM’s background and history, target audience, market
analysis, competition and SWOT analysis. The report will also discuss the recommended target audience,
creative strategy and overall campaign recommendations.
The recommended campaign strategy is a direct result of a combination of primary and
secondary research findings. The research collected has provided insight into the recommended target
audience and is the basis for the creative strategy. The goal is to increase awareness while unifying the
Sirius XM brand and products. Individuals between the ages of 18 - 44 will make up the target audience.
This campaign is meant to increase brand awareness and brand equity by using promotions, online social
media, and billboard advertisements.
On behalf of Subliminal Inc., we would like to express our excitement about the launch of this
campaign. We are looking forward to working with you in the future and are looking forward to receiving
any and all feedback. If you have any questions or concerns, please do not hesitate to contact us. Thank
you for your time.
Sincerely,
Subliminal Inc.
Christopher Balogh
Aaron Bonner
Amanda Hartmann
Stephanie Mastrobattista
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Table of Contents
I.
Cover Page
1
II. Letter of Introduction
2
III. Table of Contents
3
IV. Executive Summary
4
V. Situation Analysis
5
•
Company Analysis
5
•
Market and Product Analysis
6
•
Competitive Analysis
9
•
Consumer Analysis
12
VI. SWOT Analysis
•
SWOT Summary
VII. Campaign Recommendations
16
17
18
•
Marketing Goals
18
•
Communication Goals
19
•
Budget and Contingency Fund
20
VIII. Media Strategy and Tactics
21
•
Media Selection
21
•
Reach and Frequency Goals
23
•
Scheduling Pattern
25
•
Spot Markets
25
IX. Creative Strategy
27
•
Creative concepts
27
•
Creatives
28
X. Promotional Strategies
32
XI. Campaign Benchmarking
32
XII. The Next Campaign
32
XIII. References
34
XIV. Appendix A
39
XV. Appendix B
43
Appendix C (attached)
Paper #1 - Campaign Proposal (attached)
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IV. Executive Summary
Through extensive research, we have found that Sirius XM is a company without a strong brand image,
who has many internal issues. Their current target audience is very niche, with most of its subscribers
older than 45 years of age. The market is extremely competitive, with services such as Pandora offering
more customizable audio entertainment at a better value. Customer service may be the most prominent
weakness, but the lack of integration between the two brands and failure to innovate towards new
technology have also discouraged current and potential subscribers. Sirius XM has strengths in their
variety of the most up to date audio entertainment, and convenience in the number of ways to listen.
With Sirius XM needing to make many important improvements, we propose a teaser campaign,
occurring between the months of July 2011 and June 2012, to precede a more extensive campaign. This
teaser campaign will focus on raising awareness of the Sirius XM brand, and the future improvements
that will be implemented. The teaser campaign will precede the campaign to “re-release” the brand in the
near future with an entire new brand image. It is our recommendation to prepare for this “re-release”
directly following Q2 of 2012, as long as sufficient improvements are implemented by that time.
The teaser campaign will target the audience of anyone 18-44. This younger age group is tech-savvy,
and although they may be using competitive services, they present an opportunity for Sirius XM to
become a dominant force in the audio entertainment industry. Research indicates that the younger
generation is largely unaware of the services Sirius XM has to offer. Sirius XM needs to first generate
awareness of the brand and its upcoming improvements, while solidifying a brand image among
consumers before attempting to increase subscriptions. The expanding smartphone market coupled with
the release of the Satellite Radio 2.0 application can also help Sirius XM raise its share in the market.
The teaser campaign will also work towards displaying Sirius XM as reputable, reliable, customer
focused, innovative, convenient, and integrated. The recommended budget for the campaign is $300,000,
a slight increase from the previous years. Our creative strategy will focus on the implementation of heavy
online advertising, emphasizing social media. The use of billboard and radio advertisements on Sirius
XM’s own stations will also be used. The campaign will be national and spot, using pulse scheduling.
Celebrities will be used for advertisements, all of which have been featured on Sirius XM satellite radio.
Promotional strategies will include a bumper sticker giveaway, raising awareness and promoting
discussion of the brand. This campaign will be using the slogan “The Unveiling of Innovation,” and use
the new Sirius XM dog as a trade character. This character will combine the old Sirius dog with the XM
sound waves, conveying the message of a fully integrated company.
Included at the conclusion of our teaser campaign, will be a brief overview of what the more elaborate
follow up campaign may entail. The most important factors for the success of the follow up campaign will
be that the Sirius XM brand work diligently to correct all the previously mentioned issues. This campaign
will be much more extensive, thus requiring a substantial increase in the advertising budget.
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V. Situation Analysis
Company Analysis
Sirius XM is the product of the 2008 merger with satellite radio industry leaders, Sirius Satellite Radio and
XM Satellite Radio Holdings, Inc. (FORM 10-K (Annual Report)). Sirius XM is now the sole provider of
satellite radio within the United States, and currently provides service to over 20 million subscribers
(FORM 10-K (Annual Report)). The service broadcasts more than 135 channels of commercial free
music, premier sports, news talk, traffic and weather (FORM 10-K (Annual Report)). Although both parent
companies had rocky beginnings, since the merger the brand has shown a gradual increase in its stock
(FORM 10-K (Annual Report)). Despite its improvements, the company reportedly has around 3 billion
dollars’ worth of debt (Costa).
Sirius XM’s mission is to provide a multi-channel, nationwide audio service with high quality digital sound
and an unprecedented variety of programming (FORM 10-K (Annual Report)). Sirius XM’s products are
designed to provide quality audio entertainment to its customers in every possible setting, from the car
radio to the increasingly popular smartphones. Whether you are hanging out at home, at work, driving in
a car, relaxing in a boat, or just walking to class, Sirius XM aims to provide their customers with any type
of audio entertainment that they desire (FORM 10-K (Annual Report)).
While Sirius XM does succeed in giving their customers the quality audio entertainment it claims to
provide, customers testimonials claim the company fails to present a strong image for which they can
associate with the Sirius XM brand (SuperH)(Green). The brand also fails to represent itself as one
unified entity since the 2008 merger (Green). The division between the two companies becomes quite
clear when customers go onto the Sirius XM website to view the packages and can choose between
“Sirius A La Carte Package” and the “XM A La Carte Package” (FORM 10-K (Annual Report)). This gives
off the impression that the companies are independent and not merged. There is also a difference when it
comes to the radio within a certain vehicle dealership. For example, if a consumer wants to get an Acura,
they will have “XM” service, but if they choose to buy an Audi, they will receive the “Sirius” service (FORM
10-K (Annual Report)). These differences within the Sirius XM service may keep its customers from
viewing it as one fully integrated company. As Michael Greene states in his online blog, “The crux of
many of the issues seems to be that despite the unified Sirius XM brand, the two companies are (from
what it seems) not integrated at all.” By offering and referring to these services separately, it presents
both a non-unified image as well as confusion among consumers.
Not only does this issue confuse customers and damage their brand image, but it also affects Sirius XM
negatively in other ways as well. By not completely integrating both companies Sirius XM ultimately hurts
itself internally. Even worse than having a confused consumer, is having a confused customer service
employee who is also frustrated with the service. When looking for reasons why customers discontinue
using Sirius XM, or major complaints of the company, customer service was one that appeared most
frequently. As one blogger, “CalMike,” wrote on an online blog about Sirius XM customer service in
December 2010;
“Since the day after I got the car, I've spoken with no less than ten different customer service
agents at call centers in India, each exhibiting varying degrees of incompetence. Each time
they fixed the Weather service, I lost some of my XM channels, notably Howard Stern, and
vice-versa… Anyway, as big of an improvement as XM's corporate customer service was today
over the generic Indian call center debacle, the kind Nova Scotians still weren't able to resolve
the problem for me, at least not yet. The rep was himself totally perplexed and frustrated by the
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whole ordeal. He assured me that he or the other woman I spoke with there will be personally
contacting me tomorrow with information about how this will be resolved. Maybe they'll get a
team of engineers on it. Should I be holding my breath...If it weren't for Howard Stern and the
NavTraffic, I would tell them to take the trial subscription and whatever credit my account still
had and shove it (CalMike).”
These issues present Sirius XM with an opportunity to improve their customer service and work on
integrating both Sirius and XM into one unified company to present to consumers. This will help them
begin the process of building up a positive and solid brand image that the consumers can associate with
Sirius XM.
Market and Product Analysis
The 2010 financial and operating results of Sirius XM reported having upwards of 20 million subscribers
(“Sirius XM RADIO INC.”). Sirius XM also produced a total revenue of $2.81 billion dollars in that same
year. (“Sirius XM RADIO INC.”) The following table reconciles the Sirius XM actual revenue to their
adjusted revenues for the year ended December 31,
2010:
David Goldman, a staff writer for CNN Money, stated that the “total revenue from U.S. music sales and
licensing plunged to $6.3 billion in 2009, according to Forrester Research. In 1999, that revenue figure
topped $14.6 billion.” (Goldman) Joshua Friedlander, vice president of research at RIAA, also commented
on the issue. "There have been a lot of changes over the past 10 years. The industry is adapting to
consumer's demands of how they listen to music, when and where, and we've had some growing pains in
terms of monetizing those changes." (Goldman)
The digital entertainment industry has handled these changes and adapted by innovating the way
individuals consume their desired content. These effects have had impacts on how audio entertainment is
distributed. Companies such as Pandora, Netflix, and Apple are developing new software and
applications to use within devices such as personal computers, mobile phones, laptops and most recently
tablet computers (Penndola). According to Joshua Norrid, vice-president of travel and leisure at Progress
Software, "Technology innovation should be looked at as an asset; it represents a beginning, but it is a
journey and needs regular investment to keep it moving" (Phillips).
Sirius XM currently offers a satellite radio platform that provides a variety of channels including 100%
commercial free music, sports, news, talk and entertainment. Various entertainers such as Howard Stern,
Martha Stewart, Oprah Winfrey, Jamie Foxx, and Barbara Walters broadcast content available only
through Sirius XM (What is Sirius XM?). Sports programming includes the National Football League,
Premier League Soccer, Canadian Football League, NASCAR, Major League Baseball, National
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Basketball Association, National Hockey League, PGA Tour, and the Indy Racing League (What is Sirius
XM?).
There are various ways in which consumers can access Sirius XM programming. In the car, at home, and
on the go are the three options currently available. To enjoy programming in the car, an in-vehicle radio is
required. Similarly, a stereo, boom-box, or Internet connection is required to use the product at home or
on the go. There are various radio types that range from portable radios with an estimated price of
$159.99 to in-vehicle radios that range from $49.99 - $209.99. These platforms can be accessed through
a subscription based service that Sirius XM offers. They include Sirius Everything Plus the Best of XM,
Sirius Everything, Family Friendly, Special Interest, A La Carte, Sirius XM All-In-One, Internet Radio and
Sirius Backseat TV. Each option offers different content which reflects the cost of the subscription. The
services range from free trials and the lowest price of $2.99/month to the highest price of $19.99/month
(What is Sirius XM?).
Customer Service Scoreboard is an online service that provides viewers with customer service ratings
and comments for various brands and companies. According to their website, Sirius and XM customer
service ratings and comments are completely separate. The following diagrams were taken directly from
Customer Service Scoreboard and represents customer service rating for Sirius and XM Radio
respectively (Customer Service Scoreboard).
Sirius Radio - Customer Service Ratings
Sirius is ranked #292 out of the 406 companies that have a CustomerServiceScoreboard.com rating with
an overall score of 29.38 out of a possible 200. This score rates Sirius customer service and customer
support as Terrible.
The following statements are excerpts from Sirius Radio customer comments or employee comments:
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Sirius:
●
●
●
Customer: Negative Comment
○ “WARNING!!!! Sirius business practices border on criminal conduct. They will do anything
to avoid cancellations and refunds. Phone times have gone from a minimum to 1.5 hours
with little or no satisfaction. Love Howard Stern, get out before this company really goes
belly-up. Will never recommend or use service again.”
Customer: Positive Comment
○ “I am so happy I finally got to speak to someone who can speak English. I tried 2 times to
speak to someone to get my service connected on both times I got the run around. I
finally spoke with Andrea and she help me out very well and I got the service that I
wanted. I am happy”
Employee Comment:
○ “I am an employee with Sirius XM, I work in the cancellations department. So I usually
get the very unhappy customers. (...) You get much farther and more accomplished when
you speak to your rep with respect and courtesy. For one you do not know what they
have the ability and authority to do for. And me myself if i speak to someone who does
have real issue with their account who is respectful I am more than willing to go out of my
way and get everything resolved for them. But when those customers call in and are
screaming cursing ranting and raving at me. I'm less likely to reach out of my box and
take an extra step for you. We are a huge corporate company that has terms and
conditions just like any other service that's out there. (...)”
XM Radio - Customer Service Ratings
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XM Radio is ranked #266 out of the 406 companies that have a CustomerServiceScoreboard.com rating
with an overall score of 32.04 out of a possible 200. This score rates XM Radio customer service and
customer support as Disappointing.
The following statements are excerpts from Sirius Radio customer comments or employee comments:
XM Radio:
●
●
●
Customer: Negative Comment
○ “They are very difficult to deal with. Hard to understand, do not resolve the problem. They
have the worst customer service of any company I have ever had to deal with. You need
to call multiple times just to get something resolved.”
Customer: Positive Comment
○ “I called today to cancel my service that was about to auto-renew at a ridiculous rate. I
did have to wait about 15 minutes on hold. I finally got to a customer service rep who
offered me a year at 'half off' which I accepted. I have verified on the web site that the
transaction was completed. She was a bit difficult to understand, but we got through OK.
Obviously other people have had much worse experiences than I so I guess I was very
lucky.”
Employee Comment:
○ “I Work at an XM call center for billing. And yes we do have to transfer you to another
department if you are canceling, and it's their job to try and keep you as a customer. The
only reason hold times are so long is because we have MILLIONS of ppl (sic) calling all
the time and it's not like we can sit there and get to every person right when they call in.
We don't have that much man power. My call center is supposed to have 255 ppl (sic) in
it. We probably don't have 100. You can't yell, cuss, or get fustrated (sic) with us when
we say we can't do something. If we aren't allowed, we aren't going to. Because we are
graded on calls and we will get in trouble for doing things. So you need to think about
how hard we have it as a rep versus what you think. You need to see what its like before
you go around saying things like that. And yes there are alot (sic) of us who don't do our
job, but it's because of the customers.”
Competitive Analysis
Since the merger of Sirius and XM in 2008, Sirius XM is the sole provider of satellite radio in the United
States and Canada (“Satellite radio”). Significant competition for both listeners and advertisers can be
found in providers of pre-recorded entertainment played in cars, homes, and using portable players
(FORM 10-K (Annual Report)). Sirius XM competes with the following providers of radio or other audio
services:
Traditional AM/FM Radio
“Many traditional radio companies are substantial entities owning a large number of radio stations or other
media properties” (FORM 10-K (Annual Report)). AM/FM radios are “a standard feature in every vehicle
manufactured without an additional cost to the consumer (“wikiinvest”). Traditional AM/FM radio “offers
free broadcasts paid for by commercial advertising, rather than by a subscription fee like satellite radio”
(FORM 10-K (Annual Report)). This free service “reduces the likelihood that customers would be willing to
pay for [Sirius XM] services (FORM 10-K (Annual Report)).
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Some stations have “reduced the number of commercials per hour, expanded the range of music played
on the air and experimented with new formats in order to lure customers away from satellite radio” (FORM
10-K (Annual Report)). Traditional AM/FM radio also offers “local programming, such as local news and
sports,” while Sirius XM offers news and sports on more of a national level (“wikiinvest”). Traditional radio
also only plays edited content, where satellite radio can play content in its original, unedited, or explicit
form.
HD Radio
“Many radio stations now broadcast digital signals, which have clarity similar to [Sirius XM] signals.”
(FORM 10-K (Annual Report)). This would lessen any competitive advantage Sirius XM holds over
traditional radio due to a clearer digital signal. (FORM 10-K (Annual Report)). These stations do not
charge a subscription fee, but generally contain advertising (FORM 10-K (Annual Report)). The only cost
is the purchase of the HD Radio receiver, ranging from approximately $30-$150 (“HD
Radio”)(“Amazon.com”).
At the end of 2010, over 2,000 radio stations currently broadcasted “primary signals with HD Radio
technology” (FORM 10-K (Annual Report)). “Several automakers install HD Radio equipment as factory
standard equipment in select models, including Ford, Volkswagon, BMW, Mercedes-Benz, Kia, and
Hyundai (FORM 10-K (Annual Report)).
Compact Discs
As one 2010 article stated “the music business was worth half of what it was ten years ago and the
decline doesn't look like it will be slowing anytime soon” (Goldman). The struggling industry is leading to
the decline of CD sales as digital sales have risen (Johnston). The purchase of CD’s is “becoming less of
a mass-market item and kind of a niche product that caters to a small but loyal following (France).
Consumers can also purchase blank CD’s and “burn” custom CD’s themselves from their computer.
Burning an audio CD can limit the volume of music to approximately 18 songs, but there is another
alternative (Matthews). MP3 CD’s contain digital audio files in the MP3 format (Matthews).
Many modern CD players that are standard in vehicles support the MP3 file format. MP3 CD’s can hold a
large number of songs, somewhere upwards of 120-130 (Matthews). One disadvantage MP3 CD’s
possess is that the sound quality is “inferior to that of an audio CD” (Matthews). CD’s, whether audio or
MP3, can be used to play a custom list of songs, but the order is permanent. Users can choose between
fewer songs with a higher quality sound (audio CD), or many songs with a lower quality sound (MP3 CD).
CD’s also cannot be updated, and users must replace each CD as new music is released. This lack of
efficiency is leading to the death of the CD, a similar fate that both cassette tapes and vinyl records
previously experienced.
Internet Radio and Internet-Enabled Smartphones
Internet radio broadcasts “have no geographic limitations and can provide listeners with radio
programming from around the country and around the world” (FORM 10-K (Annual Report). “Major media
companies and online-only providers, including Clear Channel, CBS and Pandora, make high fidelity
digital streams available through the Internet for free or, in some cases, for a fraction of the cost of a
satellite radio subscription” (FORM 10-K (Annual Report). “These services compete directly with [Sirius
XM], at home, in the automobile, and wherever audio entertainment is consumed“(FORM 10-K (Annual
Report).
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Pandora, an Internet radio service, is considered the leading Internet music provider with over 80 million
users (Riis)(Rayl). “The service has two subscription plans: a free subscription supported by
advertisements, and a fee-based subscription without ads. A free account user may reach the streaming
limit of 40 hours per month, and continue unlimited streaming by paying $0.99” (Calladine). “Pandora
Radio founder Tim Westergren stated that most users choose the free subscription” (Calladine).
Pandora’s 2009 annual report stated that “total revenue in 2009 was DKK 3.5 billion (approximately $671
million U.S.) against DKK 1.9 billion (approximately $364 million U.S.) in 2008 - an increase of 82%”
(Osborne). Pandora also experienced great raises in net profit and number of employees, showing that it
is in face a fast growing company (Osborne).
During the summer of 2011, Pandora plans to file for IPO, “outlining their intentions to go public” (Rayl).
“What many who follow Sirius XM fail to realize is that Pandora and other Internet radio services are
shifting to a subscription model more now than ever before” (Rayl).
Wireless phones have become more advanced and are capable of many other features than just making
phone calls and texting. Technology analyst Nick Jones states that “by the year 2014 the mobile
environment will be dominated by smartphones” (Daniel). Smartphones “typically play recorded or cached
content and access live radio via dedicated applications or browsers, and even have the capability of
“interfacing with vehicles” (FORM 10-K (Annual Report)). Applications for smartphones are often free to
users who are subscribed to a large data plan (FORM 10-K (Annual Report)). “Leading audio smartphone
applications include Pandora, last.FM, Slacker, iheartradio, and Stitcher (FORM 10-K (Annual Report)).
“Certain of these applications also include advanced functionality, such as personalization and song
skipping, and allow the user to access large libraries of content and podcasts on demand. Third
generation mobile networks have enabled a steady increase in the audio quality and reliability of mobile
Internet radio streaming, and this is expected to further increase as fourth generation networks become
the standard. We expect that improvements from higher bandwidths, wider programming selection, and
advancements in functionality are likely to continue making Internet radio and smartphone applications an
increasingly significant competitor, particularly in vehicles (FORM 10-K (Annual Report)).”
Pandora offers a free downloadable smartphone application that is powered by Internet radio (Lally). This
application allows you to create your own stations, rate songs, and bookmark favorite artists and songs
(Lally).
Sirius XM has also has a smartphone application (“Sirius XM RADIO INC.”). The monthly subscritpion
(sic) fee for the application is an additional $2.99/month to the base Internet service of $12.99/month.
This presents an issue to those who enjoy their music free (“Sirius XM RADIO INC.”). The upcoming
release of Satellite Radio 2.0 plans to take advantage of the smartphone market, and could be a step in
the right direction for the company (“Pandora Mobile”). This new application is “expected to offer
significantly more choices for the consumer and contain functionality that does not exist today in our
radios” (“Pandora Mobile”). This application will allow users to customize their very own personal radio
stations, while providing music discovery advantages at the same time (“Pandora Mobile”).
Portable Audio Devices
Digital music devices or MP3 players, such as the Apple iPod ®, allow users to upload music files and
videos to be accessed portably (“wikiinvest”). iPod ® users can purchase and download music through
Apple’s iTunes ® Music Store (FORM 10-K (Annual Report)). “iPods ® are compatible with certain car
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stereos and various home speaker systems, and certain automakers have entered into arrangements
with manufacturers of portable media players” to enhance this compatibility (FORM 10-K (Annual
Report)).
Digital music MP3’s are available for free or for purchase on websites of “online music retailers, artists,
and record labels” as well as through file sharing software programs (FORM 10-K (Annual Report)).
Emerging artists are beginning to give away their music for free in order to increase live ticket sales,
“which are often more profitable to emerging artists than music sales” (FORM 10-K (Annual Report)).
“MP3 files can be played instantly, burned to a compact disc or stored in various portable players
available to consumers. Internet-based audio formats are becoming increasingly competitive as quality
improves and costs are reduced. In addition, many current generation portable audio devices, such as the
iPod touch, also contain WiFi connections enabling direct Internet connections for purchasing additional
music or streaming music that is not stored on the local device” (FORM 10-K (Annual Report)).
One of the dangers of the use of MP3 players in vehicle is that they can be a serious driving distraction
(France). “Using your hands to change the song of start a playlist while driving can be dangerous and
lead to traffic accidents” (France).
Consumer Analysis
Although Sirius XM is versatile enough to appease any consumer, both primary and secondary research
revealed that Sirius XM may not be reaching its full potential in the market.
Primary Research (refer to Appendix B for Simmons data)
Beginning with Sirius XM’s current position, “Consumer Graph 1: Age” below displays a bar graph
comparison of current subscribers by age groups. Data shown in the graph was also collected from
sirius.com and xmradio.com, which both link to the current Sirius XM website, so the averages of the
three ratings were calculated. The graph begins with men and women ages 18-24 and increases in
increments of ten. The graph reveals that Sirius XM is lacking loyalty from younger generations, men and
women ages18-44.The graph also shows that Sirius XM’s current target market is men and women above
the age of 44.
Consumer Graph 1: Age
Data source: http://www.alexa.com/siteinfo/siriusxm.com#
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After finding that Sirius XM has consumer loyalty with men and women above the age of 44, a survey was
conducted to see how younger consumers view the company and available services. The survey
emphasizes men and women ages 18-25 and can be referred to in Appendix B. To further understand the
reasons behind Sirius XM’s lack of younger subscribers, data was collected and analyzed, highlighting
the market opportunity. Even though Sirius XM offers a variety of subscription packages, Sirius A La
Carte, XM Mostly Music and XM News Sports and Talk, there is a general lack of awareness. According
to the survey, 83.1% of people have never heard of A La Carte, 78.9% have never heard of XM Mostly
Music, and 80.3% of those surveyed have never heard of XM News Talk and Sports (Survey).
The survey results also show that the younger age group, men and women ages 18-25, actively seek
ways to improve their entertainment experience by utilizing other personal music devices. From the
survey data we found that 43.2% of individuals use a smartphone for music frequently or very frequently.
Also, 70.4% of people prefer to use an MP3 player (frequently and very frequently) while in the car. In
contrast, 56.3% of people use traditional AM/FM radio occasionally or less (Survey).
“This segment is important because consumers build an affinity for brands that thye (sic) use when they
are young and impressionable. This means that services like Pandora, Slacker, Last FM, and Jelli are
building brand strength in users that satellite radio will be seeking to garner as subscribers in 3 to 10
years” (Osborne).
From primary research, we can conclude that although Sirius XM offers variety and personalization, there
is a lack in subscribers under the age of 44 (See Consumer Graph 1: Age). From the survey we see that
these younger non-subscribers are pursuing other ways to get the music personalization they desire
through other MP3 devices (43.2% using a smartphone for music). The primary research also shows a
marketing opportunity with expanding the current consumer to everyone above the age of 18. Sirius XM
combines the benefits from other personal music options and offers the consumer up to date news, sports
and music while allowing them to personalize through packages or services such as XM Mostly Music
and Ala Carte.
Secondary Research (refer to Appendix B for Simmons data)
To further understand the purchasing habits of the target market we conducted secondary research to
see what factors differentiate the age groups. Certain factors such as education level, employment status
and annual income collectively effect consumer-purchasing decisions.
As for men and women above the age of 44, there are many factors contributing to them being the
current target audience for Sirius XM. Through Simmons Choices 3 we found that 65% of men and
women above the age of 50, 38.7% are employed full time, while of those employed full time, 34.8% are
above 50 years of age. Through Simmons we also found that of men and women ages 45-54, 31.6%
have personal income of $50,000 or more and of those people earning that income, 30.9% are men and
women between 45 and 54 (Simmons). Being employed gives the consumer a higher, steadier income
than those who may have less permanent employment. Chart #2, below, shows income levels compared
to current subscribers of Sirius, XM, and other competitors. From the graph we can see that it is more
likely for someone to be a subscriber to Sirius XM if they have an income level above $60,000 a year
(Osborne).
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Consumer Graph 2: Income
Data source: http://www.alexa.com/siteinfo/siriusxm.com#
The younger ends of the consumer market are men and women ages 18-25. In contrast with the older
generations of men and women above the age of 44, this target market generally has less income.
*According to Simmons Choices 3 showed that 40.3% of men and women ages 18-24 have an income of
less than $25,000 a year. Of those people earning under $25,000 a year, 22.4% are men and women 1824. 64.2% of full time college students are men and women ages 18-24, also, 44.6% of men and women
18-24 are not employed. (Simmons). The contrasts between the youngest and oldest segments of the
consumer market are clear; to bridge the gap we evaluate the demographics of the middle age range,
men and women ages 26-44.
Men and women ages 26-44 are transitioning from young to mature adults. This means there is a mix of
those who are still pursuing their educations while some have already fallen into full time careers or even
having families. Through data gathered from Simmons Choices 3, we discovered that within the age
range of 25-49, 77.2% are employed at least part time. Of those who are employed at least part time,
54.7% are men and women ages 25-49. Simmons also shows that 61.5% are currently married, and
those currently married, 47.6% are men and women 25-49. Only 3.22% of this age group are at least part
time college students, while of everyone that is at least a part time student, 51.6% are men and women
25-49. This age range has a lot of variability with people being students, spouses and employees.
Through secondary research we also discovered that the overall target market are users of social media,
Facebook and Twitter specifically. From the pie chart below it is easy to see that of the people using
Facebook, 57% fall within the target audience age range of men and women 18-44. Also, of those using
twitter, 68% are part of the target audience (Baird).
14
Division of U.S. Social Network Users by Age; Facebook and Twitter (Baird).
Conclusion
Secondary research suggests that as income increases so does the likelihood of subscription to Sirius
XM. When also considering the primary research survey data, it is clear that younger generations are
largely unaware of what Sirius XM has to offer. This could be a large reason for the contrast in
subscriptions within target market age ranges. Through the campaign it is important to highlight the
variety and personalization Sirius XM offers that makes it appealing to the consumer market as a whole.
With options such as subscription packages and smartphone applications Sirius XM caters to the needs
of men and women throughout the target audience. Seeking cognitive and affective changes with the
campaign will help consumers understand what Sirius XM is and how it can increase their personal
entertainment experience. If consumers, especially the sample age from the survey of men and women
ages 18-25, actually understand the benefits of Sirius XM, there is more potential for a change in
behavior. With all of the free and alternative entertainment options available, it is imperative for
consumers to see how Sirius XM combines the convenience, personalization and up to date information.
This combination benefits can motivate the consumers to change their opinion and behavior toward Sirius
XM.
From the iPod phenomenon, to television in 3D, electronics are continually evolving and competing to
satisfy the wants and desires of consumers. Music, sports and news lovers a like have been
compensating and finding ways to personalize their individual choice of entertainment device. With
subscription packages and personalization options Sirius XM is adaptable enough to satisfy the entire
consumer market of men and women ages 18 and above. We recommend expanding current subscribers
from men and women above 44 to include all men and women ages 18-44. There is a marketing
opportunity with personalized media and Sirius XM has the most to offer consumers, combining the
benefits of other devices such as iPods, Internet streaming, and CD’s. A campaign highlighting the
benefits such as up to date information, personalization and convenience, as well as to simply inform
younger consumers about Sirius XM will help to expand the current subscribers.
15
VI. SWOT Analysis
Strengths
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Most up to date news, sports and music.
○ Sirius XM is consistently updated, giving listeners the most current music, sports, talk and
news.
Most options of ways to conveniently listen.
○ Sirius XM consumers have the ability to listen to music, sports, news or talk in any way
convenient to them. Sirius XM is available through the Internet, smartphones and in-car
systems.
Variety of audio entertainment.
○ Live events, sports, news, talk, music, artist/celebrity interviews etc. within one service
○ Personalized stations for some celebrities. For example, breaking news about Charlie
Sheen was available on Tiger Blood Radio.
Safe & Legal
○ Sirius XM offers a way for consumers to legally get their choices of music, news, sports
and talk with a monthly subscription.
○ Using other audio devices in-vehicle, such as MP3 players, can be a serious driving
distraction (France).
Sirius XM reports 1.1 million net subscriber additions over the past year and closed out 2010 with
over 20 million (“Sirius XM RADIO INC.”).
Sirius XM technology continues to expand from fixed and portable receivers, to more modern
technology such as smartphone applications (“Sirius XM RADIO INC.”).
Commercial free music and limited commercial interruption on News, Talk, and Sports (“Sirius
XM RADIO INC.”).
High barriers to entry and little or no competition within the satellite radio industry
Weaknesses
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Free and lower cost alternatives reduce the likelihood that customers would be willing to pay for
Sirius XM services (FORM 10-K (Annual Report))
Radio stations broadcasting digital signals lessen any competitive advantage Sirius XM holds
over traditional radio due to a clearer digital signal. (FORM 10-K (Annual Report)).
Several automakers install HD Radio equipment as factory standard equipment (FORM 10-K
(Annual Report)).
“Major media companies and online-only providers, including Clear Channel, CBS and Pandora,
compete directly with Sirius XM, at home, in the automobile, and wherever audio entertainment is
consumed“ (FORM 10-K (Annual Report).
Pandora, an Internet radio service, is considered the leading Internet music provider with over 80
million users (Riis)(Rayl). Pandora also experienced great raises in net profit and number of
employees, showing that it is in face a fast growing company (Osborne).
Reluctance in establishing innovative content to compete within the industry
Customer service data, including the Customer Service Scoreboard rating and comments,
includes negative comments that are crucial in developing a positive brand image. (Customer
Service Rankings for Top Companies Based upon User Complaints, Ratings and Comments. 27
Mar.)
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Primary research indicates that our recommended target audience is unaware of many of Sirius
XM’s customized packages (Appendix A).
Lack of integration between both companies on a consumer level (Osborne)
Budget deficits within the marketing and advertising department (Knowledge@Wharton. 03 Sept.
2008)
Opportunities
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Pandora plans to go public, which may result in a shift to a subscription model (Rayl).
Smartphones are believed to dominate the mobile environment by the year 2014 (Daniel).
The upcoming release of Satellite Radio 2.0 plans to take advantage of the smartphone market
and help to compete with innovative industry standards.
Expand partnerships with auto dealers to include Sirius XM in new vehicles.
Threats
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Pandora offers a free downloadable smartphone application that is powered by Internet radio
(Lally).
Internet-based audio formats are becoming increasingly competitive as quality improves and
costs are reduced (FORM 10-K (Annual Report)).
Artists are beginning to give away their music for free (FORM 10-K (Annual Report)).
Internet radio competitors, such as Pandora and Slacker, provide a cost-free portable alternative.
Piracy and illegal downloading continue to threaten the entire audio entertainment industry
(McGuire).
Advancements in technology by competitors could leave satellite radio obsolete if market
demands are not met (Lieberman).
Significant customization of personal audio devices such as mp3 players and smartphones, have
potential to set new standards within the audio entertainment industry.
SWOT Summary:
The SWOT analysis highlights Sirius XM’s major opportunities and strengths while considering possible
threats and weaknesses from within the company. The most important information from each section will
help guide the campaign. Sirius XM’s biggest strengths are their up to date programming, variety of
programming, and various ways to listen to the programming. Important weaknesses include their
negative feedback about the service and lack of integration between both companies. Opportunities may
arise in the near future due to a shift to a subscription model among competition. Smartphones are also
expected to rise in popularity, creating an opportunity for the Satellite Radio 2.0 application. The major
threats to Sirius XM are the low cost alternatives of competing services.
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VII. Campaign Recommendations
Marketing Goals
Sirius XM needs to first generate awareness of the brand and its upcoming improvements, while
solidifying a brand image among consumers before attempting to increase subscriptions. This affects the
media plan by shaping the type of messages delivered to consumers in order to achieve the desired
cognitive and emotional changes. Instead of forming a campaign aimed at generating subscribers, a
teaser campaign will generate awareness and inform potential customers about the future of the Sirius
XM brand.
•
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With many teaser campaigns, developing awareness is the highest priority. Although satellite
radio is not a new service, this aims to re-introduce the brand to the public in a new light. The
campaign works on creating the foundation for a rebirth of Sirius XM and the satellite radio
industry.
An increase in sales and subscriptions will be a focus for the post teaser campaign. This
teaser, or hype campaign, should focus on brand awareness, developing the Sirius XM company
and distinguishing the brand as one fully integrated company.
An increase of share of market will also be a goal of the post teaser campaign. The teaser
campaign, although promoting the future potential of Sirius XM, will focus on strengthening the
awareness so future campaigns can take advantage of increasing Sirius XM’s audio
entertainment market share.
In the past, Sirius XM has had a marketing and advertising budget between $200,000 and
$250,000. We are requesting a slight increase for this campaign. Lightly raising the advertising
budget will help this teaser campaign succeed, while leaving funds available for the more in-depth
follow up campaign.
Campaign Timeline - July 2011 - June 2012
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The plan is to “re-release” the brand in the near future with an entire new brand image. It is our
recommendation to prepare for this “re-release” directly following Q2 of 2012, as long as sufficient
improvements are implemented by that time.
The “teaser” advertising campaign will run from July of 2011 through June of 2012. This
campaign will hype the re-release through low cost and free advertising. It will be a key tool in
arousing interest and curiosity for Sirius XM and their upcoming products.
Current Awareness
•
Based on our primary research, a survey of 71 respondents, we have discovered some
interesting information. We asked a question regarding the knowledge of Sirius XM’s special
packages. These packages include the “A La Carte,” “Mostly Music,” and “News, Sports, and
Talk.” Based on our data, 83.1% of the respondents answered they have not heard of “Sirius A
La Carte,” 78.9% had not heard of “Mostly Music,” and 80.3% have not heard of “News, Sports,
and Talk.” When asked how interested they would be in each package, 66.2% answered either
“Somewhat” or “To A Great Extent” for “A La Carte” and 56.3% for “Mostly Music.” Although the
“News, Sports and Talk” did not follow this trend, possibly due to the age range of the surveyed
sample. This data suggests that many potential customers may not be aware of many of the
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aspects of Sirius XM, but once being explained such services, they show a strong interest and
may be inclined to subscribe.
Also in our survey, we asked how much potential customers would be willing to pay for Sirius XM.
Based on our data; the mean amount was $9.35, and 49.29% of respondents fell in the $5-$10
range. This data may suggest that the current fee is slightly higher than what the younger
population is willing to pay. A slight adjustment to the current subscription fee of $12.99/month
could result in many more subscriptions to the service.
Communication Goals
○ We want the target audience to view Sirius XM as working towards a strong brand
image. A customer's experience with the product or service impacts on the way that they
view it. Sirius XM currently does not have a positive brand image; statements that
support this claim include information from the customer service website of “terrible”
ratings and the Sirius Buzz article about how Sirius XM is not fully merged, causing
issues with the service. We can also show the lack of awareness displayed by our survey
results. Sirius XM will need to improve their service first, in multiple facets, in order to
then convey a positive brand image through marketing and advertising.
○ By fully combining Sirius & XM’s services and features, and moving toward a more
customer oriented business approach, Sirius XM can display the image of being:
■ Reputable and Reliable
■ Customer Focused
■ Adaptive and Innovative
■ Convenient
■ Integrated
Another campaigns goal is to have the target audience view Sirius XM as having the
most up to date news, sports and music, as well as multi-faceted, combining the aspects
of Internet, television, smartphone, and personal music devices into one service. The
target audience should believe Sirius XM offers the most options of ways to conveniently
listen, whether that be via smart phone, home/computer, vehicle, or on-the-go.
Convenience will be available no matter where you are, getting the latest news, sports
updates, music, and talk in places where you cannot watch TV, browse the
Internet/smartphone, or risk playing with an mp3 player.
The audience should feel that Sirius XM offers the most variety in audio entertainment,
with live events, sports, news, talk, music, artist/celebrity interviews and more within one
service. This variety of entertainment should be believed to be up to date, current, and
relevant to their everyday lives. These goals can be accomplished when potential
consumers explore the Sirius XM website and other online pages.
Another communication goal is for the target audience to be certain that Sirius XM offers
a service that is safe and legal.
Cognitive Goals:
• Make it About ‘Me’
o The aim is to get into the head of the target audience, who may feel indifferent and
possibly negative about Sirius XM. By knowing the target audience, advertisements can
speak to their concerns, interests and needs rather than about Sirius XM and its’
products ("Royal Mail").
• Keep Them Curious
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Questions make great teasers, and provocative questions work best ("Royal Mail"). Questions
demand answers so start with “Who, Why, What, How, When” and you will be on your way to
writing an effective headline or an enticing teaser ("Royal Mail").
Affective Goals:
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Reliability/Trustworthiness - Goal is to get Sirius XM customers to feel that they have a real
company behind their audio entertainment, one that they can trust and rely on to give them
quality service every time.
Excitement- Goal is to have Sirius XM customers excited to see what new entertainment Sirius
XM has to offer. With the almost endless variety Sirius XM offers and its constant updates,
customers should feel excitement and anticipation of what is to come next. This will be an
important affective goal when it comes to the teaser campaign. Consumers should be excited to
see what Sirius XM is planning with the new “Satellite Radio 2.0.” application.
Pride- Goal is for Sirius XM customers to feel proud that they have Sirius XM satellite radio. This
will tie in strongly with the bumper sticker promotion. The goal is to have the customers be proud
that they have Sirius XM, so proud that they will confidently drive around with the Sirius XM
sound wave logo on their bumpers.
Brand loyalty- All of the above affective goals come down to the main goal of building brand
loyalty. Once Sirius XM is able to show its customers that it can provide wide variety of audio
entertainment, high quality sound, offer personalized package deals, and back everything up with
exceptional customer service that the customers can depend on; it will begin to gain the loyalty of
its customers. We want the customers to feel that Sirius XM will go above and beyond satisfy
their individual needs ensure satisfaction.
Customer Oriented - The target audience should believe that Sirius XM is going to drastically
improve its’ service. Although they may have been let down in the past, this campaign will use
their own testimonials to prove to them that Sirius XM is listening to what they have to say. This
will hopefully lead to them feeling confident that Sirius XM is serious about fixing their problems of
the past.
Budget and Contingency Fund
• Recommended budget: $300,000
o Sales and marketing expenses were $215,454 in 2010, $228,956 in 2009 and $231,397
in 2008 (FORM 10-K (Annual Report)).
o The service has not made significant improvements to warrant a large advertising budget
increase. There is a plan to release new technology, expand the advertising budget,
focus more on customers, and fully merge the Sirius & XM services, but each of these
has not yet been put into full effect.
$144,000 will be allocated to billboard advertisements
$60,000 will be allocated to sales promotions
$120,000 will be allocated to online advertising
o 12% of our budget, or $36,000, will be used as a contingency fund. This fund will be
available if an alternative course of action must be taken, should “unexpected conditions
occur during the life of the campaign” (Parente, 219). Anything from changing economic
conditions, sales results, and competitive activity can lead to the use of a contingency
fund (Parente, 219).
o Specific alternative plans must be formulated for each contingency that may occur
(Parente, 219). The contingency plans will be discussed later.
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VIII. Media Strategy and Tactics
Media Selection
Because this is a teaser campaign and Sirius XM cannot yet advertise better customer service,
fully merging Sirius and XM, more affordable prices, or the releases of new technology. Sirius XM
cannot yet live up to their promises. We feel that Sirius XM has too many issues that must be
corrected first before attempting an extensive campaign.
For this reason, we chose to do a concentrated media mix, focusing mainly on Internet as well as
radio and billboard advertisements. Sales promotions will also be utilized to supplement the
campaign. A concentrated media mix, focusing on online advertisements, will allow Sirius XM to
dominate the Internet medium relative to competition, and cut down on production costs (Parente,
210). Magazine, television, and newspaper advertising can be utilized for the main campaign,
once issues are resolved and new technology is released.
When advertising general propositions to broad-based audiences, the direct, personal approach
works best. The teasers will “demand attention and generate immediate interest” ("Royal Mail").
As in most copywriting, clever wordplay or amusing puns invariably end up obscuring or
weakening the selling message ("Royal Mail").
Online advertising (with a focus on social media)
• A Nielsen study in June of 2010 revealed “Americans spend nearly a quarter of their time online
on social networking sites and blogs” (Nielsen). For this reason, social media will play a major
role in the online portion of our Media Mix. “Social media is a wireless conversation that fosters
communion and sharing between human beings compared with traditional media that delivers
content at the expense of conversation” (Media Flight Plan p. 11).
• This will serve as a great tool to get people talking, sharing, participating, bookmarking, and
networking online about Sirius XM’s service (Media Flight Plan p. 11). It will also help to learn
more about the target audience and “understand what motivates them” (Media Flight Plan p. 11).
Understanding the target audience, “their challenges, filters, objectives, options, and experiences
makes us “mentally one” with whom we hope to connect” (Media Flight Plan p. 11).
• Social market expert, Brian Solis, indicated in a survey that many marketers are planning to
double their budgets in email marketing, SEO (Search Engine Optimization) and social media
compared to their spending in traditional advertising and PR well into the future. (Media Flight
Plan p. 12).
• It is important to remember that Sirius XM will be exposed in a way like no other medium.
“Ethics, or lack thereof, cannot be hidden and are readily apparent in a social media world”
(Media Flight Plan p. 13) “Consumer’s will ‘call out’ both successes and failures, and they
express both with passion” (Media Flight Plan p. 13) “When brands and companies
communicate socially, they must act as members of the community, responding to consumers’
needs in a ‘golden rule’ manner--putting the needs of the consumers first” (Media Flight Plan p.
13).
Strategy: Social media and other online advertisements will be heavily used in this teaser campaign. Not
only will social media effectively reach our target audience, but data suggests that 37% and 28% of
current Facebook and Twitter users, respectively, are part of Sirius XM’s current consumers of anyone
ages 45+ (Baird).
• Social media can serve as a great “two-way conversation” as opposed to a “one-way broadcast”
that comes with traditional media (Media Flight Plan p. 11). Online advertisements will help to
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connect people across geographic boundaries (Media Flight Plan p. 11). This non-traditional
medium will make it easy to share “ideas, photos, videos, likes and dislikes with the world at
large, or an intimate group” (Media Flight Plan p. 11).
By using social media, we can raise awareness of the Sirius XM brand, and the upcoming
improvements. Because social media is a two-way conversation, we can view the reactions of
potential consumers to these proposed changes to the brand, and observe their likes and dislikes
about Sirius XM. These viewpoints will be key in molding the brand in the near future, and a step
in the right direction for a consumer oriented approach.
Advertisements will be used on Sirius XM’s official Facebook, Twitter, and YouTube accounts.
Video advertisements will also be placed on YouTube, playing before official music videos of
many of the popular artists Sirius XM has to offer.
Outdoor (Billboards)
• “The cost of billboard advertising ranges from about $700 to $2,500 a month ("Resources for
Entrepreneurs"). Another source revealed a similar figure, stating; “you can usually find billboard
prices between $1000-$3000 [a month]” ("Billboard-Advertising.com"). With today's computer
technology, billboards are designed on a computer screen, printed to vinyl or poster paper, and
glued to the billboard structure. The result: Higher quality ads in less time for less money
("Resources for Entrepreneurs").
• The largest billboards that are 14 by 48 feet are typically the ones you most often notice along the
freeway. With this sign you get the maximum exposure (“eHow”).
• “It also pays to be aware of the traffic patterns of your target customer base. This will be
invaluable in helping you find the right placement for your business' billboard ads” ("Resources for
Entrepreneurs"). “Keep your ads short and catchy. When it comes to billboards think more
visuals, fewer words” ("Resources for Entrepreneurs"). “Smart business owners view billboard
advertising as one part of a balanced marketing strategy. An integrated marketing strategy
involving print, broadcast media and billboards is key for attracting and retaining new customers”
("Resources for Entrepreneurs").
Strategy:
• Billboards along busy roadways can serve as a great way to reaching the portion of the target
audience that are also drivers. This is especially valuable to Sirius XM if they wish to focus on
their in-vehicle audio entertainment. The message should be short, simple, and to the point,
referring viewers online for “more information” and the opportunity to access online
advertisements.
• Billboards will be used to reveal our message in stages. The theme will remain consistent with
each billboard, but the message will come from different angles. Billboards will be placed within
an eight month time period, broken down into two separate four month periods. The first period
will be September-December, and the second between February-May. Staggering these teasers
too far apart can lead to the audience quickly forgetting them if given the time to do so ("Royal
Mail").
Radio: With a major problem being disgruntled customers, Sirius XM can advertise on their own
channels. This will be an affordable way to reach Sirius XM’s current consumers who may be dissatisfied
with the current service.
Strategy: Advertisements hyping the future of Sirius XM can be placed on the most popular Sirius XM
channels. These ads will be short and to the point, not taking away from the paid content the customer is
22
trying to experience. They will focus on the future improvements to the company; a fully integrated
business structure, a more customer oriented business approach, and the release of new cutting edge
technology. These advertisements will attempt to create a “buzz” among current Sirius XM users about
the much needed improvements, and work to deter disgruntled customers from dropping the service.
Reach and Frequency Goals (using the Random Probability Model)
Reach
• A concentrated media mix results in frequency being more easily attainable than reach (Parente,
211). The campaign will attempt to reach as many prospects as possible, but the current budget
may limit the reach. The campaign will rely highly on using word of mouth, both verbally and
online, to non-directly extend the reach.
• By using the Random Probability Model, we were able to determine a net reach of 99.9% for a
four consecutive month period. Through outdoor advertising, Media Flight Plan calculated the top
five markets to have a reach of 82.6% each month. This reach was then applied to the first four
months of our outdoor campaign strategy to determine a net reach of 99.9%.
Frequency
• “Joseph W. Ostrow created a decision model to help media planners determine the optimal
frequency level through assessing marketing factors, copy factors and media factors” (Ad Media).
The base effective frequency is 3, and frequency adjustments are made based on a series of 20
factors in three categories (Ad Media).
• The fact that this is a teaser campaign, with a limited budget, will influence the choices made
when using the Ostrow Model.
• Here is an example of the Ostrow Model, and the choices that are most fit for Sirus XM are
highlighted and in bold.
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Through the use of the Ostrow Model, the optimal frequency for Sirius XM is 2.3.
This image-based campaign conveys Sirius XM as a new brand, and will be a campaign unlike
any in the past. Sirius XM has both a low market share, in respect to its competition, and low
brand loyalty, based on its poor customer service. These factors all contribute to a higher
frequency.
Bolded market factors within the left column are adjusted to a lower frequency due to the
campaign recommendations and goals.
Through the Random Probability Model, an average frequency of 3.3 was calculated by running
outdoor advertisements in the top five markets.
GRPs
• By multiplying the frequency of 3.3 by the reach of 99.9, the Gross Rating Points for the outdoor
advertising campaign total 330.4. Gross Rating Points are a way to measure the total of all Rating
Points during an advertising campaign. A Rating Point is one percent of the potential audience.
The figures for reach, frequency, and GRP’s are all relatively high, which corresponds well with
the main focus on raising awareness.
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Scheduling pattern:
Campaign Timing:
• With a budget of $300,000 it would not be practical to use continuous scheduling, which requires
the same amount of money spent in each period of the campaign (Parente, 214). The heavy
implementation of Internet advertising, much of which is free of cost, will allow the campaign to
use pulse scheduling for the entire 2012 year. Advertising will vary from period to period, but
there will be at least some advertising media scheduled in each period (Parente, 214).
• Seasonality, purchase-repurchase cycle, and competitions advertising patterns will become
important factors during the follow up campaign.
Spot Markets
• Online and radio advertisements will target the national market, while billboard advertisements,
as well as promotions, will target spot markets. These spot markets will be chosen in areas that
have high online and social networking activity. The advertisements and promotions in these
areas will conclude by attempting to get potential customers online to learn “more information”
about what Sirius XM has to offer.
• Based on the table below, on the top US States on Facebook, and from data collected about the
top US States on Twitter, the most users of both social networking sites are located the following
states: California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Michigan, Georgia,
Washington, Massachusetts, and North Carolina (Burbary)(Stirtz). With the majority of
advertising recommended to be placed online, these states, and their corresponding major cities,
will be prime locations for spot market targeting.
(Burbary)
•
According to Media Flight Plan, the top 5 markets within these selected states include New York,
NY, Los Angeles, CA, Chigaco, IL, Philadelphia, PA and Dallas-Ft.Worth, TX. In addition, these
cities, according to the 2009 INRIX National Traffic Scoreboard, are within the top ten US Cities
for traffic congestion (Zurschmeide).
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•
In addition to those five markets, we also plan on spot market advertisements in the city of
Detroit, MI. Detroit is considered the Motor City, and Chrysler has been running their recent
campaign featuring hip-hop artist Eminem. Eminem is the best-selling artist of the 2000’s, and
has his own channel, Shade45, on Sirius XM (Montgomery).
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IX. Creative Strategy
● Strategic focal point: The focal point of this campaign will be to raise awareness of the upcoming
changes to the Sirius XM brand, and address the lack of integration, innovation, and poor
customer service. When dealing with customer service, ads will implement the creative strategy
of being “honest to a fault” (Parente, 180). The target audience should not just view these as
regular advertisements, they will realize that Sirius XM is paying attention to their views and is
improving the company based on them.
● Positioning statement: This campaign will position Sirius XM as taking a consumer oriented
approach. It will emphasize that Sirius XM will be a leader in audio entertainment, and will
accomplish this through innovation of their product, fully integrating the service, and making the
customers their number one priority.
● Big unifying idea: The big unifying idea for this campaign will be the new Sirius XM dog, and the
Satellite Radio 2.0 application. The release of this app corresponds with the conclusion of the
planned improvements to Sirius XM.
● Link between the creative strategy and the broader communication goals
○ The billboard and radio advertisements of the teaser campaign will serve to boost
awareness, while detailed information about the changes will be available online ("Royal
Mail").
○ All advertisements will be consumer focused. Many users are unhappy with the Sirius
XM service, and advertisements will address these individual issues, while promising
extensive improvements.
The design of each element of the campaign will be consistent so the recipient
recognizes that the pieces are linked. We plan to use identical colors, layout, typography
and language ("Royal Mail").
●
Creative concepts (Parente):
○ Online - Online advertisements cover the entire target audience. Facebook and Twitter
updates will give extensive information about the upcoming changes to Sirius XM. Ads
will give potential customers an overview of the innovations and improvements that will
revamp the entire Sirius XM brand. YouTube video advertisements will also be placed on
the official Sirius XM account. Banner ads will also be used, being placed on different
popular websites covering news, sports, and music.
○ Billboard - Billboard advertisements will target both current users and potential future
users. These ads will be subliminal in nature, but clearly communicate the Sirius XM
brand. Billboards will hint at Satellite Radio 2.0, and that major renovations are being
made within the company. The ads will leave viewers speculating to the meaning of the
advertisement, and attract them online to find out more.
○ Radio - Radio advertisements on Sirius XM will target current users. The ads will
address customer complaints about the lack of integration and poor customer service.
These radio spots will be brief, 15 to 30 seconds in length, allowing users to get back to
their audio entertainment. The message within the ads will base statements off of
testimonials from actual Sirius XM users, who have posted negative comments about the
company. The ads will end by addressing these problems, guaranteeing that Sirius XM
appreciates their loyalty, and that changes are going to be made.
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Creatives:
Online: YouTube commercial:
Background: A commercial taking place on 8 Mile in Detroit city opening with a Chevrolet sedan
driving down the street. Camera begins by panning past the 8 Mile street sign going over toward
the vehicle.
Visual: The camera begins facing the car zoomed in to display the front
of the vehicle as well as the driver and the passenger. The driver is the
Sirius XM dog icon wearing sunglasses. The dog is driving and flipping
through Sirius XM’s exclusive channels. As the songs switch, the artist of
that song pops up in the passenger seat. Each song is only played for a
few seconds, enough for consumers to identify the artist with Sirius XM.
It changes through four popular songs; Akon “Angel,” Pink “Raise Your
Glass,” Kesha “Blow” and finally choosing Eminem’s “Without Me.”
Audio: Beginning with “Angel,” each of the songs listed above are played
for two seconds in that order. When Eminem’s song “Without Me” comes
on the background beats are played and continued throughout the
commercial.
Visual: Camera remains facing the car, showing the driver and
passenger. The Sirius XM dog and Eminem are both wearing
sunglasses and bobbing their heads along to the music, looking straight
ahead.
Audio: In the background the Eminem song “Without Me” is playing, Only
the instrumental of the song is playing, no lyrics.
Visual: The car pulls up to a traffic light, Eminem looks over to the Sirius
XM dog and the dog looks back.
Audio: Eminem states “Yo dawg, this is a pretty sick station”
Visual: The dog lifts up his glasses, showing the Sirius XM soundwave
symbols in his eyes, the dog then lifts his paw and gives Eminem a fist
bump.
Visual: The camera goes from the front of the car, zooms out and shows
the scene from the side or profile view. The light turns green and the
Chevrolet pulls off speeding down the street. Then the screen goes to
black
Audio: The background instrumental of Eminem’s “Without Me” is still
playing, it leads into the lyrics of “Guess who’s back, back again....” The
song continues into a blank screen.
Visual: The screen has gone black and the line “The Unveiling of
Innovation” comes up on the screen with the (((2.0))) symbol underneath
it.
Audio: The Eminem song continues.
28
Online Banner Ad:
This is an example of one of the online banner ads we will use in the campaign. This particular ad is a
leaderboard, which is 728x90 pixels in dimension. It will be animated, attempted to catch the attention of
viewers. This particular ad will focus on the integration of the two companies, as part of the improvements
coming when the Satellite Radio 2.0 application is released.
● The ad will begin blank, with the Sirius XM blue colored background.. The Sirius XM dog will
enter from the right, wearing sunglasses, and begin walking across the screen. Once arriving at
the middle of the screen, the dog will stop, and look towards the viewer as if noticing them for the
first time. He will lower his shades, exposing the sound waves he has for eyes. After tossing the
shades aside, the Sirius XM dog will go back to the right, and begin to pull on a chain. Attached to
the chain will be a steel plaque that reads “2.0” with the sound waves around it. Text will then
appear that reads “We’ve been one company, now it’s time to function like one.” That text will
fade out and new text reading “Sirius XM: Satellite Radio 2.0,” will appear. The slogan, “The
Unveiling of Innovation” will also be displayed below. The Sirius XM dog will pull this plaque into
the middle and sit down next to it and bark.
●
Other banner ads will focus on the other issues of Sirius XM.
○ A second ad of the same type will be used to focus on customer service. It will begin with
negative Sirius XM user comments fading in at random locations on the banner,
increasing in size before they disappear. These comments will cover the lack of
integration, innovation, and poor customer service. After these comments pass by, the
Sirius XM dog will appear, along with text that reads “We are listening” “Satellite Radio
2.0... The Unveiling of Innovation”
29
Billboard:
This billboard is highly subliminal, only hinting at the Sirius XM brand. Although similar to the online
creative, this billboard focuses on raising awareness of innovation. The Sirius dog makes his return, now
with the XM sound waves as eyes, forming the Sirius XM dog, which indicates the full integration of the
two companies. There are two Sirius XM dogs, pulling a curtain, trying to reveal what is behind it. The 2.0
with Sirius XM sound waves is clearly seen behind the curtain. This subliminally hints at Satellite Radio
2.0. The headline “The Unveiling of Innovation” is seen at the top right. This simple message conveys to
viewers that Sirius XM is planning to unveil something, and that it will be innovative. The purpose of this
billboard is to have consumers want to find out more about what the upcoming changes to Sirius XM may
be. This billboard will be effective in raising awareness of the brand, and the Satellite Radio 2.0
application.
30
Radio:
Sirius XM Satellite Radio
“Teaser” Campaign
:30 sec Produced Spot
“Customer Focused”
Copywriters: Subliminal Inc.
May 2, 2011
PRODUCTION NOTES: THREE VOICES. Man #1 (ANNOUNCER) IS THE VOICE OF SIRIUS XM, AND
HAS A STRONG, MASCULINE, SLOW-SPEAKING VOICE. HIS TONE EXPRESSES GUILT AND
CONERN INITIALLY, BUT PROMISE AND CONFIDENCE AS THE AD CONCLUDES. Woman #1 AND
Man #2 ARE DISGRUNTLED SIRIUS XM CUSTOMERS, ANGRY AND FRUSTRATED WITH SIRIUS
XM. THEY ARE SPEAKING QUICKLY AND FRANTICALLY. THE BACKGROUND MUSIC WILL BE
PLAYED QUIETLY, STARTING OUT AS SLOW AND GLOOMY. THE MUSIC ENDS FAST PACED AND
UPBEAT.
SFX (:01)
BELL RINGS
ANNOUNCER (:08)
This is an official Sirius XM special announcement!
Attention all Sirius XM users. We are listening!
Woman #1 (:01)
I have Sirius.
Man #2 (:01)
I have XM.
Woman #1 (:02)
Wait, aren’t they one company now?
Man #2 (:03)
Everything’s separate, I’d like to call and find out.
Woman #1 (:02)
And be on hold for hours?!
Man #2 (:02)
Do they even care about their customers?
Woman (:02)
And are they even trying to improve?
Man #2 & Woman #1 (:01)
FRUSTRATED GRUNT
ANNOUCER (:05)
Satellite Radio 2.0… Designed for you. Designed BY YOU. The
Unveiling of Innovation.
31
X. Promotional Strategies (w rationales and cost estimates)
●
Bumper Sticker Promotion
This promotion will target almost every type of consumer. It will feature a simple, clear bumper
sticker displaying the blue sound waves that come from the Sirius XM logo, but without the “Sirius
XM” text between them. We recommend dedicating $60,000 of the $300,000 budget toward this
promotion. With this allowance, we suggest purchasing bumper stickers and distributing them to
consumers throughout the spot markets via direct marketing. Bumper stickers will also be
promoted through an online advertisement stating, “Click Here to Receive Your Free Sirius XM
Bumper Sticker.” This advertisement will be placed on various high traffic websites to increase
the probability of getting the bumper stickers into the hands of Sirius XM customers.
Rationale: This promotion is designed to provide current users with an outlet to display their
support for Sirius XM satellite radio. When individuals see the sound waves without Sirius XM, it
will appear unusual, sparking curiosity. This will also raise awareness and promote the brand.
XI. Campaign Benchmarking:
● Benchmarking will take place halfway through the campaign at the start of January. With the main
goal of raising awareness and enticing discussions about the brand, the benchmarking method
will measure site traffic, or the number of visitors and the number of pages they visit. The
benchmarking method will also work on tracking blog posts made by consumers about Sirius XM.
Ways of measuring this traffic are through activity on the Sirius XM Facebook, Twitter, and
YouTube pages. Using the hash-tag (ex. #SiriusXM) on Twitter is an easy way to track when
users’ tweets include the words SiriusXM. The Sirius XM Facebook and YouTube pages have
sections available to users to make comments, expressing their opinions freely. With social media
being a strong focus of the campaign, it will also serve as a great way to benchmark the success
of the marketing goals.
● This teaser campaign is relatively low risk, due to a tight budget, but if awareness goals are not
met when the campaign benchmarking occurs, remaining funds can be used to reinforce online
advertising and sales promotions. Advertisements can be purchased for popular music, sports,
and news sites, while promotions can be employed in various cities to help interact with the
public.
XII. The Next Campaign
● After awareness is generated about the upcoming improvements to the service, Sirius XM must
deliver on those claims. The next campaign, directly following the teaser campaign, should
highlight the then already employed changes. If Sirius XM backs up what they promised, an
extensive advertising campaign should be able to raise subscriptions and market share relative to
the competition.
● Sirius XM must be fully integrated, including both in name and in service. No aspect of the
company should have the words ‘Sirius’ or ‘XM’ by themselves. The variety of subscription plans
should follow this model as well. “Sirius A La Carte” and “XM Mostly Music,” for example, should
drop the ‘Sirius’ and ‘XM’ names and be referred to simply as “A La Carte” and “Mostly Music.”
Customers should never feel that Sirius XM, although one company, control separate parts of the
service.
● Customer service should be transformed from a weakness to a strength. With a customer service
reputation already suffering, the company must do everything in their power to make interactions
with the customers quick and painless. This rebirth of a brand needs to have the customers as
32
●
●
●
their number one focus in all aspects of the business, and giving back to the customers can be
the first step.
Although there is a free trial available through Sirius XM, it is currently only limited to online
subscribers. To further sell the product, it will be beneficial to expand the trial period to include the
variety of subscription plans. Once the free trial is available through all new subscriptions, we
recommend that the trial period should be extended from one week to three months. Our survey
revealed that 67.6% of respondents felt that “Cost Free” was either “Important” or “Very
Important” when considering audio entertainment. One study suggested that habit forming takes
between 18-265 days (Daniel). Based on this information, the one week trial for the current Sirius
XM application should be expanded in order to allow users to have the opportunity to get
accustomed to the service. We recommend that Sirius XM employ the three month free trial
coinciding with the release of the Satellite Radio 2.0 application. Upon expiration of the extended
free trial, the user will have had an extensive amount of time to use the new and improved
service. This strategy’s intention is to maximize the probability that trial users purchase a
subscription to the Sirius XM service. A lower monthly subscription fee will also help this goal
succeed if competitors are still offering their services for little to no cost.
Innovation will be another priority for the next campaign and into the future. Many competitors
currently have customizable alternatives that let the user be more in control. If Sirius XM wants to
succeed, they must stay up to date on all technology, making it easier for customers to interact
with their products and services.
Customer Service Site:
○ In the future it would be beneficial for Sirius XM to begin an organized costumer service
blogging website. The site will be formatted to keep two-way communication thriving
between Sirius XM and its consumers. This will allow subscribers to post problems,
complaints, questions and recommendations to Sirius XM while allowing fast-paced
feedback from customer service representatives. This will assist in making consumers
feel more comfortable with Sirius XM’s services and the brand in general.
33
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38
XIV. Appendix A (primary data and SPSS output)
Questionnaire
The following questions (1-3) regard the use of a personal vehicle:
1. Approximately how many hours per week do you spend in a personal vehicle (to the nearest hour)?
____ hours
2. Of that time spent in a personal vehicle, are you mostly…
a. A passenger
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
b. A driver
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
3. How frequently do you spend time in a car during the following seasons?
a. Spring
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
b. Summer
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
c. Fall
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
d. Winter
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently19
The following questions regard experiencing in-vehicle audio entertainment (4-8) and are on a scale of 15:
4. How important is it that you have an audio entertainment either as a driver or a passenger?
(1) Very Unimportant (2) Unimportant (3) Neutral (4) Important (5) Very Important
5. How often do you to listen to audio entertainment while driving?
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
6. When listening to in-car audio entertainment, I prefer:
a. Music
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
b. Talk & Entertainment
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
c. News, Traffic, & Weather
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
d. Sports
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
7. How often do you to use the following audio entertainment sources in your vehicle?
a. MP3 Player
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
b. CD
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
39
c. Basic AM/FM Radio
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
d. Satellite Radio
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
e. Cell Phone
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
8. How important are the following factors when considering your in-car audio entertainment?
a. Commercial Free
(1) Very Unimportant (2) Unimportant (3) Neutral (4) Important (5) Very Important
b. Cost Free
(1) Very Unimportant (2) Unimportant (3) Neutral (4) Important (5) Very Important20
c. Sound Quality
(1) Very Unimportant (2) Unimportant (3) Neutral (4) Important (5) Very Important
d. Convenience/Practicality
(1) Very Unimportant (2) Unimportant (3) Neutral (4) Important (5) Very Important
e. Personalization
(1) Very Unimportant (2) Unimportant (3) Neutral (4) Important (5) Very Important
f. Type of Content
(1) Very Unimportant (2) Unimportant (3) Neutral (4) Important (5) Very Important
The following questions (9-17) regard experiencing in-vehicle satellite radio:
9. Are you currently a subscriber to satellite radio?
a. Yes
b. No
10. If yes, how did you acquire the subscription?
a. Free subscription with vehicle purchase
b. Free Sirius XM trial
c. Free subscription elsewhere
d. Paid subscription
e. Other (please define)
f. N/A
10a. If no, have you ever been subscribed to satellite radio in the past?
a. Yes
b. No
c. N/A
11. (If Applicable) How strongly do you agree/disagree with the following statement: I did not renew my
Sirius XM subscription because :________
a. Not Enjoyable
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree21
b. Installation Complications
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
c. Cost
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
d. Lack of Variety of content
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(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
e. Bad Customer Service
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
f. Use of Other Audio Source
(1) Strongly Disagree (2) Disagree (3) Undecided (4) Agree (5) Strongly Agree
12. How important is the addition of a free trial of satellite radio when purchasing a new vehicle?
(1) Very Unimportant (2) Unimportant (3) Neutral (4) Important (5) Very Important
13. How much would you be willing to pay per month for satellite radio to the nearest dollar?
$____
14. Have your heard of “Sirius A La Carte” which allows you to create your own personalized package of
channels and starts at $6.99/month?
a. Yes
b. No
15. Have you heard of “XM Mostly Music” which offers commercial-free music from nearly every genre
and starts at $9.99/month?
a. Yes
b. No
16. Have you heard of “XM News, Sports & Talk” which offers original entertainment, comedy political
talk, 24/7 sports talk, and world-class news, plus local traffic and weather and starts at $9.99/month?
a. Yes
b. No
17. How interested are you in the following services offered by Sirius XM?
a. Sirius A La Carte
(1) Not At All (2) Very Little (3) Undecided (4) Somewhat (5) To A Great Extent22
b. XM Mostly Music
(1) Not At All (2) Very Little (3) Undecided (4) Somewhat (5) To A Great Extent
c. XM News, Sports & Talk
(1) Not At All (2) Very Little (3) Undecided (4) Somewhat (5) To A Great Extent
The following questions (18-19) regard the use of your personal cell phone:
18. Do you currently use a smartphone? If yes, do you use your smartphone for the following:
a. To listen to music
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
b. For any type of news updates
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
c. For any type of sports updates
(1) Never (2) Rarely (3) Occasionally (4) Frequently (5) Very Frequently
d. N/A
19. If you were subscribed to Sirius XM, how interested would you be in adding the Sirius XM smartphone
application for an additional $3.00/month?
(1) Not At All (2) Very Little (3) Undecided (4) Somewhat (5) To A Great Extent
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Lastly, I would like to gather a bit of information about you. The following questions (21-22) regard your
demographics:
20. What is your age?
_______ year(s) of age
21. What is your gender?
a. Male
b. Female
22. What is your occupation (choose all that apply)?
a. Student
b. Part-time job
c. Full-time job
d. Unemployed
Thank you for participating in this study! Once the study is completed, we would be glad to give you the
results. In the meantime, for more information on the study, or if you have any other questions or
concerns please contact Dr. Susan M. Strohm at +1 814-863-0535.
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XV. Appendix B (Survey Results/Simmons Data)
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