XM's Marketing Strategy - is there one?

Monday, July 10, 2006 at 2:43 PM
Tags: 2, XM

XM TV CommercialReading a heated recent post in the Lefsetz Letter (scroll down to "XM/Sirius") made me pause for a bit. There's been grumblings about this for a while, but recently it's gotten louder and louder. XM's marketing sucks.

Lefsetz's statement right here says it all:

Sirius has the one thing XM lacks.  Marketing.  The marketing is SO bad at XM you’d swear a teenager is running the operation.

What does XM stand for?

We know what Sirius stands for.  Howard Stern and celebrities.

XM stands for…baseball.

XM has a REVOLUTIONARY music programming concept.  Of truly changing the marketplace.  By not insulting the listener.  By making broad swaths of music available for listening.  Does anybody know this?

There's something here that I think the boys at The Eck need to really stop and think about. XM is an incredible service. People who experience it love it. But that all means nothing if people aren't aware of it. The problem: XM's brand seems to have no singular direction.

Let's take a look at slogans as an example. Beyond AM, Beyond FM, XM. This was one of my favorites, though I believe it's been retired (unfortunately) in place of Listen Large: America's Largest Playlist. Which targets the iPod market, steering away from "radio" and more towards "music" - a strategy I can't say I agree with. But then there's still Radio to the Power of X, which is still being utilized through the service.

Yeah... wait, what? Which one is it? If they can't keep a consistent slogan, then the rest of the message is bound to be equally inconsistent.

Now I don't know if this spells the impending departure of Hugh Panero (as the beginning of Lefsetz's post implies), but this level of indecisiveness should spell the end of whoever is running the MarComm show. There needs to be some drastic change, some excitment over there. Some rule breaking.

Here's a tip: stop designing by committee. The temptation is always to try to be everything to everybody, so you ask for everybody's input. But that just creates a bland, lifeless message. Why? Because the message is undoubtedly a compromise. Just put a core group together and let them work on the direction. That's why you hired them.

Here's another tip: fire the ad agency. Is it still Mullen? Why? They did great magazine ads, but their TV spots just aren't connecting - TBWA/Chiat/Day did a better job. XM needs to wake up their image. Being market leader means you need to work even harder to grow. My vote? CP+B. But that's just me.

Lefsetz has one important point - shit rolls uphill - so unless things start improving, and improving quickly... calls for Panero's head may soon ring true.

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Comments

This is such a huge issue--XM has completely missed the boat on this--it is a sad day when the best XM ad is an Avis ad. Instead of focusing on marketing, XM has misstepped, and thought tha being more like FM is the right move--so they brought in Jon Zellner and Steve Kingston who are ruining the service--Kingston has pillaged the once beloved Ethel with tight uninspired playlists, and repetition--they should put their energy into marketing, not becoming more like FM--

Satellite radio is something that people don't quite understand until they actually have it--that is why marketing is key--

Excellent recommendations, Ryan. I sure hope someone at XM is listening! :)

It has nothing to do with marketing! People have a choice in sat service. People are choosing Sirius. Sirius has never been big in the marketing dept. I can count on 1 hand how many commercials sirius has put on tv in the last 4 years. xm has had many. plus they are in many magazines, on billboards (around the holidays). every ny ranger game i watched last season mentioned XM about 30 times per game, especially in the intermission reports. plus, the ny auto show the past 3 years had XM signage all over the front of the javits center.

first it was the Inno hitting stores late, then it was the lack of inventory thanks to the FCC(By the way, there is no inventory issue), now its because of the marketing dept?
you guys crack me up. XM had great numbers last year thanks to GM's employee discount running from june-sept. thats it!
so what happened to XM you ask? they didnt sign stern. ive never been a huge stern fan, but you can not ignore the impact he has had on the sat radio industry!

I absolutely agree with your feelings about the TBWA/Chiat/Day ads. I remember seeing them in the movie theater just before the previews, and they did an outstanding job telling the audiance just what XM was all about. That said, I believe the reason they retired that campaign was due to 9/11... it was thought that seeing people and objects falling from the sky might be a bit too much for a shellshocked audiance. Can't say I don't see that point in hindsight, but clearly XM needs to get back on the ball.

BTW Ryan, first time poster, but long time lurker. You've got a great site here.

sirius word of mouth rocks why advertise maybe sirius can get cbs to run another stern promo for free...

the free press killed the xmsr buzz

I really do hope someone at XM is listening... err, reading. I would be *ASHAMED* if all the public buzz was that my dept is doing a horrible job. IMAGE IS EVERYTHING!

Philmore: I'm not saying that the shitty numbers are Marketing's FAULT. But that there's no unified message behind XM. There's no passion behind their campaigns. There's nothing.

Sirius didn't NEED to market, because of Stern. THERE'S NO DOUBT THAT STERN HAS A MASSIVE INFLUENCE. None whatsoever. I'm not saying this is a SIRIUS vs XM thing. There are PLENTY of customers to go around.

Chris: I know about the 9/11 issues. But there are other ways to express the same message. That commercial just happens to capture it beautifully. If Mullen can't come up with a better way to say it - then FIRE THEM.

(hey btw, glad you enjoy the site and have decided to join the fray!) :)

>> It has nothing to do with marketing!

So what happened to XM you ask? they didnt sign stern. ive never been a huge stern fan, but you can not ignore the impact he has had on the sat radio industry! >>

Sorry, but that's a load of horse puck - marketing has *everything* to do with how many subscribers a service has. What should be impressive about XM is the number of subs they have *without* signing Stern, but they've done little since to try and make up the difference. The reason it had such a huge impact on Sirius was because of the low # of members they had in the first place. I'm guessing that had a lot to do with Stern's decision as well - a chance to make a bigger splash in a smaller pond, as opposed to possibly getting lost in the shuffle at XM. Along with Sirius obviously wanting to pay more for his services.

Not sure what I'd have signed up for if certain features were taken out of the equation (baseball, O&A), but I guess that's what ultimately sways people one way or the other - personalities and exclusive content.

Which service has the better music selection is even *more* of a subjective issue - they both offer commercial free playlists on dozens of channels in every format imaginable, so again it boils down to personalities (Dylan, Willie Nelson, etc).

XM needs to put someone like Dylan in a national spot, much like the Elton John spots a while back. Have him listening to an Inno, clips of him doing his show, etc. Something...ANYTHING.

Like I've always said, however, is that a sampling of the service is THE best marketing tool, period. I've bought gift subs for 3 separate people (with radios), and after their trial period they've ALL picked up the subscription on their own. If XM could figure out a way to market in this fashion somehow, I have no doubt in my mind that people would sign up in droves.

Perhaps XM could buy some (cough)commercial radio time to do an infomercial of sorts (half an hour?)that would give the listener a sample of everything available on the service? I'm picturing one infomercial dedicated to the music, one for the news & sports, and one for the talk personalities & extra features such as weather, traffic, etc, etc...

Very nice!!! I hope XM is listening.....

btw you forgot to mention the crappy XM website.

I don't know if "Philmore" ever watches TV but he is mistaken by thinking that Sirius does not have a ton of marketing. I really do not think it is just a case of people choosing Sirius over XM as apposed to people chosing Sirius because they have HEARD of it. I have both services and I can tell you that if I had to dump one Sirius would be out the door. I love music and with their narrow playlists I would go insane just listening to them. I wish people could "test-drive" both services for atleast two weeks and then decide to purchase a unit. But until that is option is available, XM needs to step up to the plate.

>> I'm not saying this is a SIRIUS vs XM thing. There are PLENTY of customers to go around >>

Absolutely. It's an XM vs terrestrial thing. (As well as a Sirius vs. terrestrial thing too) Satellite STILL has a long way to go to get people on board with this brand of technology. Maybe once it comes standard in more vehicles and home systems (alá cable TV), more people will understand what they're missing out on.

I agree completely. I think that the "Beyond AM... Beyond FM..." was the best slogan they've used yet. And that commercial is one of my all-time favorites... it does a great job of conveying the message, has a bit of humor, and I think will get viewers' attention trying to figure out what's going on there.

Definitely think Sirius is killing XM promotion-wise... XM just doesn't have any 'edginess' in their promotions... and I think using the word 'playlist' isn't a good idea... makes it sound too 'mechanized'... like passionate people who care about the music they play aren't the ones in control...

I think XM's problems go beyond marketing, but it is definitely a problem. WTF was up with that yellow ad they ran before fathers day?

Ryan, your suggestions are good and I hope XM takes them. I'm a Sirius only guy but I hope neither of them fails.

Kudos Ryan, fucking awesome site. I think many of us maybe jumping the gun on xm. They still added a ton of subs. They may have gotten ahead of themselves by means of upping their sub predictions because of sirius' explosion from the Stern effect(which no one believes is continuing).

Lets all hope they continue adding customers. I love sirius but i want testical radio's nuts to fall off. Give it time and lets hope problems are dripping away.

Panero is just as good as gone. Marketing against the iPod juggernaut is just plain stupid. First off, they don't stand a chance against Apple's marketing machine and secondly, it's not the same audience. iPod users want control of their playlists and satellite radio users want their programming done for them with more choices than regular radio. XM focused too much on Stern rather than focusing on marketing the product. This will probably change when Panero is gone.

I would say a firm like Campbell-Ewald who already have the GM/Chevy/Cady account as well as the Navy (who did a great job branding Accelerate your life)

Just some thoughts. Before anyone accuses me, I do not work for them. I work for one of their clients and we have been impressed by their ability to be in touch with the target consumer

I say fire Panero, give Lee Abrams the job along with his CCO job. Even better, fire Panero, give Logan the CEO job. He seems to listen to people that aren't counting beans or balancing a sheet or looking at the stock price.

Ryan's got it right. Stop discussing what SHOULD be done with XM and take Lee Abrams' philosophy of AFDI into the boardroom and into the marketing department. "We wanna run ads with the artist a subscriber is listening to is actually performing right next to them." "DONE!" "But shouldn't we discuss..." "No, it's done." No teeing anything up, no blueskying, ACTUALLY FUCKING DO IT!

Might I add, XM's whole problem is that they're focusing on...well, they're not focusing on anything.

People on this website are talking trash about XM just because Sirius claims that they added more subs. What all of you dont realize is that Sirius lies about their subscription total because they count unsold cars as being customers. With O and A brodcasting to millions of listeners everyday on free FM millions of people are catching the virus and buying XM to help support the boys. Sirius will be out of business in no time when everyone cancels because Old Hoo Hoo sucks and is on vacation every week. O and A Army, spread the virus. Free FM and XM rule.

What everyone is missing is the FACT Sirius is ALOT more than just Howard Stern and celebrities.

XM can't even match the music selection on Sirius, Sirius completely is the BIG DOG when it comes to Rock and Metal, Howard, Bubba, NFL, and now with NASCAR xm is way done...

When one thinks bad radio there is AM, FM and XM. When one thinks premium programming, talent, and quality you think SIRIUS the BIG DOG.

Ramone, please shut up & ban yourself from life by putting a gun in your mouth & pulling the trigger.

Ryan, you hit the nail on the head. It's not the only reason XM has been receiving disappointing numbers, but it's certainly a huge issue. XM desperately needs to correct this issue before it hurts them long-term.

"It has nothing to do with marketing!"


Are you serious?! It has everything to do with marketing. Sirius has the two BIGGEST marketing experts in radio: Karmazin and Stern! Not to mention all the media attention they get.

Ryan, excellent find.

i think the person that brought o&a should be fired. not for bring those two but for not promoting them more and also fire the person who let them go to free fm no one is going to buy something that they can get for free.they promote ellen having a show but thats her talk show.promote your exclusive content.you dont have exclusive content with o&a and them bad mouthing stern from time to time isn't helping matters either

p.s. ramone is a stern fan whos posing as and o&a fan no one can be that stupid

p.s. ramone is a stern fan whos posing as and o&a fan no one can be that stupid
I agree. There are a few tells that tipped me off this time, and I won't divulge them here for certain reasons. At base, he's a really poor fan.

I think ramone is actually Ryan. Hey, 75% of Ryan's name is in ramones name. How did this liquid poo become so famous on orbit? even if you say to ignore him, your not ignoring him by saying to ignore him. therefore, h=23x4(x-7y).

Choose any ad. agency acept modernista. They have screwed up majorly on the HUMMER account.

Ramone: You bring nothing to the table. Consider yourself banned.

If you want to discuss this, email me at ryans@orbitcast.com and we'll take this offline.

Sorry to take the comment discussion OT, but I couldn't take it any longer.

Anyway, back to the Marketing thing. I don't think its that they're not *spending* enough on marketing - but that there's no unified message, and the message that's out there is just too complicated.

Having Snoop holding an Inno only appeals to one group of people: XM Employees. The message otherwise is LOST with the rest of the public. *WE* understand that it's supposed to be Snoop + Inno = Content + Technology. But Joe Sixpack doesn't get that. They see Snoop holding up a cellphone. And the Inno commercial? It's 20 seconds of SILENCE... for a company thats core strength is MUSIC! Putting some text up saying "Spoon was discovered here" does NOT resonate with the consumer the concept of "music discovery" - again, the only people who even THINK about "music discovery" are people in the industry. So what good is the message?

Good write-up Ryan! and thanks from all of us for banning Ramone!

I like how this story spun into a Sirius getting stern thread when it was about fixing XM's marketing issues. They need to go back to what got them to #1 in the first place and that would be going to that first marketing firm.
Sirius nor XM is gaining as many subs as they want so don't say Howard is why blah blah, because you will have nothing to say come a year from now when Howards brought as many as he could(which isn't as much as Howard thought he could get).

Putting the Inno side by side with the iPod is not a bad thing if you show why its so much at the same time, and putting snoop behind it doesn't show that person that got suckered into an iPod why the inno is better. I feel like the origional marketing firm could do a much better job at showing this then the current one could.

Nice O&A quote Ryan! haha
"You bring nothing to the table."

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