DirecTV Group bets big on March Madness, investing millions for rights to show the games that will decide the NCAA basketball championship. To hedge that wager, the No. 1 satellite company for the first time is trying to lure new viewers by showcasing the interactive features of its telecast.
The satellite service’s March Madness package lets fans watch three games simultaneously on the screen, and it automatically updates the tournament brackets that track winners and losers. DirecTV capped its five-week marketing campaign with an advertisement on the front page of USA Today’s entertainment section.
“The March Madness package includes a number of interactive features that look really sexy on screen and are easy to understand,” said Eric Shanks, executive VP of DirecTV Entertainment. “It takes about two minutes with your remote control to fill out your bracket, and anytime over the next two weeks you tune to these channels, if your team wins you get a check mark, and if you pick the wrong team you get a big red “X,” and you can do this while watching the game.”
The NCAA tournament spurred advances in programming, with CBS streaming games on the Internet that drew an audience big enough to clog the slots allocated for viewers. Apple Computer’s iTunes store sold game clips for downloading. So far, DirecTV’s decision to market its interactive features has helped spur customer gains for its $59.95 Mega March Madness basketball package, said Paul Guyardo, the company’s chief marketing officer.
The NCAA games and DirecTV’s interactive features may attract new customers who are more willing to buy more expensive services such as high definition, digital video recorders and other sports packages, said Adi Kishore, analyst with Yankee Group. Additional features help differentiate services when consumers have choices as to where they’ll watch sporting events, he said.
“Consumers have choice now, and that is a little scary because it can drive price declines, and no one wants that to happen, so you need to protect your margins,” Mr. Kishore said.
DirecTV chose the NCAA game brackets and three-in-one TV screens to kick off its new marketing approach because they’re easy for customers to operate, Mr. Guyardo said.
“We are always looking to offer things that differentiate the brand, the unique selling proposition that sets us apart from our competitors,” he said.
DirecTV supplemented its USA Today ad with spots ads in ESPN Magazine, Sports Illustrated and Sporting News. It ran TV commercials on ESPN, Fox News, CNN and ABC and radio plugs on ESPN Radio and XM Satellite Holding Co.’s pay radio service.
DirecTV’s experiment with interactivity during March Madness built on earlier projects. The interactive enhancements to the Olympics were used by 1 million unique households during the 17 days of Olympics coverage.
The satellite operator’s Olympics package also generated more than 4 million individual interactions, or about 4.5 customer interactions per home. Also, nearly 40 percent of the premium package customers for DirecTV’s Sunday Ticket football service used interactive features.
Interactivity has become a mandate at DirecTV. Mr. Shanks said the satellite provider decided in the fall that it would acquire sports packages only if it could also secure the interactive rights, as it did with football and March Madness.
DirecTV’s New Marketing Strategy
The satellite provider’s new marketing approach to highlight exclusive content and applications kicked in with its March Madness marketing campaign and will continue later this year with Sunday Ticket for football.
“This is something you will see continue throughout the year,” said Paul Guyardo, chief marketing officer and executive VP for DirecTV. “It’s just good, solid marketing strategy rather than to be talking about what everybody else is talking about, which is price. [We will focus on] something unique, compelling, a differentiator, something consistent with the brand and why they should switch, why they should pick up the phone and switch. If you rely on price, your competition can match.”