2010 Playstation 3 “It only does everything”. A Campaign Audit Table of Contents EXECUTIVE SUMMARY3 INTRODUCTION4 SITUATIONAL ANALYSIS4 COMMUNICATION OBJECTIVE AND MESSAGE/MEDIA STRATEGY6 CAMPAIGN BUDGET11 CAMPAIGN EFFECTIVENESS12 WORKS CITED LIST15 APPENDIX A17 APPENDIX B18 APPENDIX C19 APPENDIX D20 APPENDIX E21 EXECUTIVE SUMMARY The reason behind this campaign audit was to further our knowledge and skills needed in the area of advertising and promotion. In particular we are focusing on the “It only does everything” campaign run by Sony, to promote the release of their new model Playstation 3.
The research draws attention to the overall effectiveness of the campaign. It brings into context the position that the product was in at the time the new campaign was introduced. The research highlights the communication objectives and media strategies undertaken by Sony to promote the Playstation 3 in the desired way. This includes what methods and tools were used, which methods were focused on most and how the organization came up with the rationale for the split between communication tools. It also discusses the budgets set for the campaign and also how the finances were split between tasks.
This all comes together in order to analyze exactly how effective the campaign was. Sony is one of the most well recognized organizations across the globe and amongst other products is extremely well known for their gaming products, known to us as Playstation. This audit is based on prior research done by our group members after being assigned the task by the unit coordinator. Most of our research has come in the form of articles, and promotional videos, as well as general word of mouth. This audit will serve as a basis to our understanding of the processes made up of conducting such tasks.
It is one of many steps we will undertake in furthering our knowledge in the area of advertising and promotion. INTRODUCTION We have chosen to analyze the Sony Playstation 3 (PS3) ‘It only does everything’ campaign. The console market is extraordinarily competitive; companies must produce advertising campaigns that stand above the rest, and to do this they poor billions of dollars into the marketing departments. With sales declining and the Microsoft Xbox 360 looking like it would be the clear victor in the current generation of console wars, Sony launched the ‘it only does everything’ campaign.
This campaign is vastly different from the previous more abstract campaigns Sony has used in the past. The campaign was launched on the 27th of August 2009 and since then Sony has recorded a 184% increase in sales and intention to purchase has increased from 19% to 36%. It should be noted that the campaign was launched at the same time as a significant price drop for the PS3. We chose the PS3 ‘it only does everything’ campaign because of the success it has had for the product.
After years of trying Sony has created an ad campaign which appeals to the masses of America. SITUATIONAL ANALYSIS The American market is by far the largest gaming consoles market. With roughly 70% of Americans playing videogames it is no wonder that it is such a competitive market (Whitney, 2009). The PS3s main competitors are the Microsoft Xbox 360 and the Nintendo Wii. In the months leading up to launch of the new advertising campaign the PS3 was selling on average half as many consoles as the Xbox 360 (NPD sales figures) [see appendix A].
The global financial crisis also had an impact on the console market, with the US game market seeing a 29% drop in revenue in July 2009 (Nutt, 2009). An opportunity that Sony saw was the development of the high-definition (HD) movie market. Being the main driving force behind the blu-ray format (they were the key developers) and having the cheapest blu-ray player one the market (the PS3 itself) Sony is in a position where they could potentially make the largest profit from this new HD format. Another opportunity for Sony is to further develop the digital distribution platform, the Playstation Network.
Digital distribution benefits both producers and developers as it removes the middlemen, retailers, from the distribution network, meaning more profits remain with Sony. This also poses a challenge, as the target market needs to be educated about the benefits of digital distribution as opposed to purchasing a physical copy, which is the most common method currently. Another challenge Sony faces is convincing people that they need to upgrade from DVD, which is still the most common way to view movies, to blu-ray, the newer up-and-coming technology to view movies.
Some factors in the market that contributed to the success of the campaign were the acceptance of blu-ray discs as the hi-def video format, the rise of videogames as a socially accepted form of entertainment, and the low price and wide availability of HD television sets. Whilst high-definition televisions are becoming much more common still not everyone has one. Trying to convince a consumer they need a blu-ray player is going to be near impossible if they do not have a HD television to connect it to. The campaign had three main marketing objectives, increase market share, expand its target market, and increase profits.
The video game industry has been likened to the razorblade industry by Duke Ferris, founder and chief editor of the popular gaming site GameRevolution. com, “consoles have traditionally operated on a “razors and razorblades” model, losing money on the hardware in order to make it back on the games. Whilst Sony does profit from the sale of consoles it makes a larger profit from the sale of games. For this reason the main marketing objective of the campaign was to increase market share. Another objective of Sony’s was to expand its target market.
Previously Sony has only targeted 17-34 male gamers with their campaigns but this new campaign is trying to capture a whole new market. Sony has placed more of a focus on the multimedia capabilities in hopes of catching more customers, not necessarily hardcore gamers, but those looking for a good quality, high-definition all-in-one console. In particular, Sony focused on marketing the blu-ray player and the digital distribution network linked to the PS3. The name of the campaign itself ‘It only does everything’ is a key indicator of this.
The last marketing objective was simple, to increase profitability. To do this Sony had to succeed with their first two objectives. Sony used demographics and physcographics to segment the market. Traditionally the target market for home consoles has been males aged 17-34 however with this campaign, Sony has chosen to break from this mold by targeting young families, as well as the traditional 17-34 year old males. Originally the PS3 was positioned purely as a gaming console, but now the new campaign is informing its new target that it does everything.
This refers to the fact that it is also a blu-ray player, so one can watch HD movies and shows, provides access to the PSN (an online digital distribution network) as well as being a complete media centre. The segmentation has been effective with Sony recording a 184% increase in sales and a 19% increase in intent to purchase. COMMUNICATION OBJECTIVE AND MESSAGE/MEDIA STRATEGY Sony utilizes an Integrative Marketing Communications campaign to market the Playstation 3 gaming system. The campaign was introduced in a way to capture a large and varied audience and to communicate the broad features and benefits.
The different advertising vehicles include television commercials, Internet advertising, social network advertising, and place of purchase advertising. The TV advertisements are the most recognizable form to the consumers. This section of the campaign is highly in line with the target and objectives set out by the organization. There are a series of nine television commercials all filmed in a similar manner, with a similar message, providing new information about the product, although they each highlight a different feature about the PS3 (Youtube 2010).
There are many members of the target market represented in these commercials including: men and women ranging in age from teenage to elderly, young couples and even families. Sony has utilized another very effective source in this campaign, the Internet and social networking sites. A variety of images promoting the versatility of the PS3 have been posted on a considerable number of websites, an example can be shown in Appendix B. Social networking includes using Facebook and Twitter to interact with the target market. Carter 2007) Members of the target market are very in tune with technology and can use these different forums to interact with others who are interested in the product. This gets consumers more involved with the brand, increasing their liking of the brand and potential to encourage positive action from the consumers. The Sony website provides an efficient method to search for retailers supplying the product as well as the option to purchase with the click of a button over the Internet.
The communication objectives include reaching more target customers, providing the customers with the new information about the product, including the new games and gaming abilities, the ability to access the internet, being able to watch blu-Ray DVDs, the sleek and slim design, differentiating it from its competitors and advertising the new lower price. (Dille, n. d. ) & (Moats 2008) The overarching message of the campaign is that the product does everything. (Playstation 2010) Sony is using a creative marketing strategy approach, as it follows all the features of a creative marketing strategy. Shimp 2010) The Steps include 1. It follows from a sound marketing strategy: a. All advertisements are similar throughout the various vehicles. Sony connects all the advertising vehicles together through the similarities between them. 2. The advertising takes the customer’s view: b. Sony takes into account the loyal customers who want a high quality console c. Realizes how their customers use technology and media, many spend a lot of time watching television, surfing the web and networking. 3. It finds a way to break through the clutter: d.
By being humourous. 4. The messages have never promised more than the product can deliver: e. Stating that it can do everything seems like an inherent overstatement, but it is an all-in-one console. 5. It prevents the creative idea from overwhelming the strategy. f. Sony uses simple humour to reach customers while providing each segment with information needed to hopefully make a positive purchasing decision. The other type of strategy used is a unique selling proposition (USP). (Shimp 2010) The USP is that it is a high-definition all-in-one console.
One could also consider this a preemptive strike against competitors, as now no other competitor will be able to say the same without at least some comparison to the PS3. Another strategy used to understand the marketing campaign is transformational advertising as the PS3 has associated itself with some physiological characteristics atypical of a gaming console experience (Shimp 2010). It attaches itself with bringing families and couples together be being able to spend quality time together. Another type of strategy Sony can implement is product placement. Shimp 2010) Through product placement one can get a better understanding of the many different uses of the product and see it in action. It can solidify the message that it does everything as the customer can see that all in one show, instead of having to hopefully see all the commercials over time. Sony uses humour appeals in all messages in the marketing campaign. It is a successful use of an advertising appeal for many reasons. It created buzz about the product. Humour is used more successfully with established rather than new products; Playstation is quite the established brand with strong brand recognition.
Humour is also more appropriate for products that are more experiential. The whole product is based around user experiences, i. e. playing games, watching movies and interacting with others through the network. Although humour is interpreted differently among different demographic groups, Sony did cover many demographic groups in their commercials with slightly different humourous appeals for each targeted segment. Endorsers used in the commercials do not fit the normal pattern of endorsers.
The starring roles are played by Kevin Butler a completely made up character created by the brand, but now takes on many characteristics of a real person. He has his own Twitter account, (Twitter, The Kevin Butler 2010), is featured in all the brands advertisements, and is potentially riding off preconceived notion of the success of the name Kevin Butler, please see appendix C. Although, as he is not real he has no resonance with the target market, therefore there are no preconceived feelings about this character that the target audience can attribute to him for the brand to ride off of.
Endorsers are used when applicable, that relate to games sold for the PS3. Some celebrity figures are used in some commercials in guest starring roles. For example, for one Major League Baseball (MLB) game there have been baseball stars used in the ads. Although are not as strongly used as the fictitious character. However, when celebrity figures are used there is great matchup between the figures used and the brand because it directly relates to the product, in such that the figures are also usually featured in the game they are helping to sell.
These figures also relate to the target audience because the target audience wants to see these characters in their games, and are happy to see commercials featuring their beloved sports players. The choice to introduce this campaign at a convenient time to promote the new slim model console gave the campaign another boost. A very widespread form of promotion across Australia was the use of these new PS3’s as promotional products for customers purchasing Sony Bravia TV’s.
This promotion was posted in many retailers mail magazines and further promoted the product. Sony incorporates into its marketing strategy, cooperative advertising, in which the organization provides retailers with the materials and guidelines to develop advertisements in order to keep the target and objectives in line across the board. As we can see there are a wide variety of methods used to communicate the marketing message and advertise the product. It is clear that the organization focused heavily on the TV advertisements, which received positive feedback.
This is an easy way to communicate their messages to an extremely large audience and is very effective in adding the message to the consumers product recall set. Internet and print advertisements were also heavily used to portray the message, mainly promoting the new price of the product. This is an effective method to promote messages in public places such as shops, billboards and signs. In conclusion the rationale for the split between forms of advertisements was very successful. It has and is still succeeding in communicating the message across to an extensive audience. CAMPAIGN BUDGET
This campaign was released with such a large magnitude; it is not surprising that Sony had to set aside an extensive budget to promote the new slim PS3 in the campaign. As the campaign is still ongoing it was hard to find exact figures as to how much was spent on marketing and promotion. By researching figures from past campaigns and taking into account the amount spent by major competitors we are able to get a rough idea on how much was spent on marketing and promotion for this campaign to date. The campaign was brought into use during late August 2009 and received a warm response. If we take nto account several figures concerning major competitors, being Microsoft (Xbox 360) and Nintendo (Wii) we can make a rough estimate as to how much was set aside for the promotion of this campaign. Expenditures promoting the Wii total an estimate of US$200million, although keeping in mind that the PS3 is a far more recognizable product. In 2006 Microsoft set aside a total of US$945million for advertising. Comparing this to Sony’s staggering 2008 advertising budget of US$1. 9billion, we can see that the expenditure on this campaign could be several levels above that of the Xbox 360 and Nintendo Wii.
While these figures give a rough estimate as to how much could have been spent on the PS3 campaign, it is known that Sony spent an overwhelming ? 82million (US$121million) on their European campaign alone. It is clear that the extensive efforts to promote the product in this campaign could have come at an extremely costly price. There are several budgeting methods organizations can take when promoting their products. Being such a large, well-known organization it would be impractical for Sony to use just one of these methods.
One method used would be the objective and task method whereby the organization decided on a goal and sets the budget accordingly. The campaign was aiming to change the perception of the PS3 and thus was communicating a very different message. Meaning that vast supplies would have to be allocated to the campaign. Another driving factor is the position the competitors are in. This gives rise to another method that Sony uses, known as the Match Competitor technique. In this the method organizations, Sony would check how much their competitors (Xbox 360 and Wii) are spending and match or even exceed these budgets.
Bringing into factor the methods used by Sony to position the PS3 in this campaign, as well as how much the competitors are spending on their campaigns respectively, we can quite easily assume that the budget of this campaign would have been in excess of US$400million. Without exact figures it is difficult to analyze how much was spent on each individual advertising method throughout the campaign. But with the focus on TV advertising and the exorbitant costs associated with this method, it is fair to say that a large proportion of their budget would have been allocated to this method. CAMPAIGN EFFECTIVENESS
The Playstation 3 campaign has had a positive effect on both the marketing and communication objectives. The three marketing objectives stated by Sony include; increase market share, expand its target market and increase profits. The communication objectives established were, to communicate; female friendly use, a sleek new design, features and price, as well as value for money. There were also hindering factors at play throughout the campaign period, which affected these goals. These objectives are standard for any business wanting to grow, however it has taken time and dedication to achieve them.
The objective to increase market share has been obtained as a result of the campaign. PS3’s main competitors in the market are, Xbox 360 and Nintendo Wii (Tribbey 2010). As illustrated in appendix D, the PS3 has the smallest amount of the market, out of three main players (NPD Market Share Numbers for Game Consoles 2009). However it has achieved the objective of increasing the proportion of market share. Peter Dille, senior vice president of marketing at Sony said “this is a result of the new brand campaign, price point and anticipated games. ” (Dille, 2010) Market share continues to grow as a result of the campaign.
The expansion of the target market has been a result of the campaign. Sony has deconstructed the stereotypical gaming users, and appealed to more demographics (Boyes 2008) Research conducted by Sony has proven the campaign to be successful in achieving this objective as discussed by Mariam Sughayer, analyst relations manager at Sony (Sughayer 2008). Consumers are more educated about the product creating greater understanding and appeal to the broader community. (Reilly 2010) Increased profits have been an objective that has required time to be obtained.
The recent development of new technology has allowed Sony for the first time to manufacture the console for less than the retail price (Now cheaper than 2010). This will allow the firm to turn a profit on the console as well as the games and accessories. As sales keep on rising, shown in appendix E, as a result of the campaign (Unit Sales 2009), the profit total will keep on escalating. The power of profit will push Sony into the next generation of gaming and become a stronger competitor. The campaign has succeeded in having a positively influential effect on the communication objectives.
The communication objectives focused on; female-friendly use, sleek new design, features and price, as well as value for money (Sony PS3 Campaign 2007). The campaign has successfully educated consumers (Reily 2010), making them more aware of the value proposition and the communication objectives intended by Sony. As consumers became more aware of the product, this has shifted their attitudes away from competitors (Barczak & Wesley 2010). The campaign caused a surge in sales, indicating that the objectives set where obtained from the campaign effectiveness.
A sales increase of 1000% has been confirmed by Chartracks and has been steadily increasing with some fluctuations (Grimm, n. d. ). The communication objectives will allow the PS3 to become stronger over the years while its competitors become obsolete (Tribbey 2010). The campaign has endured some hindering effects. The Global Financial Crisis hit the gaming industry particularly hard and during the Playstation 3 campaign (Lippert 2009). Also the console industry cycle plays a role in the sales figures and statistics of the product. (Lippert 2009).
These uncontrollable factors would have affected sales and caused fluctuations and strain on the objectives, not caused by the campaign. The PS3 Campaign “It Only does Everything” has maintained its forward moving momentum, by driving its forces towards obtaining the objectives set. Although the campaign came under pressure from external environmental forces, it has managed to exceed these and develop a truly successful advertisement. The campaign has allowed Sony and Playstation 3 to be a long distance winner in the future of the gaming consol market. WORKS CITED LIST 1.
Moats, Brian 4/13/2008, Marketing Plan: Sony Playstation 3. Available from http://brianmoats. com/Portfolio/Playstation_3_Marketing_Plan. pdf [ April 13, 2010]. 2. Carter, Meg, Jan. 29, 2010 Creating a Digital Echo Available from http://www. guardian. co. uk/media/2007/jan/29/mondaymediasection6. [April 27, 2010]. 3. Cheng, Jie, Freeman-Aloiau, Mark, Guo, Xin, Pullen, Anthony, March 6, 2007. Sony: Maintaining Dominance with Playstation 3 California Institue of Technology. Available from http://www. mcafee. cc/Classes/BEM106/Papers/2007/PS3. pdf [May 1, 2010]. 4. Dille, Peter, n. d.
Playstation Blog Available from http://blog. us. playstation. com/2009/08/27/it-only-does-everything/. [April 22, 2010]. 5. Playsation’s Channel available from http://www. youtube. com/user/playstation? blend=2&ob=4. [May 1, 2010]. 6. Whitney, Lance 20/05/2009, Survey: More people play games than go to movies http://news. cnet. com/8301-10797_3-10245437-235. html 7. Nutt, Christian 13/08/2009, NPD: U. S. Console Biz Sees 29% Drop In July 2009 http://www. gamasutra. com/php-bin/news_index. php? story=24837 8. Tribbey, M 2010, “PS3 Will Win Console War,” Home Media Magazine, vol. 2, no. 11, pp. 4. Available from: Proquest [1 May 2010]. 9. NPD Market Share Numbers for Game Consoles, 2009. Available from: <http://www. tgdaily. com/slideshows/index. php? s=200902131&p=2>. [4 May 2010]. 10. Dille, P. 2007, New PS3 TV Ad Campaign. 28 November 2007, Peter Dille: Blog. Available from: <http://blog. us. playstation. com/2007/10/31/new-ps3-tv-ad-campaign/>. [27 April 2010]. 11. Boyes, E. 2008, PlayStation 3 sales increase 178 per cent. 1 January 2008, Emma Boyes: Blog. Available from: <http://news. cnet. co. uk/gamesgear/>. [27 April 2010]. 2. Sughayer, M. 2008, Industry Sales Climb, PS3 Sales Climb Too. 22 January 2008, Mariam Sughayer: Blog. Available from: <http://blog. us. playstation. com/2008/11/31/industry- sales- climb-ps3-sales climb-too />. [29 April 2010]. 13. Reilly, J. 2010, Sony’s ‘It Only Does Everything’ Campaign Paying Off. Available from: ;http://au. ps3. ign. com/articles/108/1081778p1. html;. [28 April 2010]. 14. Now cheaper than ever to manufacture, 2010. Available from: ;http://www. mygaming. co. za/news/ps3/5854-Sony-finally-turning-profit-PS3-hardware. html;. 1 May 2010]. 15. Unit Sales of Hardware, 2009. Available from: ;http://www. scei. co. jp/corporate/data/bizdatausa_e. html;. [29 April 2010]. 16. Sony PS3 Campaign, 2007. Available from: ;http://awards. lbi. co. uk/playstation_bima. htm;. [27 April 2010]. 17. Barczak, G ; Wesley, T 2010, “Launch of the Sony PlayStation 3” Richard Ivey School of Business Case Collection. Available from: Proquest. [1 May 2010]. 18. Lippert, B 2009, “The Game is On” Adweek, vol. 50, no. 32, pp. 41. Available from: ABI/INFORM Global. [30 April 2010]. APPENDIX A APPENDIX B APPENDIX C
Kevin Butler is a famous retired National Football League (NFL) player in the United States. Kevin Gregory Butler (born July 24, 1962 in Savannah, Georgia) is a former professional American football placekicker who played for the Chicago Bears(1985-1995) and the Arizona Cardinals (1996-1997). APPENDIX D APPENDIX E PlayStation®3 Worldwide Hardware Unit Sales (Unit: million) | Q1| Q2| Q3| Q4| FY(*)| FY2006| -| -| 1. 7| 1. 8| 3. 5| FY2007| 0. 7| 1. 3| 4. 9| 2. 2| 9. 1| FY2008| 1. 6| 2. 4| 4. 5| 1. 6| 10. 1| FY2009| 1. 1| 3. 2| 6. 5| | | ( * Fiscal Year ended March 31)