Helio + Deutsch LA … Tsk. Tsk.
October 17, 2007
Every time we see advertising for Helio, we giggle just a bit. Not out of malice, but from nervous confusion at its wayward handling of what could have been a great brand.
Helio is one of the few phone makers to offer 3G service and GPS positioning, which is arguably very cool. However, the advertising for Helio never bothers to explain to the general public what 3G service is. Instead, they put up billboards featuring taglines such as, “Don’t call it a phone.” The brand also tries to get users to call it a “device” in its stores and print messages. Huh? Okay, so what the hell is a “device?” What is Helio – a cell phone maker, a service provider, a content service? And why should you make any sort of switch?
The work coming from their agency, Deutsch LA, addresses none of these issues. Instead, they employ the “irreverent, hipster” approach in such fare as their recent booklet on cell phone etiquette that does little to clear up consumer confusion. PSFK also wrote a short blog piece that said “-the brand has been off-message, off-style and just tried too hard to be seen as cool rather than try hard to be so good that the brand became cool.” If you want more info on Helio’s “This Is Not Your Father’s Oldsmobile” approach, check out an article written by Thomas Sherman in 2006 when the brand had a lot of buzz.
Deutsch might have focused on a different niche than the hipster marketplace. Hipsters everywhere have smart phones, but they’re all about the cheap. If Deutsch had done a little market research, they’d have known this. These kids are trying to be the next Yeah Yeah Yeahs and pay for their limited edition kicks, so whatever gets them their email at the lowest price, while making them look just a little cool is what they’re signing up for. Trust. Trio? Sidekick? Making out like bandits with those kids.
One of the brand’s backers, Earthlink, recently decided to halt funding leaving them with SK Telecom’s roughly 250M stake, but if you know anything about MVNOs – you’re aware they eat up cash like Pam Anderson does men. They’ve also been very much forced to lower the pricing for their handsets and their “Total Happiness Guarantee” to consumers has proved to be bollocks. See an example of that here. Then there’s the numbers. The company lost $30 million in the first quarter of 2007 despite revenues being up ($47 million in the quarter, versus $30 million in all of 2006). And get this – Helio gets around $100 in revenue per user, which is double the industry average.
From CNET: “After six months of aggressive marketing, it had only about 70,000 subscribers, as of December 31, 2006. That number is expected to increase to 100,000 by the second quarter of 2007. While these figures may be slightly better than other MVNOs, such as Amp’d, which signed up only 30,000 subscribers within eight months of full marketing, it’s much less than what bigger carriers are adding on a quarterly basis and what other MVNOs reported in their early days.”
Hunh… The big money losses seem to come from infrastructure costs and meanwhile, they’ve got a slow build in subscribers. So, bad management is to blame for empty stores, broken promises and confusing advertising? Sounds like it. Regardless, their recent deal with MySpace is a long shot if they’re looking for a savior.
