Close-Up: Live Issue - Does 3 need to review brand strategy?

Should 3 change its communications to appeal to an older demographic, Pippa Considine asks.

Last week, it was reported that the mobile network 3 was undertaking a review of its brand strategy. Any suggestion that it might be reviewing its £39 million ad account, which is with WCRS, has been denied by both client and agency. But it would be unsurprising if it was having another look at how it communicates.

The mobile market is highly competitive and talking to customers is crucial. While customer churn is one of the biggest problems that all mobile operators face, their agencies seem to be experiencing a similar fate. Earlier this year Orange moved the bulk of its account from Mother to Fallon, and Bartle Bogle Hegarty is now pitching for JWT's Vodafone business.

A late entrant into the market in 2003, 3 is a smaller player than the big four of Orange, Vodafone, O2 and T-Mobile. The speculation behind the review is that in order to grow its customer base, 3 needs to widen its appeal beyond its predominantly youth franchise. The appointment of a director of brand and marketing communications, Gary Pepler, who joined in June from Sony Europe, might also signal some fresh thinking.

WCRS, the launch agency for Orange, has been behind some high-profile ads for 3 and the brand's business has grown significantly in a short space of time. The operator already has around 3.75 million subscribers.

But there are corporate pressures. The owner of 3, the Hong-Kong-based Hutchison Whampoa group, has deep pockets, but its ambitions of creating a profitable 3G mobile network across Europe are taking longer than hoped. Despite UK revenues growing by 16 per cent in the first six months of 2006, its customers have been fickle.

At its launch in 2003 as the UK's first 3G operator, 3 positioned itself as the videophone, but it made little headway. So it embarked on an aggressive pricing strategy and in 2004 moved its advertising out of TBWA\London into WCRS, switching to distinctive, surreal advertising, with an Asian feel - love-it-or-hate-it ads such as "cherry tart" and "jellyfish".

The youth market loved the ads. According to the mobile analyst Thomas Husson at Jupiter Research: "The reason that it has been successful is that its user base is quite homogoneous." Its See Me TV service has had more than 12 million downloads since launch and its Kink community has 350,000 postings per day. Plus, 3 accounts for 76 per cent of the UK's mobile music download market.

The mobile phone company prides itself on being different to the other players in the market, referring to them collectively as T-orangefone. It has kept its other-worldly ads, while shifting it into more specific messages and making the imagery slightly less Asian. It argues that the image can appeal beyond a young demographic, as older consumers catch on to the new technology.

But there must be a possibility that it will alienate? At Saatchi & Saatchi, the business leader on T-Mobile, James Griffiths, can see that growth would raise questions about the brand. "The question will be, 'can we afford to continue with a branding and communications strategy that is youthful?'," he says.

Husson says: "3 has to keep its customer base loyal, and they're mainly young people. If it tries to attract the older demographics, it may have difficulty remaining cool. It's difficult to say to what extent it can reposition itself in the market."

Got a view? E-mail us at campaign@haynet.com

BRAND CONSULTANT - JOHN ALLERT, CHIEF EXECUTIVE, INTERBRAND UK

"3 is a modern-day oddity - a brand which seems to lack an idea at its heart. In its early days, the 3 brand (but arguably not the 3 business) derived great benefit from a cut-through name and identity, and latterly a distinctive and ubiquitous advertising campaign.

"However, I, for one, was unsure as to what the brand was saying: if it was brand sexiness, it just wasn't enough; if it was platform technology, people missed the benefit; and if it was content... collective yawn. Brand distinctiveness is no longer an answer unto itself. Orange learned that the hard way. It seems from recent events that 3 may be following suit."

CREATIVE DIRECTOR - ROONEY CARRUTHERS, CREATIVE DIRECTOR, VCCP

"It doesn't seem to be a piece of branding which is integral to an idea. The TV advertising doesn't match the advertising on posters or in-store, it seems a bit disparate. They glamorise the TV so much that when it's not on TV, it feels a bit of a damp squib.

"Its TV is fantastic, and its very pointed for a young audience, but the logo doesn't look young.

"That kind of communication needs to be in-store, on posters, on websites, like a piece of spirogyra that gets bigger and bigger. It has done a good job, but you need a bigger picture."

STRATEGIST - DYLAN WILLIAMS, STRATEGY DIRECTOR, MOTHER

"As a late entrant into the market, 3 had a tough job on its hands. I think it has been really successful at making room for itself in a cluttered space. It's Asian kitsch, heightened reality. The world that the brand inhabits was original and appealed to early adopters of 3G. It was bang on the zeitgeist in the way the brand expressed itself as a community - 'we like this', 'we led that'.

"As a strategist, I'd urge caution against radically changing the existing brand strategy in order to gain wider appeal.

"It is doing a lot of things right. For me, great brands don't reinvent every four or five years. Yes, refresh, but the best thing is to stay original."

ANALYST - ADRIAN BASCHNONGA, ANALYST, ERNST & YOUNG

"3 was a late entrant to the mobile market, so it's had to compete aggressively on price. But it was the first operator to launch 3G and has also been an innovator. It has very good visibility in terms of its offerings.

"Mobile operators are trying to boost the relationship with the customer. So, for example, 3 recently acquired 95 retail outlets - 73 from The Link and 22 from O2 - and is starting to ramp up its direct sales arm.

"3 has high subscriber acquisition costs and a high churn rate, but that happens typically when you compete on price. Hutchison Whampoa has got very deep pockets and is committed to its European 3G operations."

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