Vonage Expanding VoIP Advertising Campaign Going Forward

With an ever-growing VoIP market and a lot of money at stake, Vonage recently reported that it wants to grow its VoIP line , looking to do so through a more aggressive advertising initiative.

Among the goals is unveiling a two-pronged attack that goes after clients who receive bundled cable services, with an angle at having the customers give their cable bills a more in-depth look.

Vonage has about 2.4 million subscribers, while the entire VoIP industry in the U.S. is about 26 million, according to broadband researcher Point Topic. The company estimated in a June report that more than 20 million of those are subscribed through cable companies including Comcast, Time Warner, and Cablevision.

Reports indicate that the campaign is slated to focus around the bottom line for the public when bundling their cable bills such as “Our cable company sure is sneaky," and "This bundle of yours is costing us a fortune." Vonage, which reports a subscriber base of around 2.4 million, claims that approximately 70 percent of consumers could spend less in the event they removed their cable’s phone service and went with the company.

During a Q3 earnings release, Marc Lefar, Vonage CFO, noted, "We are pleased to report that we tripled quarterly net income from the same quarter last year, and for the fourth consecutive quarter generated EBITDA of at least $40 million. Our recently expanded distribution channels contributed to higher customer additions and increased acquisition efficiency. Although gross line additions increased, churn was slightly higher than expected due to the full year impact of the ‘no contract’ policy. We expect improvements over the next few months as we will no longer experience the churn spike customarily associated with contract expirations. We anticipate stable to lower churn in the fourth quarter.

"We are encouraged by customer response to our new mobile initiatives. Consumers are demonstrating a strong willingness to shift communications from landline calling to Vonage mobile applications. In addition, we are aggressively focused on international expansion and expect to announce our first partnership early next year."

A spokesperson with Vonage noted the company’s ads will navigate away from the company’s recent testimonial spots and go back instead to the company’s challenger upbringing. Along with a social media campaign to promote the ads, Vonage says it will also run the spots on such television outlets as the History Channel, Discovery and ESPN.

According to Lefar, “Vonage continues to believe in the attractiveness of the strategic markets it has identified as the foundation of its growth initiatives, including international long distance, mobile, and international expansion opportunities, and is continuing to invest in these areas. Although the company is encouraged by early results from product launches, distribution gains and international business development activities, revenues are ramping more slowly than originally anticipated. The revenue ramp from these initiatives is delayed by several months and is expected to more favorably impact results in 2012.”