EarthLink Hopes New Ad Campaign Will Net More DSL Users

There’s a rich vein of gold encased in the cables and telephone wires connecting home users to the Internet. For EarthLink Inc., the question is how best to mine its share of customers.

Before jump-starting its first brand-advertising campaign in January through the Los Angeles-based BBDO West advertising agency, the Pasadena-based Internet service provider relied almost exclusively on direct marketing to build membership to 2.8 million consumers. EarthLink’s consumer base since has grown to 3.7 million, and the company hopes to spur even more growth through an ad campaign breaking later this week that emphasizes its digital subscriber line, or DSL, service.

Although strong in California, EarthLink continues to lag national market leader America Online Inc., which has more than 23 million Internet subscribers. EarthLink also faces stiff competition from fast-growing free ISPs, including NetZero, which has 4 million members. EarthLink also competes against manufacturers that bundle computers with Internet access.

“When we did the [BBDO West] campaign, we had some success, and we decided we wanted to invest more in developing our brand,� said Brinton Young, EarthLink’s executive vice president of marketing and corporate strategy. “But we knew we needed to acquire more resources to do that.�

Those resources, Young said, now are on board. Claudia Caplan, an ad industry executive who worked on campaigns for BMW of North America and the Carl’s Jr. fast-food chain, joined EarthLink as vice president of brand marketing. BBDO West was replaced by TBWA/Chiat/Day, whose client list includes Taco Bell Inc., Levi Strauss & Co. and Nissan.

Chiat/Day’s first work for EarthLink will be the DSL ads. The Marina del Rey-based agency is developing a much-broader brand-advertising campaign to be introduced during the fourth quarter. Young acknowledges that EarthLink must build awareness in order to become a truly national ISP. “We’re one-sixth the size of the largest competitor,� Young said.

But Young said, “We’ve got a great service and a great story to tell . . . and we’ve got plenty of resources now . . . and a strategic relationship with Apple that will help.� Apple, which in January invested $200 million in EarthLink, “is a preeminent brand, so any association with it can only help our developing brand,� Young said.

EarthLink will spend about $60 million on advertising during 2000, but its total advertising and marketing budget, including direct marketing and free introductory Internet disks, will hit $500 million, the company said.