Pioneer Electronics faces a tough battle against more established brands as it prepares a fall campaign for its plasma-screen televisions, but it might be diving deeper into the category at exactly the right time, according to industry analysts.
Pioneer selected Rubin Postaer and Associates late last month to handle advertising for its home-entertainment division. Billings have been around $8 million for that division, but they could grow to $12 million as Pioneer looks to increase its focus on plasma TVs, sources said.
Officials at Long Beach, Calif.-based Pioneer did not return calls. RPA declined comment.
According to a source, the Santa Monica, Calif., shop is charged with increasing awareness of Pioneer's plasma TVs. "A big part of the assignment is to get them on the TV list in people's minds," the source said. "They're putting a tremendous amount of resources behind that category."
The assignment doesn't figure to be an easy one, as Pioneer is better known for its home and car audio, said one industry watcher.
"Pioneer has a strong brand in home entertainment, but not necessarily in TV sets," said Paul Semenza, a San Jose, Calif.-based executive vice president for research firm iSuppli/ Stanford Resources in El Segundo, Calif. "The challenge is to extend brand recognition for that category. If you look at who has created the buzz for plasma TVs, it's been Sony and Philips."
The field is also getting more crowded, with companies such as Gateway now marketing plasma TVs. "[Gateway is] selling them online and through their stores," Semenza said. "They came in at a very aggressive price, and they [advertise] a lot."
The growing competition comes as TV manufacturers increase efforts to incorporate high-definition-television-capable tuners in their sets, a transition that the Federal Communications Commission has mandated must take place for all TVs by 2007. Most plasma TVs are HDTV-compatible.
"If there's a time to make a go at a new space, now is it," said Ryan Jones, an analyst at The Yankee Group in Boston. "We're on the verge of very rapid growth in the high-definition-television space. Putting a campaign out right now is when [advertisers will] get the most benefits from it."
According to the Consumer Electronics Association, U.S. sales of plasma TVs totaled $515 million in 2002 and are expected to reach $701 million in 2003.
Jones noted that while 70 percent of U.S. households are aware of high-definition television, only 5-9 percent say they are ready to make a purchase this year. "High definition isn't quite a mass-media thing yet," Jones said. "I think this is the year it will becomes that."
RPA beat out the team of WPP's Krueger in Torrance, Calif., and Mediaedge:cia in Irvine, Calif., in the final round of the review. The incumbent, Omnicom's BBDO West in Los Angeles and San Francisco, had been a semifinalist, along with independent DGWB in Santa Ana, Calif.
BBDO, which has worked with Pioneer for more than 12 years, continues to handle advertising for the client's mobile audio division.