Panero Honored With SN Award

Performance was the secret of success for Washington-based XM Satellite Radio [XMSR] CEO Hugh Panero and the other recipients of the inaugural Satellite News PR & Marketing Awards.

Panero won the award for “Communicator of the Year,” while his pioneering satellite radio company bagged the prize for “Best Print Advertising Campaign.” Germantown, Md.-based Hughes Network Systems matched the two awards by winning in the categories for “Best TV/Radio Advertising Campaign” and “Best New VSAT Product.”

In the highly competitive launch sector, International Launch Services (ILS) won the nod for “Best Launch Innovation of the Year.” Finally, one of the smallest companies, Bethesda, Md.-based market research firm Futron Corp., won one of the biggest honors for “Best Marketing Innovation of the Year.”

“More than any one person in the satellite radio industry in the United States, Hugh Panero is the single force responsible for the market’s incredible growth and consumer adoption,” according to XM’s letter of nomination for its CEO. “Hugh launched XM nationally a little more than 24 months ago and despite a terrorist attack, Wall Street meltdown, a hurricane and even a sniper, XM has emerged as the satellite radio leader and the fastest selling audio service in the past 20 years.”

The key for Panero is his credibility. He is part of an elite group of CEOs to head companies that have met or exceeded their guidance to Wall Street in every quarter since beginning service. Despite the daunting obstacles detailed in the XM letter of nomination, Panero stands out as someone who delivers what he promises.

In contrast, the high-risk satellite voice services that cost billions of dollars to build always seemed to fall short of their growth forecasts. Amid the financial wreckage of those ill-fated ventures, XM surfaced to take its own stab at becoming either a monumental success or another corporate catastrophe.

Much to the delight of satellite manufacturers, launchers and equipment manufacturers, XM has been a source of opportunity and growth. The company exhibited public relations common-sense by delaying its planned service introduction due to the Sept. 11, 2001, terrorist attacks, and it has shown little but unquestioned success in its public relations and marketing efforts to date.

Under Panero’s leadership, XM has reached 1 million subscribers in less than two years, compared to the 12 years it took cable TV, the 9 years required for online subscription services and the 5 years needed for home VCRs (video cassette recorders). Indeed, only DVD has reached the 1-million-subscriber level faster than XM.

Through Panero’s leadership, XM has “destroyed” two long-held myths, according to the nomination letter. One was that no one would ever pay for radio and the other was that radio has to be local. Panero has been the point man for the company to communicate its message to an array of powerful partners that include General Motors [GM], NASCAR, and CNN.

XM also was the clear winner in the print advertising campaign category for a landmark informational insert in Rolling Stone magazine. The campaign was aimed at XM’s core audience of music aficionados and involved a deliberate attempt to create a sense of community with those coveted consumers.

The effort included the participation of XM’s OEM (original equipment manufacturer) partner, Cadillac, to use a long format to tell XM’s unique story comprehensively. In detail, XM laid bare its music-loving soul for the rock world to see, sense and embrace.

Advertising short on words and long on imagery was mixed into the 34-page insert dominated with articles and features highlighting what XM offered. Numerous reminders also called attention to XM’s 1 million subscribers.

Cadillac seized on the opportunity to feature its OnStar Global Positioning System (GPS) service in a two-page spread that was part of the piece. Whether direct or subliminal, the message that XM was a peer of an elite car brand, such as Cadillac, was a conclusion that readers easily could draw.

The placement of the pullout section coincided with a “Special Collectors Issue” of the magazine that featured “The 500 Greatest Albums of All Time.” Clearly, XM wanted to reach fans of album rock with a message that would stay with them the way people remember lyrics from their favorite songs.

In the view of our judges, that mission was accomplished.

Hughes Network Systems showed the value of targeted radio advertisements in a campaign that it aimed at the federal government marketplace. The peak drive-time advertisements in the morning and afternoon featured its broadband satellite service, DirecWay.

The effort marked a new thrust for HNS, since the company previously had not attempted such a niche-oriented campaign to the federal market. HNS aired advertising on news radio channel, WTOP, and FederalNewsRadio.com to educate Washington decision-makers about the power of satellite broadband.

“Included in the script of both spots, was a call-to-action for listeners to download a white paper on satellite by visiting government.hns.com,” according to the HNS nomination letter. The response was 2,222 hits to the Web site and 640 copies downloaded between October 2003 when the campaign began and the first week of December 2003.

HNS seized the opportunity to reach out to the growing demand for satellite services from the U.S. Defense Department (DoD) and other key federal agencies. Two initiatives by HNS helped the company to snare an award for innovation in VSAT services.

First, HNS found a way to tap the rising popularity of Wi-Fi access. DirecWay unveiled a service to offer “pervasive coverage” across the continental United States for Wi-Fi customers. The company launched the first satellite-based Wi-Fi service in August 2003 and initially is targeting the national RV-park, resort and marina markets.

Second, HNS rode the other hot trend in telecommunications for its next innovation by offering what it claimed was the first integrated satellite VoIP solution. HNS enables voice service to take place over satellite in areas where comparable capabilities with terrestrial and Internet infrastructure is weak, non-existent or cost-prohibitive.

If imitation is the best form of flattery, International Launch Services (ILS) was a well-deserving winner in the category, “Best New Launch Industry Innovation.” ILS, the marketing arm of Lockheed Martin’s Atlas rocket and the Russian-made Proton, offers its customers “schedule assurance” by allowing each rocket to back up the other. If a failure sidelines one launch vehicle or the other, the second one can be used for missions.

The process of moving a satellite from one launch vehicle to another on the other side of the world has its challenges but has proven to be an effective marketing approach to win the confidence of customers, ILS officials said.

Boeing [BA], which launches the Delta family of launch vehicles, took similar action by providing mutual backup services for the Sea Launch joint venture. Boeing owns 40 percent of Sea Launch, while RSC-Energia of Moscow, Russia, holds 25 percent; Norway’s Aker Kvaerner has 20 percent; and SDO Yuzhnoye/PO Yuzhmash, of Dnepropetrovsk, Ukraine, retains 15 percent.

A similar arrangement was announced by France-based Arianespace to provide mutual backup with other launchers. “The ‘schedule assurance’ feature was instrumental in the positioning of ILS in the marketplace,” company officials said.

While the launch industry continued its tradition of fierce competition, Futron, the final winner of the 2003 Satellite News awards, earned its honor for reaching out to others. The company launched a “Friends of Futron” e-mail service to enhance its name, brand recognition and professional reputation as a leader in research and analysis.

An initial list of 500 recipients has grown to more than 2,000 as additional people in the satellite industry learn about the research-rich data e-mailed by Futron and request to receive it. The free service also can be obtained by signing up for it through the Internet with the click of a button. The cost of the campaign to Futron is less than $10,000 a year.

“The Friends of Futron concept is a creative way for a small company, such as Futron, to get exposure and advertising for minimal cost,” company officials said. –Paul Dykewicz