March 20, 1996

Advertising: At&T's New 'Rategate' Campaign


Remember Watergate? Those whose fading memories make it increasingly difficult to distinguish Woodward from Bernstein -- or were too young to grasp the significance of John Dean's oncological assessment of the Nixon presidency -- can get a refresher course at this point in time from a series of sophisticated advertisements for AT&T Corp.

The campaign, by McCann-Erickson New York, is aimed at business customers and includes television commercials, print advertisements and a site on the World Wide Web of the Internet ( All the ads use that term "Rategate," which in adopting the "gate" suffix from "Watergate" seek to evoke a Watergate-era sense of scandal.

In this latest instance of an advertiser appropriating elements of popular culture, AT&T is declaring the "Rategate" crime to be the purportedly overstated savings on long-distance calls promised by competitors that are smaller and less known than MCI or Sprint.

"Has your business been Rategated by the promise of big long distance savings over AT&T?" ask the print ads, which offer a toll-free telephone number to call "for a competitive price you can believe in."

To convince consumers that the savings claimed by AT&T's rivals are as evanescent as the 18 minutes missing from a crucial White House tape, the campaign features actors as journalists pursuing Truth with the same dogged determination as Bob Woodward (the neat one, played by Robert Redford in the film version of "All the President's Men") and Carl Bernstein (the messy one, played by Dustin Hoffman).

For instance, a television commercial shows a reporter in a parking garage for clandestine meetings with shadowy sources -- much as the mysterious source known only as Deep Throat met with Woodward. Those rendezvous are followed by a close-up of a banner headline, " 'Rategate Uncovered' " on a stack of newspapers.

"Customers are becoming increasingly confused by a barrage of conflicting price claims that don't allow them to make the kinds of informed decisions they want to," said David Robertson, advertising director for the business markets group at AT&T in Bridgewater, N.J. "We thought it would be in their best interest to expose what we see as a widespread practice."

The "gate" suffix "has become a kind of catch phrase for anything that just doesn't feel right," he added. "And the 'Rategate' campaign has tested exceedingly well with consumers, who found the concept engaging and said they found it gave them useful information."

Still, the campaign may be too erudite for someone who thinks Egil (Bud) Krogh is a character from a beer commercial. For example, in a second commercial, an actor portraying the anchor of a newscast is watching a mock news conference on a monitor in which an actor portraying a consumer advocate denigrates the "dramatic savings" offered by an AT&T rival.

The anchor, thinking she is off the air, mutters "They don't hold up." But an actor portraying the director of the newscast tells her she was still on and the anchor is embarrassed.

"On balance, I don't think the campaign will be effective," said Gary Stibel, a principal of the New England Consulting Group in Westport, Conn., because "it will go over most people's heads."

The Watergate and journalistic images represent "a subtle attempt at humor," he added, "that in my judgment will be missed by everyone except the copywriter."

Daniel Briere, president of Telechoice, a telecommunications consulting company in Verona, N.J., agreed. "AT&T is making me work to find out what the point is," he said. "I don't know too many small-business office managers who have that much time on their hands."

Robertson disputed those opinions, citing the tests among consumers that showed "they could understand the humor and parody."

And business customers "are sophisticated people, very demanding," he said. "When you communicate to them, you have to communicate in a style that reflects what they're bringing to" the ads.

Nina DiSesa, executive vice president and executive creative director at McCann New York -- the unit of the Interpublic Group of Companies that handles the portion of the AT&T account aimed at businesses -- said the campaign would even be appropriate for a "broad consumer" audience because Americans have become "very savvy through television and film" about the workings of politics and journalism.

"It would be nice if people remember there was a garage with Watergate," she added. "If not, it still works as a piece of theater."

Neither AT&T nor McCann New York will discuss the budget for the campaign, which has been running for a month. AT&T spent $607.2 million on all advertising last year, according to Competitive Media Reporting in New York, which tracks ad spending.

And Robertson and Ms. DiSesa were similarly mum about what would happen in future installments of "Rategate." Perhaps Watergate figures like John Ehrlichman and G. Gordon Liddy, who were featured in advertising for Dreyers Grand ice cream and Concha y Toro wines, could make cameo appearances.

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