Thanks to Verizon (NYSE:VZ) and their successful "There's A Map For That" commercials, technology companies believing they have a distinct competitive edge, are feeling emboldened to follow their lead. And thanks to AT&T (NYSE:T), victims of this type of advertising are suing and counter-attacking. AT&T publically claimed the ads were "blatantly false and misleading," then filed a false advertising lawsuit. The company is now counter-attacking with their "Side by Side" commercials that compare the overall 3G experience with AT&T versus Verizon.
Did AT&T's legal strategy work? No, because a federal judge declined to file a restraining order against Verizon. They also lost in the court of public opinion. In court filings Verizon said, "AT&T did not file this lawsuit because Verizon's 'There's A Map For That' advertisements are untrue; AT&T sued because Verizon's ads are true and the truth hurts." I believe they wrote this because they knew it clearly reflected general public opinion.
A similar battle is now being waged in the sleepy Snorage Area Networking (SAN) market where Emulex (NYSE:ELX) is running their "Hot Enough to Fry an Egg" commercial. Following the AT&T playbook, QLogic (NASDAQ:QLGC) filed a lawsuit against Emulex and is counter-attacking with "What's the Secret Sauce for FCoE" ads.
Did QLogic's legal strategy work? It's too early to tell because the case has not gone to court yet, but thanks to publicity surrounding the lawsuit, the little noticed "Hot Enough to Fry and Egg" commercial has been viewed over 16,000 times.
My opinion is, like it or not, Verizon has set the precedent that attack ads are effective with consumers and hard to defend. Furthermore, right or wrong, lawsuits have proven to be a Public Relations disaster for the filing company. They serve mostly to drive large numbers of customers to the enemy's attack ad. Worst of all, investors have to watch as millions of dollars is wasted on suits that can't be won.
I'd like to know what you think about attack ad strategies and the ads themselves in an online survey (one lucky respondent is going to win an iPad). I also invite you to alert me about other skirmishes that are being fought in our industry with this type of advertising. I plan on publishing a follow-up article covering results of the survey along with an update on the battles being fought.
Disclosure: No positions