Power without glory in utilities

It would be no surprise to find financial services, telecoms and utilities topping the wish-list of most thrusting young brand managers as the most desirable sectors to work in. For a start, they pay better. An experienced marketing director in telecoms or financial services can command a salary of over 120,000 a year. The equivalent in the traditional heartland of packaged goods would be hard put to earn three-quarters of that.

Salary packages reflect a broader reality: these upstart sectors are where the spending power lies nowadays. BT is currently the UK’s biggest advertiser; financial services account for an increasingly large chunk of the top 100 league table, and utilities are fast catching up.

Then again, the fact that they are not sectors with a classic marketing heritage presents a rewarding challenge for those interested in making their mark.

Or does it? Utilities are an interesting, if extreme, case in point. With deregulation in the air, there is certainly colossal potential for marketers to play a decisive role. And accordingly, the utilities are attracting high-profile players such as Jon Kinsey, ex-marketing director of Camelot, who recently quit to become marketing and strategy director at British Gas Trading.

But such pioneers are likely to find they are in for a rough ride. One problem is that a fully competitive market does not yet exist. Instead, a myriad of recently formed companies, mostly RECs-derived, are caught up in swiftly changing alliances to carve up what was, until recently, British Gas’s monopolistic domain. Next year, the kaleidoscope will rotate equally violently in the opposite direction, as the electricity market deregulates. This will put RECs on the defensive, pitting them against the ‘dual fuel’ operators – among whom British Gas will be a major player.

This hardly augurs well for the marketing departments of these companies, who are likely to find themselves confined to short-term expedients until the market settles down.

But the problem goes deeper than that. There is, to put it no more strongly, a suspicion that many of these companies are not, at heart, that interested in marketing. The market may be changing rapidly, but corporate culture rather less so. Until recently, the product of utilities was essentially a monopolistic commodity. Now competitive pricing has been thrown into the mix. Branding is still a pretty distant afterthought. To be sure, some companies like Centrica and London Electricity have shown marketing flair in their attempt to exploit databases for third-party marketing ventures. But until the Data Protection Registrar softens her stance, these initiatives will run into the sands.

The experience of Simon Esberger, one of the UK’s best known marketing directors, at Mercury and subsequently CWC, demonstrates that telecoms companies can provide an equally marketing-unfriendly environment.

Cover story, page 44; Esberger profile, page 42

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