All change on the dot-com express

Some marketers who made the transition from offline to online businesses are ruing their mistake already. However, others are still finding the new environment liberating.

The resignation of former Thomson Travel Group managing director Richard Bowden-Doyle from online rail ticket booking service Thetrainline.com highlights the risk senior marketers run of coming off the rails as they enter dot-com land.

Rival travel agency Travelprice.com has seen the departure of top European marketer and former Grey France president Jacques Herbert, who is returning to Grey Interactive France. Online auctioneer QXL this weekend lost its marketing director Alex Czajkowski, who is believed to have jumped ship to a venture capitalist following reports the company may run out of money within a year.

The current consolidation in new media is starting to make marketers think twice about crossing the tracks from offline to online businesses – and some who have made the leap are realising that it may have been a mistake.

One senior industry source says: “Some marketers have got the move spectacularly wrong. I can’t believe what a mess they’re all making of it.”

Bowden-Doyle’s exit from his position as chief operating officer of Thetrainline.com after only four months was accompanied by a disarmingly frank statement from the former Thomson chief. He says: “This has been a very difficult decision for me. Thetrainline.com is a great business with tremendous potential for the future.

“However, I have found making the transition from a very large complex group to a small business much more difficult than I had anticipated. Coupled with the challenge of moving from being a number one to a number two, it has led me to consider that it is better for everyone if I acknowledge now that things are not going to work for me.”

Alan Meekings, chief executive at Thetrainline.com, adds pointedly: “In the short time Bowden-Doyle has been with us he has contributed significantly to our progress. Sadly, these things happen and I will continue to drive the business forward.”

One former colleague of Bowden-Doyle, who declines to be named, says: “He is an extremely talented manager. From what he has said, it sounds like a personality clash.”

Observers claim Thetrainline.com will struggle to survive when train operators begin to offer similar online services to their existing customers – something Bowden-Doyle may have considered before his resignation. One analyst says: “There’s a strong chance it is going to get squeezed out.”

But Trainline – which refused to make any comment – could argue that it has the advantage of being first into the market, and that it offers a centralised service compared with the fragmented offering of the train companies.

Bowden-Doyle and Meekings were both unavailable for further comment.

The number of marketers jumping ship from the old economy to the new has not slowed since the initial “gold rush” began around two years ago. But as dot-coms such as fashion e-tailer Boo.com and CD e-tailer Boxman have crumbled, some have discovered the new media El Dorado isn’t all it seemed.

BBC2 drama series Attachments depicts start-up companies as flimsy operations blowing money on expensive lifestyles and badly-run business models. The featured dot-com mirrors the mistakes made by Boo founders Kasja Leander and Ernst Malmsten, who were accused by former staff of being arrogant, poor communicators and frittering millions of pounds of seed funding away on champagne parties and business-class travel.

Other old-world marketers have not lasted long in the new ambience. Former News International marketers Ellis Watson (who was marketing director of The Sun) and Toby Constantine left to start up online information and news service Talkcast last year. But Watson quit his post as joint chief executive in July, citing personal reasons. The company has since called off a review of its advertising account, currently with Armando Testa.

Constantine is still at the company. Watson, who is currently freelancing as a consultant while he considers his options, says: “The good people who are available now have the option of going into the digital mess, but picking a proven business model where they can make the difference between it succeeding or failing.

“A lot of marketers joined dot-coms because of the money. I think that only one in seven who join digital businesses now will be happy with their decision in a couple of years.”

Some marketers are still living off the dot-com buzz. But even they recognise the risks involved in making the leap of faith.

Adrian Cox, a former marketing director at yellow fats giant St Ivel, joined search engine Askjeeves.co.uk in April as vice-president of marketing. Cox says he finds his new environment refreshing and liberating from a creative perspective.

But he adds: “I think when the whole industry underwent explosive growth, a lot of people came in on the basis of trying to pursue big bucks. The transformation to instant decision-making driven on intuition is a difficult one to make.

“A huge amount of moving is about being around different personalities. Some entrepreneurs believe everything they do is right and people can’t always fit in with their strong egos. There are some very headstrong and opinionated people who are hard to work with.”

Likewise, Andy McQueen, marketing director of financial news website TheStreet.co.uk, previously at Readers Digest, says he is happy with his lot – but knows dot-coms will not suit every marketer.

He says: “Speed to market still makes the Net a sexy medium and marketers are much more in the public’s face. But there is a perception that dot-com land is a volatile market, and although it has the capacity to attract the brightest people, some don’t like being under that pressure.”

Nicholas Shulman, former chairman of estate agent Anscombe & Ringland, and now chief executive of Spacetorent.com, says marketers forget that changes in Net advertising strategies have to be almost imperceptible – something many can’t come to terms with. He says: “Most online marketers face the danger of moving too far away from traditional marketing. Consumers are uncomfortable with that.”

David Johnson, a software and Internet analyst at investment research firm Beeson Gregory, told Marketing Week in May last year that many marketers were being lured online by pots of money, mainly in the form of stock options, which would accrue money as dot-coms went to float on the Stock Market. He says: “Now the huge excitement about the Net has died down, there is much less reason for someone high up in an established company to move across to an uncertain future.

“Companies have woken up to the competition and potential offered by the Net and are setting up spin-offs so people can move within their organisation, rather than leave. It’s easier for marketers to leverage established brands.”

Pepsi recently followed the trend by promoting European marketing director Simon Lowden to international e-marketing and media director, based in New York.

Investors are now far more wary about putting money behind major online ventures without seeing significant return. This can only make dot-coms less attractive to offline marketers who may have sought moves for access to the famed bottomless ad budgets. Luckily, it seems there are still plenty of jobs for them back in the real world. Their forays into dotcomland will be something they can recount to the grandchildren.

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