Back to the future

BT is a classic example of a brand whose advertising was so iconic that its straplines passed into the nation’s consciousness and everyday vernacular. Bob Hoskins’ “It’s good to talk” and a string of ads starring Maureen Lipman ensured that while BT provided nearly 100% of telecoms for UK homes and businesses, the British public knew it.

Current management, however, seems to care somewhat less than its predecessors about the disciplines necessary to produce great advertising – if we are to believe inside sources, shocked at the changes to the marketing structure.

Last July, Marketing Week reported the scaling back of the marketing communications department from 80 roles to ten (MW July 13). Then last month an insider told Marketing Week the marketing communications team is to be scrapped altogether in a further restructure (MW December 21). Behind the moves is BT Retail chief operating officer John Petter.

One insider says: “BT says publicly that the action taken was due to over-staffing in certain departments, but the truth is that Petter’s team has long been too involved in direct marketing and advertising.

“While the marketing communications team, experts in these areas, delivered high-quality creative after working alongside specific agencies, Petter would then fiddle with the work and rewrite straplines. He’s a control freak who would often be seen with other senior management rewriting ads the day before the execution was shot, and more often than not, they would make a complete dog’s dinner of it.”

The source adds: “Senior management disregarding its team’s work is rife within BT culture – that’s a widely held view across the business.”

With BT advertising campaigns carrying such a high profile it was essential that the current campaign, created by Abbott Mead Vickers.BBDO starring Kris Marshall, was a success.

The source admits that the campaign’s current cut-through is about 20% and rising, but says: “Petter hated the Kris Marshall ads and wanted to kill them, but they’ve done very well.”

The most alarming aspect of the shelving of the marcoms department, according to two BT sources, is that there will no longer be a single point of contact between the company and agencies.

One source says: “Anyone from the customer acquisition and retention teams can now approach each agency whenever they feel like it. This means the work is produced under many different influences with nobody to act as an ambassador of clear communication and pull everything together. Marketing people are passionate about making great advertising, but the new environment we work in means there’s a danger of our message becoming less consistent.”

Another source says that the company is “discarding a team of people holding more than 40 years’ experience at BT and specifically in advertising, DM and online communications”.

A BT spokesman says the sources’ claims regarding the restructure are factually sound, but argues the complainants are blowing everything out of proportion and calls for some perspective. He says: “We have 2,000 people working across BT in some kind of marketing roles and this story concerns six people who must reapply to other roles at BT and can continue to produce high-profile marketing work.

“We have 17 million customers and are regularly one of the UK’s top ten spenders on advertising.”

However, in a busy telecoms market with ever more competitors in each sector, BT may be wise to stop fiddling with its vital marketing departments.

According to Enders Analysis, BT Group’s revenue growth for its second quarter to September 2006, continues to be positive but vulnerable, increasing year on year by 2.6%, down from 4.3% the previous quarter and from 17.3% a year ago.

The figures also show that the year-on-year increase in revenue of £74m was below £100m for the first time in six quarters, and only 25% of the increase in the peak third quarter of 2004/05. The analysts also predict that BT’s financial year, beginning April 2007, will be tough as broadband market growth drops and competition intensifies for local loop unbundling, where BT’s rivals take control of its landlines that run from phone exchanges to people’s homes.

There are positives to focus on, however. BT has successfully transformed its business from the days when it monopolised telephone provision. According to Mike Cansfield, head of telecoms strategy and practice at Ovum, BT’s residential market share has held up strongly against other cable TV providers and it has the second-largest share of broadband provision, behind NTL, with 24%. BT Vision, the company’s foray into the television market with a one-stop broadband and pay-per-view TV service, will gain full functionality this year and proves old media boundaries are finally dead.

Cansfield says: “VoIP technology will present problems for BT, as it will eventually mean consumers expect to pay nothing at all for calls, but BT has started offering specialist IT services to businesses in order to find a replacement for the core revenues being lost.”

But Cansfield warns that BT struggles in price sensitive markets, such as enterprise and business to business where its market share is relatively low. The old BT of telephone calls and line installation is long dead. The new BT is all about IT services, broadband, television and mobile services and at present the new advertising reflects that. If BT is to succeed in the new world where convergence is everything, it may need to regain its old emphasis on great advertising as a sure-fire way to communicate with consumers. •Data supplied by:The hunger for 24-hour news among increasingly tech-savvy consumers has altered the media landscape irrevocably – we are at a point of no return.

This was apparent as last year drew to a close. The appetite for information surrounding the murders in Ipswich was such that the Ipswich Evening Star produced 12 extra editions, ran up-to-the-minute stories online and produced a 16-page supplement. Extra editions sold out, Web traffic surged and the readership increased.

This is testament to the relationship local newspapers have with their audience, and the way in which people will turn to their local press for news and information in formats that work for them. For media owners prepared to adapt and develop alongside consumers, now is an exciting time – and the regional industry is a market leader.

Regional publishers are bringing their products to market through a growing array of media, formats and distribution methods in print and online. From free distribution of major daily newspapers in Manchester and Liverpool, to the launch of the London Lite and thelondonpaper, publishers are looking at new ways to invigorate their markets and give readers what works best for them. Let’s not forget, UK consumers don’t fall into one, homogeneous group. Through careful targeting and tailored, relevant content publishers can meet the needs of so many local variations.

When the Manchester Evening News announced last year that it was adopting a new distribution model, giving away the daily newspaper free in the city centre it was greeted with surprise and apprehension. But the move proved successful. It has enabled the newspaper to reach a broader demographic, particularly among the younger, affluent, commuter audience.

It has revolutionised the Manchester title and the newspaper’s weekday city centre distribution of 78,000 frees is 56% above the original target. Many readers are new, or readers of increased frequency, and they read the newspaper for an average of 26 minutes each issue (which has parity with the paid-for edition), 70% are 15 to 44 years old and 75% of readers are ABC1.

The Liverpool Daily Post adopted a part-paid, part-free distribution model – this time in a bid to increase penetration of the city’s business decision-makers above its previous 90% level. Over 4,000 copies of the newspaper are now made available in the city and along the waterfront, while another 2,000 are distributed to pedestrians. The move goes hand in hand with the introduction of new advertising packages, which enable advertisers to target an upmarket audience, with high disposable income, right across the age range.

Free papers have also made the news in the capital, with News International’s thelondonpaper battling head-on with Associated Newspapers’ London Lite. Both titles aim to increase penetration in the elusive younger market. The increased offering means people are able to choose the media they want at a time they want it, and ultimately this enables publishers to offer bigger audiences to advertisers.

But free editions aren’t the only innovation on the agenda. The distinction between morning and evening newspapers is diminishing as publishers seek to offer their titles to readers at the time that suits them best, to make the most of casual sales.

This means that many daily newspapers are bringing print times forward to ensure availability when people want to buy. Northcliffe’s Plymouth Herald, Trinity Mirror’s Coventry Telegraph and Newsquest’s Bolton News have all recently dropped the “Evening” from their titles in order to make the newspaper available earlier in the day.

Of course, distribution is not restricted to print. While newspapers remain the core product, publishers are using a range of media, from websites and podcasts, to local TV and radio, as well as supplements and niche publications. All these products make the most of the publisher’s in-depth local knowledge and the trusted newspaper brand, to provide news and information to people when and where they want it.

Those media likely to survive and flourish will be those that respond to the market. The regional press is not only reacting: it is innovating and leading the market. Distribution is key, and the focus is on providing the right product to carefully segmented targeted audiences at the right time, in the right way.