Trying to find a new line

Its fixed-line empire finally cracking, BT finds itself in search of a new role.

The company has reinvented itself, and its interests now range from business solutions to the internet and mobile phones. However, some observers contend that during the course of this transformation BT has lost its identity.

BT’s advertising has always been high profile, from Maureen Lipman as Beattie to Bob Hoskins telling us “It’s good to talk”. But critics think recent campaigns have failed to resonate with the public.

BT is now seeking a new “executional direction” for its advertising and is thought to be on the verge of giving the lion’s share of the work to either Abbott Mead Vickers.BBDO or St Luke’s, the two agencies left on BT’s roster after Fallon stepped down, citing “differences in opinion with regard to the way the new consumer campaign should be developed” (MW last week). There are growing whispers that this roster review is merely the precursor to a full-scale pitch for all of BT’s advertising business later this year.

No more hanging on the telephone One industry source says: “BT has become a much hungrier business and that has resulted in a very disparate creative strategy. That’s mainly because BT is involved in so many different things, but also partly because it uses so many different agencies.”

In line with this change, BT last year launched a &£26m global advertising campaign to promote its information communication technology (ICT) strategy (MW September 2, 2004). The latest stage of the campaign, created by St Luke’s, shows a computer-generated, futuristic cityscape representing what BT calls the “digital networked economy”. It was launched last month. The campaign carries the line “More power to you”, which has been used across BT’s advertising but is thought to be on the verge of being axed.

However, this increased focus on the changing face of BT has been effective, according to former BT director of marketing services Amanda Mackenzie, who is now European vice-president of marketing for Hewlett-Packard. She says: “You could say BT hasn’t had any memorable campaigns recently, but I would say that the work has been as effective, if not more so, than it ever was.”

BT’s latest results would appear to support this argument. Last month, the company announced its results for the year to March 31: group turnover was up by two per cent to &£18.6bn and pre-tax profit rose four per cent to &£2.1bn.

Significant growth is coming from BT’s developing areas. They are ICT – telecoms contracts for businesses and the public sector – broadband and mobile communications. Those three areas had sales of &£4.5bn and are growing at a combined rate of 32 per cent a year.

Fixed line, shifting sands Strategy Analytics senior analyst Martin Olausson says: “BT is starting to lose its grip. We are seeing this all across Europe with the old monopoly incumbents. They are at a crossroads and have to decide which way they want to go.”

Olausson adds that France Télécom, Telecom Italia and Deutsche Telekom are venturing into each other’s territories to compensate for their declining domestic market shares and that BT, as one of Europe’s largest players, must decide whether to do the same.

BT no doubt hopes that its re-entry into the mobile phone market will help to prop up its business. It was forced to demerge mmO2 in 2001, in order to appease shareholders, but has now teamed up with Vodafone to launch a “virtual” service called BT Mobile.

Later this month, BT is due to launch Bluephone, a service that enables consumers to use a single handset to make cheap calls at home over the internet and while on the move using the mobile network. Bluephone is part of BT’s “convergence” strategy.

According to Alice Enders of Enders Analysis, Bluephone means “BT will soon be able to assert itself as a technological leader in the UK. That will have a significant impact on its image.”

The move to develop a major new consumer campaign is being overseen by BT group marketing director Tim Evans. But according to insiders, John Petter, chief operating officer of BT Retail’s consumer division, is driving the initiative – and is fast becoming the voice of marketing at the company.

Petter reports to Gavin Patterson, group managing director of BT’s consumer and ventures division. The two have worked together before at Procter & Gamble and latterly at Telewest, where Patterson was managing director of Telewest Broadband’s consumer division and Petter was customer strategy director.

According to one industry source, BT is riven by internal problems, and “morale is at an all-time low as there is no leadership”.

There is also pressure from outside. In its strategic review of the telecoms market, Ofcom told BT it must make more operational changes to allow rivals access to exchanges so that they can compete on a level playing field. Failure to comply with Ofcom’s demands could see BT referred to the Competition Commission, which could enforce a separation of the company’s wholesale and consumer arms.

Although BT’s dominance of the telecoms market is waning, it has so far successfully repositioned itself by offering a multitude of new services. It now needs to find a fresh identity that sets it apart from rivals such as Telewest and NTL while appealing to both consumer and busi


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