Fortune Telling

MD, Haslimann Taylor and

Chairman of the PRCA in the Midlands

Recent figures from industry sources make optimistic reading for public relations practitioners. A Marketing Society report quotes 80 per cent of participants believing that PR will grow in importance over the next five years (47 per cent believed the same to be true for above-the-line advertising). The Communications Agencies Federation’s latest survey also puts PR into the ascent and, according to the PRCA, 65 per cent of consultancies are feeling more optimistic about their prospects going forward.

For PR to fulfil its potential, however, the industry must get its house in order and key issues for 2004, for me, are results, relationships and resource.

Thankfully, more and more clients now understand what PR can and can’t do, and appreciate the difference between good and bad practice.

The PRCA has been banging the quality drum for years and, with the arrival of the revised Consultancy Management Standard, clients have a tangible, easy way of identifying consultancies that will deliver.

The Midlands IPR and PRCA recently held a debate entitled Bridging the Gap, which explored the many issues facing in-house and consultancy practitioners. Despite some horror stories from both sides of the fence, there was a massive amount of common ground. There was a unanimous belief that the key to successful work lay in the relationship and (call me old-fashioned) I found this hugely reassuring. Both parties wanted relationships that were built on mutual respect and honesty. Proper briefs, feedback, clarity and, above all, chemistry were critical.

My third priority for 2004, and beyond, has to be resource. As an industry we have to invest in training if the next generation of practitioners are going to deliver and match the new standards that are now being set. We also have to be very selective about who we recruit. We need intelligent, talented graduates with drive, common sense and the ability to graft. If PR is to be taken seriously, we have to be as rigorous in recruitment as the traditional white-collar professions.

There is much cause for optimism as we start 2004. Thankfully, the industry is starting to polarise. Those desirable, rewarding clients, whom we are committed to work our proverbials off for, want results. They want consultancies that are willing and able to stand up and be counted and those that aren’t will get what they deserve.

DESIGN

Jonathan Sands

Chairman, Elmwood

Told you so.

This time last year I was asked by this very august organ what I thought the year 2003 would hold. I said “It was going to be a tough year and a time to manage cash flow and, more than ever before, to service your existing clients into the ground.” And so it came to pass.

2003 was a very tough year for most people in the design sector. It certainly was for me. I thought at the tender age of 42 I would be thinking of working a little less hard these days but last year I worked longer hours than ever before to navigate through some pretty treacherous waters. Fortunately, we had the sails down and managed to come though more or less intact. Unfortunately, not everyone was as lucky. We saw slashed budgets, tighter margins, redundancies and, ultimately, several business failures. Of course, I’m talking generally and I’m sure there will be people reading this (especially some start-ups) saying “Well, we had a great year”, and if you are, and if you did, fantastic, marvellous, great, well done ... b**tards! However, the numbers don’t lie and all industry figures say that last year we saw a further significant shrinkage in our industry, building on the trend of the last few years in general in terms of numbers employed and profit margins.

How I wish I had been wrong about 2003!

So what of 2004? Well, I think there are signs for a little optimism but ... don’t get carried away. I do think the worst is behind us but the growth curve will be fragile. Briefs are out there and, even better news, they are bigger and more significant than we have been used to seeing over the last 18 months or so. Why is this? I think there are a number of reasons. First, I think some clients too are feeling slightly more confident about the future and so are more encouraged to loosen the purse strings. Second, we have seen a number of client companies refocus and restructure over the last year or so and, as result, need to reposition or sharpen their message. Third, in this period of change we have seen “faces” come and go, and the new faces want to make their mark. And, finally, some companies have just been “running on empty”, that is, because they haven\'t been spending for some time their momentum has been lost and now they are in catch-up-or-die mode.

So what do we need to do to make 2004 better than 2003? All I can do is tell you what we plan to do and, in a word, that is “focus”. A few months ago, I went to a conference in Seville and, according to latest research, 200 per cent of a consultancy’s profit comes from 20 per cent of its clients. So the first message is clear ... don’t f**k up your star clients by over-servicing the fringe. Second, when you’re going for new business make sure you’re only chasing stuff you want to win. As I’ve said, the bigger briefs are now out there but every man and their dog is after them so focus on the ones that are “on brand” for you and are the ones that will add to your 20 per cent, not to the fringe. In most businesses we have now done all we can to manage our costs so the only thing we can now do is manage our time. If you’re pitching, make sure you are only pitching for work that will truly enhance your business. Otherwise, give that time to your existing core 20 per cent as this will always give you a better return. Finally continue to “drive your difference”. There is an over-capacity in our industry and that has led to the erosion of margins so, going forward, everyone needs to look for a purpose to compete beyond price. Doing good work will not be enough to survive. Make sure you have a unique point of view or true insight into a client’s business that no one else can give or find a new way of working that can add value to your brand. Think about charging by results rather than by time, that is, put your money where your mouth is. And, finally, work smarter, not harder, by having alliances with other businesses that add skills to your offer and vice versa rather than trying to do it all yourself.

2004 can be whatever you choose to make it. I hope we all make it a good year. Good luck and best wishes to you all and I hope once again this time next year I will be able to say ... “told you so.”

NEW MEDIA

Simon Davies

Head of Design, Fuse Digital

The new media industry as a whole has picked up the pace during 2003, with advertising spend doubling during the year, going from smaller than cinema to twice the size and is now half that of the radio industry and still on the rise.

Internet usage continues to grow, with 5,000 new users connecting every day and a further 5,000 upgrading to broadband. UK online sales are predicted to break the £2 billion mark this month and an estimated 500 million users will be online by 2005. Hopefully, 2004 will be the year that online finally becomes a channel that no advertiser will ignore.

2004 sees new legislation regarding one of the net’s most infuriating nuisances, spam. The “opt-out” e-mail lists currently available will no longer be legal but these new laws shouldn’t be an issue for any agency that takes care in doing the job properly. At Fuse we’ve always made a point of building our own lists through specific online activity and insisting visitors request further information rather than being tricked into surrendering their e-mail address. It stands to reason that a better quality database will lead to a more successful campaign. We’ve achieved response rates of up to 70 per cent for some of our clients. I’d be surprised if many purchased lists achieve 3 per cent. E-mail is an undeniably powerful channel but it’s important that the industry does something serious about spam and takes control to ensure it doesn’t become obsolete as a marketing channel.

During 2004 there will finally be a consolidation of formats for online advertising. The IAB (Interactive Advertising Bureau) has announced a set of more impactful (read bigger) sizes for pop-ups and banner advertising intended to make life easier for creatives and media planners but I’m not convinced this is the way forward. Irrelevant advertising is intrusive and simply frustrates consumers, adding to the growing amount of online clutter. Instead, I’d like to see more content-driven campaigns that tie in with supporting activity, using online to engage the audience and enabling them to interact with a brand, not just passively watching.

Broadband will create fantastic new opportunities for the creative industry as the accessibility and affordability of the service increase. I hope to see true integrated online campaigns during 2004 with TV ads no longer simply reformatted and repurposed for the Web. How about contextual advertising that reacts specifically to a user’s online profile or search topic? Get an online campaign relevant and it can reach new audiences at new times, at home and in the work place (during the lunch hour, of course). If a creative concept is good enough, it can become endorsed by the viewer and even passed on to peers at no cost to the client or agency. In 2004 I’d like to hear somebody say, “Have you seen that great ad on the Internet?”

DIRECT MARKETING

Neil Fox

Director, TDA

I think 2004 should herald a bullshit amnesty. Dump the lines, above, below, through, visible panty. In the age of thongs, does anyone really care about lines any more? Perhaps we should just get back to what we all do best – talking to customers about why they should buy products or services. That’s just marketing, isn’t it?

Neutrality: I read a recent CV that advertised an individual who was used to devising “solution-neutral” strategies for clients. That’s brilliant. I’m presuming it’s either where there isn’t a solution at all – or where every solution is as good as the next, because it doesn’t matter. In my (obviously antiquated) opinion, media neutrality is about providing objective, incisive, well-thought-through media strategies for the product. That’s kind of what we should be doing anyway, isn’t it?

CRM: if I wanted a relationship with my bank I’d have married it. But that’s not legal. If companies started realising that customers are loyal if they provide a great experience (that usually means giving them what they want, when they want it, in a way that makes them feel good), they’d worry a bit less about devising the systems equivalent of the Karma Sutra that they think might get them there. Apart from anything else, it all starts with culture, darling.

Brand responsive: what’s a brand when it isn’t responsive? OK, that’s a bit glib, but the recent work going on from UK research agencies to establish a consistent methodology for brand tracking irrespective of channel makes this look a little clumsy. Of course, channel usage depends on the consumption of the target audience and, in a world where sophisticated consumers regard the brand with one view, it stands to reason that all communications need to be brand responsive.

Online – direct marketing has a big future online and online is going “turbo” with more and more of the country getting broadband ... and what makes web ads perfect for direct marketing of course is the “track ability” (!) and ease of response. Coming “online” now are ad server systems, for example Bluestreak, that can make the tracking even more fine-tuned, with click-through data updated as little as every 15 minutes and the ability to automatically swap to creative that is “pulling” hardest and even serve ads with propositions tailored to the web page visitor. I’d really like to see clients, strategies and creatives that exploit these opportunities.

Where’s direct marketing heading in 2004?

Without question, it will be the need to engineer the information we have on customers and prospects to generate more relevant, more accessible, more attractive products. Getting cut-through at an individual level is becoming the major battleground for major brands, and those who have already demonstrated competence (not least some of the supermarkets) have shown how neatly this reflects on shareholder value. Reversing this information back into the brand position is perhaps the ultimate polarisation in marketing that is waiting to happen.

ADVERTISING

Ben Quigley

MD, Different

Another year, another dollar. It’s that time again when you try to get to grips with that most daunting of challenges – a list of predictions for the forthcoming year.

I can only look forward to 2004 with unbridled optimism, because all industry commentators and analysts are telling us that the advertising recession is officially “over”. Thank God! So this means it could be a year of unprecedented change, with major issues addressed ...

2004 will be the year when those accounts that have recently left the regions for London amid “consolidation” fever return, having woken up to the fact that they got more board-level attention and value for money from regional agencies.

2004 will be the year that the industry regulators ITC, ASA, RACC, IPR, and so on finally get their act together and provide a workable, consistent and integrated industry regulatory system, which takes account of the reality of cross-platform-integrated campaigns for both clients and agencies in the 21st century.

2004 will be the year when those clients (usually public sector) who currently get seven or more agencies to pitch for a £20,000 piece of business see the error of their ways, pay the agencies a nominal pitch fee and restrict the pitch list to a manageable and comparable set of accredited agencies, which are evaluated on a pre-agreed, like-for-like basis.

2004 will therefore also be the year when agencies don’t hand over their intellectual property rights for free at the pitch to secure the business.

2004 will be the year that BDH\\TBWA wins agency of the year at the Adline Agency Business Awards. Because they always do.

2004 will be the year when formally recognised industry qualifications for agency staff with continuing professional development become mandatory – raising the profile and standing of the industry.

2004 will be the year when a lot of agencies will talk about producing advertiser-funded TV content programming for clients, but only a few will actually do it. (A bit like last year.)

2004 will be the year of the integrated agency. Such companies will attract more share by making a discernible difference to clients’ business in terms of their thinking across different customer touch points, like the phone, internet, direct mail, e-mail or press and posters rather than traditional ad agencies’ reliance upon “standard” campaigns.

2004 will be the year when client spends reach an all-time-high, with adequate budgets provided to do the job required within agreed accountability and effectiveness parameters.

And, finally, 2004 will be the year hell freezes over.

MEDIA

Dave Lucas

MD, MediaVest

Christmas comes but once a year – and it’s strange that we choose now as the time to gaze into our crystal balls, sage-like and still hung over from another MPA marathon. Before we sink without trace into the frenzy of Christmas bashes, here’s what MediaVest thinks is in store for 2004.

One could be forgiven for thinking that the only thing worth discussing in the TV market is the ITV merger and CRR. The likelihood for advertisers is that CRR, while offering price protection, will restrict flexibility of investment, designed as it is to reflect ITV’s audience decline rather than the planning changes required to channel mix. And this comes at a time when commercial TV should be getting more interesting – not more restricted. 2004 should be a good year for commercial audiences – ITV will fight like hell to deliver strong audiences as it now really does go hand in hand with revenue, 5 is committed to spend more on programming and Channel 4 promises more peak-time dramas. But the real challenge in 2004 is for the market to embrace and understand how to use interactivity – Freeview is already in 2 million homes, Sky Plus is revolutionising digital satellite viewing – pressing the red button is now second nature to a new generation of viewers.

2004 will be another difficult year for the press sector; it’s unlikely that total press revenues will grow significantly – and this on the back of dramatic falls in the first half of 2003. The “tabloidisation” of the newspaper broadsheet market will continue, with the Guardian tempted into a compact size, and the Independent will take the plunge and go totally tabloid. Advertisers will be drawn towards the big sporting events (the Olympics and Euro 2004) fuelled by the success of the Rugby World Cup, and more advertisers will realise what MediaVest clients have known for some time – that sports editorial is a strong platform for targeting men. Consequently, there will be strong press support for these events.

There will be at least two women’s magazine launches in 2004 – possibly swelling the ranks of the celebrity sector – and one publisher may finally be brave enough to launch a sports-based TV listings title.

The challenge for radio in 2004 is to put a lid on the infighting over electronic measurement and instead focus on the rise of digital reception. Digital sets are reaching real affordability, and with chip miniaturisation increasingly opening up mobile phones as a volume reception channel – watch out for some real innovation here. As RAJAR continues to claim the diary system is still reliable in a digital age, caution is recommended as contractors start to include digital audiences in station numbers, making the likes of Kiss and Xfm a national (and more expensive) option. EMAP is about to make red button radio interactivity a reality through the Freeview platform – other contractors will watch with interest.

Watch out also for consolidation. Capital is the most obvious target as Clear Channel protesteth too much about its lack of interest!

To finish our digital theme – what about “tinternet”? With online penetration plateauing, ISPs will increase their efforts to migrate users to broadband while increasing user revenues with add-on services – just as Sky has ramped up spend per customer within pay TV. March will see the full rollout of the BT Yahoo product, and with it lots of broadband-specific content. As ISPs are now up selling existing broadband users to faster connections, expect to see a proliferation of such broadband-specific content.

So, for 2004, the message for advertisers is clear. Digitalise or die, interact or into oblivion. Up the (digital) revolution! As for us, we’re off down the virtual boozer!