INTERACTIVE: BEHIND THE HYPE/US NEW-MEDIA SALES HOUSES: The US giants making moves on the UK’s new-media scene - Will the new-media outfits setting up over here help or hinder our local sales houses?

By RICHARD COOK, campaignlive.co.uk, Friday, 14 November 1997 12:00AM

The last time it happened they came with two main weapons. It’s pretty much the same this time around. During the Second World War, the Americans, bearing chewing gum and nylons, made the local competition look parochial and unglamorous. This time it’s America’s vaunted new-media giants that are setting out to put one over on the local talent. Their weapons might be more sophisticated this time around - strategic know-how and superior systems for starters - but in the end they could be just as effective.

The last time it happened they came with two main weapons. It’s

pretty much the same this time around. During the Second World War, the

Americans, bearing chewing gum and nylons, made the local competition

look parochial and unglamorous. This time it’s America’s vaunted

new-media giants that are setting out to put one over on the local

talent. Their weapons might be more sophisticated this time around -

strategic know-how and superior systems for starters - but in the end

they could be just as effective.



DoubleClick has become the latest of the US new-media giants to set

itself up for business on this side of the pond. Having looked long and

hard at the prospect of a joint venture or acquisition, the company has

decided to start out in London the hard way - from scratch - and has

recruited the Network’s Andy Mitchell to head a seven-strong team.



For DoubleClick, it’s an important stage in its drive to establish a

true global presence - it will have offices in ten countries by the end

of the year. However, the company isn’t quite starting from scratch.



’At the moment, we generate around 35 per cent of our traffic from

non-US users,’ Barry Salzman, DoubleClick’s vice-president,

international, explains. ’This includes - even before we set up here -

around 12 million impressions a month in the UK market. In fact, the

sites we represent already generate three times the number of

impressions that even a popular site like the Telegraph can offer.’



This is the first element of the US new-media double whammy - size

DoubleClick only represents around 75 Websites but in the US it doesn’t

bother with Web publishers that generate anything much less than one

million impressions a month. And even allowing for the fact that there

may be a temptation for ad networks, shall we say, to over-deliver

impressions, it’s still an impressive set of figures.



Real Media, another of the US giants to open over here, can summon up

equally impressive numbers. It has a network of more than 450 online

newspaper sites, covering 45 of the top 50 dominant marketing areas in

the US, including most of the country’s major newspaper publishers.



’The UK market isn’t yet at the sort of level to justify the investment

we and others are making,’ Salzman concedes , ’but it will be. I don’t

know if it will happen in six months, a year or whenever. But I do know

that the UK growth curve will be exponentially steeper than in the US

because the players over here are all learning and have all learned from

the mistakes made in the US.



’We think the whole market will grow but we also think the current

balance of power - where most of the sales opportunities are aligned to

the content owner - is likely to change. The existing system seems to be

a conflict of interest, which should be of benefit to independents like

ourselves.’



The UK sales houses, on the other hand, have responded to the invasion

with rather better grace, thinking that the entrants will help the

medium develop.



’Both Real Media and DoubleClick are well established and professional

new-media sales houses and, as such, we welcome them into the market,’

Carol Dukes, joint managing director of Emap Internet Sales, says.

’There will, of course, be competition in the market and I’d rather it

came from professionals who will help educate the market properly and

who will maintain sensible rates, than from more casual operators who

could spoil the market in this important early stage.’



But it isn’t just their size and independence that the US players

believe will give them the edge. DoubleClick claims to have stolen a

march on rivals this side of the Atlantic by developing software that

enables it to identify Web browsers by country of origin, and not rely

on the domain extension name alone. ’We will have the means to tell

advertisers that their message is going just to a UK audience,’ Salzman

says. ’Sales houses that can’t offer that could waste up to 30 per cent

of the advertiser’s budget.’



So is it the case that the US sales houses really are not just bigger,

but better? Perhaps understandably, Dukes believes not. ’The Americans

aren’t really bringing anything new to the UK,’ she maintains. ’In terms

of technology, we at Emap are already using the Accipiter banner server

system which is used by many of the major US companies, such as ZDNet

and c/net, and which has just been chosen by Microsoft to use on all its

sites worldwide. Many other UK-based new-media sales operations are

already using leading US technologies, such as NetGravity, anyway.’



What isn’t disputed is the fact that this type of incursion is likely to

help sharpen the market overall. The global focus these companies bring

to the market is clearly only going to grow in importance - after all,

the absence of national boundaries is the Net’s real usp.



’I think what we are all going to learn from the Americans is not really

the technological stuff - and certainly not the creative stuff at which

I think we lead the way - it’s in the experience they have had in

generating strategic input with their clients,’ the managing director of

Online Magic, Eamonn Wilmott, believes.



His company has operated a New York office since 1994 and cemented its

international ties when the US giant, Agency.com, took a substantial

shareholding earlier this year. ’They had a lot more experience at

developing Web strategy and that is increasingly the skill new-media

clients will be looking for,’ Wilmott says.



This article was first published on campaignlive.co.uk

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