THE BOARDROOM PLAYERS: BILL COCKBURN - BT is the UK’s top-spending brand and its group managing director wields a pounds 200 million ad budget. In return, Bill Cockburn expects his agencies to sweat heavily By Amanda Hall.

Bill Cockburn is the client to die for. As the boss of BT in the UK, he runs Britain’s biggest-spending brand, supports it with an underestimated pounds 200 million budget and dominates one of the most competitive industry sectors where success depends - probably more than anything else - on marketing.

Bill Cockburn is the client to die for. As the boss of BT in the

UK, he runs Britain’s biggest-spending brand, supports it with an

underestimated pounds 200 million budget and dominates one of the most

competitive industry sectors where success depends - probably more than

anything else - on marketing.



Without his say-so there would be no ’it’s good to talk’, no Zsa Zsa

Garbor and BT, no Ian McCaskill and BT, no ’embarrassing moments’

campaign with mating elephants, and Elvis’s rendition of Always on my

mind would not have made it back into the charts.



’I expect a lot of perspiration on our behalf,’ Cockburn says in a thick

Scottish accent and only a hint of a smile. ’I think we get it, yes, but

I think we can get more.’ Those doing most of the perspiring for him are

the staff of the Abbott Mead Vickers group. In all, eight agencies

handle above- and below-the-line business for BT, including work for its

Yellow Pages subsidiary and Cellnet, in which it holds a majority

stake.



Ownership of the prized BT ad accounts rests with AMV BBDO and has done

so since 1994. It comprises the bulk of BT’s consumer and business

advertising and last year alone was worth around pounds 100 million. In

April this year, AMV’s media agency, New PHD, won the task of handling

media buying across all BT’s campaigns. Partners BDDH and Leo Burnett

also work for the company.



Cockburn took on the top UK job at BT exactly a year ago following a

short and, by all accounts, unhappy stint as chief executive of W.

H.



Smith. His decision to join BT was not so much a new move as a return to

an old home; he had begun his career in 1961 at the Post Office which

then included BT among its businesses. When the two organisations split

in 1981, he stayed with the Post Office and rose up the ranks to become

chief executive, a job he held until 1995.



At BT, he faces two big challenges: how best to tackle competition and

how best to exploit the opportunities afforded by digital. ’The

challenge for BT is a marketing one,’ he says. ’It’s about stimulating

the market in which we have a major stake and convincing our customers

we have a really good offer. Advertising has to play a vital part in

that.’



Thanks to government liberalisation and a stringent regulator, there is

now more competition in the telecoms market than ever before. Cable

operators like Cable & Wireless Communications, and niche market

newcomers such as Colt Telecom and First Telecom, are all out to take a

slice of the BT pie.



At the same time, the arrival of digital technology means the previously

distinct worlds of telecoms, IT and broadcasting are converging. That

will bring opportunities - in the form of new and technically complex

products - but it will also bring threats from non-telecoms operators

muscling in on customers who, until now, have not known anything more

complicated than a single phone line and a quarterly bill with BT’s name

at the top.



By the time Cockburn arrived at BT, the company was already firmly

committed to the strategy of growing the overall market for telecoms on

the basis that while its share of calls would fall as new operators

emerged, revenues need not head in the same direction if it could get

its customers to use the phone more.



The first ’it’s good to talk’ ads starring Bob Hoskins appeared in 1994

and were originally given the go-ahead by Stafford Taylor, then managing

director of BT’s consumer division. At the time, the average BT customer

used the phone for eight minutes a day. Now that figure is up to 11

minutes a day. Every additional minute equates to an extra pounds 300

million of revenue a year. This, more than the most creative ad any

agency could devise, is what for him constitutes good advertising. ’Even

the most expensive ad would pale into insignificance in relation to the

leverage you get in growing your revenue base,’ he says.



The campaign may have increased usage substantially but Cockburn

believes there is room for a further hike. Hence the ’it’s good to talk’

strategy is on-going and sits alongside what he believes are the two

other roles for advertising. The first is the promotion of the BT brand

- not to raise awareness, because that is already about as high as you

could get - but, in the words of Tim Evans, the recently appointed head

of marketing communications at BT, to ’make BT desirable’. This means

trying to overcome the perception of BT as lumbering and old-fashioned.

And at the same time, to counter attacks from rivals who use BT as a

pricing benchmark and claim to be cheaper. Finally, Cockburn looks to

advertising for the more straightforward business of promoting specific

products like Call Waiting and ISDN.



That is what advertising is about at BT, he says, but when it comes to

buying agency services, it is all about ’sweat’, albeit intelligent

sweat. ’You’re buying a dedicated team. These guys breathe and think

and, hopefully, dream about you and perspire freely.



There’s always scope for perspiring a bit more.’



But life is poised to become ever more complex. British Interactive

Broadcasting - BT’s joint venture with BSkyB, Matsushita, the Japanese

electronics firm, and Midland Bank that will make interactive shopping

and banking front room realities - will launch next year.



Is BT running the risk of trying to do too much all at once? Can its

advertising really increase phone use, present the brand as a desirable

proposition, promote more complex telecoms/IT products and at the same

time ensure it has as much appeal to Grandma as it does to Teenage

Tracey and Businessman Bob? ’That is the creative challenge for the

likes of AMV,’ Cockburn says, and admits that the targeting of specific

customer groups ’needs working at’.



’The challenge is for them to join us as a partner in thinking

strategically about our business and not just responding to a commission

for an ad to meet narrow objectives. They have to be thinking as much

about my business as I am. We need to segment our customers much more so

we can say: here, you’ve got household and you’ve got business. But

within business you’ve got very large international businesses and small

businesses. Within household you’ve got senior citizens, maturing

families, teenagers, professionals, self-employed people. We need to

make sure the way BT presents itself to each segment is convincing and

relevant.’



However, some observers believe BT’s advertising needs a more radical

overhaul. They say it has become confused and that the effective

simplicity of ’it’s good to talk’ has been diluted by too many different

messages about products and offers. One source says: ’Four years ago

when ’it’s good to talk’ started, BT was single-minded. Every brief that

came in had to fall into that theme and TV was only used for the Hoskins

campaign.’ But this centralised approach has been gradually replaced by

a product-driven focus where budgets have been controlled by product

people, each driven by different objectives. ’It’s been a case of

everyone marketing for themselves,’ the commentator says.



However, change is afoot. As part of his attempt to focus on customer

segments, Cockburn is restructuring the UK business. On 1 October, a new

BT UK Markets division - which brings together all market segments for

voice, data services and products - will be born. It will have sales of

pounds 10 billion. Previously, the company operated separate consumer

and business divisions, each with its own marketing head. Now a single

marketing communications group will sit within UK Markets, devising

plans to market the different products to the different target

groups.



Afshin Mohebbi, formerly the marketing director of the business

division, has been promoted to head UK Markets. Cockburn hopes the move

will bring BT closer to its niche customer groups. He also anticipates

that he and Mohebbi will be keeping a lot closer to major campaigns from

now on. Centralising marketing should also allow him to cut costs. ’At

the moment, you need to be a member of Mensa to understand the totality

of our product range.



From now on we will be looking through our customers’ eyes into our rich

product base and piece together packages. For a professional family with

teenagers, for example, we could offer pagers, a Cellnet phone and extra

lines.’



Cockburn may only have been in his BT role a year but at W. H. Smith and

the Post Office he has seen a lot of advertising agencies come and go.

’There are probably more prima donnas per square inch in that field than

most others and they love to reward themselves,’ he jokes. But he

insists that the key to a successful relationship on both sides is going

beyond the client/supplier box. ’If you get to a position where you

regard your advertising agency as an absolutely critical partner going

forward, the chances are you might stick with them. If the agency

relationship is narrowly channelled through the marketing department -

although that should be the principal channel - it will be a

functionally managed relationship rather than a business-managed

relationship. Increasingly, the brand and the corporate reputation are

wider business issues.’



While he does not expect his agency team to be telecoms experts, he

wants to use them as a mirror in the market to help him devise the right

business strategy. He believes agencies should be more proactive in

thinking about their clients’ business and says too many clients

underestimate the leverage they have over ’a group of very intelligent,

able people who would probably give their eye teeth to be part of the

influencing factor’.



BT’s adspend is said to have tripled over the past three years. ’It’s

good to talk’ has certainly boosted revenues. BT’s performance in the

domestic market is crucial to the continued development of its parent;

it is the cash cow that will fuel international expansion. As UK chief,

Cockburn is under pressure from the BT board to go on growing the market

and pouring more revenue into BT’s coffers. His restructuring heralds a

new way of doing business; maybe now is also the moment for the next big

advertising idea to communicate that.



THE COCKBURN FILE



1997: Becomes group managing director of BT in the UK



1995: Appointed group chief executive of W. H. Smith



1989: Awarded a CBE for services to British industry



1981: Appointed to the Post Office board, later becomes chief

executive



1961: Joins Post Office in Glasgow from school



Other directorships: Non-executive director of Lex Services and

Centrica. Board member of Business in the Community



Main brands /agency /industry-estimated spend



BT consumer, AMV BBDO, pounds 50m



BT business, AMV BBDO, pounds 25m



Cellnet, AMV BBDO, pounds 15m



Yellow Pages, AMV BBDO, pounds 10m



Favourite campaign ’You are always on my mind’ ’Because it took Elvis

Presley from the grave to the top of the charts again!’



Business guru Jack Welch, chairman of General Electric, ’because his

stated principle is that every business he manages should be either

number one or two in its market and because of his focus on leadership’.



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