Close-Up: The Advocates - O2 finds marketing success with its 'ruthless execution'

Sally Cowdry, O2's marketing director, says that in these tougher times, the mobile operator has to wring every drop of value from its budget to ensure its customers can be rewarded.

At a time when recession-ravaged consumers suspect many big companies that throw one hand around their shoulder are picking their pocket with the other, O2 and its marketing director, Sally Cowdry, seem to have made a good fist of convincing customers that larceny isn't on the mobile giant's agenda.

Quite the reverse, in fact. For the past five years, it has worked hard at translating its "customer champion" philosophy from words into action with rewarding offers - including priority ticketing for gigs at the O2 arena - that may make people feel more predisposed towards the O2 brand even if they can't lighten the economic gloom. "It's just about linking people to things they love," Cowdry explains.

She even likes to see a small reward lurking in the company's advertising, as in the recent spoof wildlife film directed at pay-as-you-go customers and featuring rubber ducks journeying from the Arctic to the Amazon and finally to a pond in the UK. "The ads just make people smile," she adds.

Smiles aren't plentiful at the moment in the mobile sector, where the recession has spurred the creation of a mature market where revenues, in general (although not at O2, Cowdry insists), are expected to remain flat and the search for differentiation is relentless.

But how do you reconcile the positioning as a company that understands money is tight for almost everybody with the need for those same people to be driving your revenues?

Cowdry's answer has been to create a "virtuous circle" where a stream of initiatives ensures O2 not only remains the brand of choice but keeps the customer satisfied and revenues growing. What's more, she claims: "We didn't run a single campaign last year that talked only about prices."

It's all a world away from 2002 when O2, the new incarnation of the old BT Cellnet operation, wasn't only sustaining heavy losses but had emerged late in the day to take on established players such as Vodafone and Orange with new-generation technology that no-body was sure consumers wanted.

Fast-forward eight years and the one-time arriviste - now owned by the Spanish telecoms group Telefonica - is the UK market leader with a 25 per cent share.

The statistic is the upshot of a philosophy that was evolved to meet what once looked like an impossible challenge. "We knew that if we were going to take on the big players, we needed to understand what our customers wanted and to successfully deliver on that," Cowdry says.

"There's a lack of trust in all big corporations. People are struggling to find companies and brands they can believe in and help them stay in control of their lives."

Moreover, she adds, there are certain brands (O2 included, of course) that are successfully tapping into the mood of the country.

However, the altruism also had to be balanced by pragmatic considerations. "We were a standalone organisation at the time when we embarked on our strategy," she points out. "We had to prove to the City that we could deliver the numbers."

Indeed, the strategy wasn't able to evolve fully without some painful internal upheaval involving the axing of 500 management jobs so that the company could reinvest in staff who would deal directly with customers.

Unsurprisingly, O2 campaigns invariably embrace a wide range of communication vehicles, from TV and print to experiential and social media, where the company has been an early adopter. This month, it became the first brand to associate itself with the 3D movie trend by offering rugby fans the chance to watch England's Six Nations games at cinemas across the UK.

The company's £70 million annual marketing spend is split between VCCP (creative), Archibald Ingall Stretton (below the line) and ZenithOptimedia (media planning and buying), while its digital business (on which Agency Republic is the incumbent) is currently up for pitch.

While the budget may be less than that of its competitors, Cowdry argues that it is used effectively and in such a well-integrated way - "we call it ruthless execution" - that its rivals can't match.

"We try to spend our money incredibly smartly," Cowdry declares. "As marketers, that's very important to us personally. After all, this is our corner shop."

Does that mean a big role for the procurement people? "They help us get the right result," she says. "But while you can always get something done more cheaply, it isn't necessarily value for money. The final decision on an agency will always be marketing's call."

She's equally emphatic about not having roster agencies jockeying for position. "We want all of them working closely together," she says. "That's very important when an idea that came from below the line ends up on TV. And that won't happen if agencies are posturing and fearful that one is getting more business than another."

In the past few years, there has been a stream of initiatives, which, according to Cowdry, aren't only in tune with what its customers are thinking and feeling but have also taken O2 beyond its core mobile business. Hence the arrival of gizmos such as the O2 Joggler. Billed as "the new fridge door", the device is a digital photoframe that synchronises with a free online calendar in which appointments can be entered for members of the family.

Then there's GiffGaff, which was launched at the end of last year as a "people-powered mobile network" that rewards members for creating user-generated content.

Meanwhile, the O2 Money card enables users to load cash on to it and to receive text alerts telling them how much they've loaded, spent or withdrawn. Cowdry thinks such initiatives reflect the spirit of the times. "People want to know what they're spending and how much they can afford," she says.

And that, she contends, is just the same for companies such as O2: "Spending levels are never going back to what they were before. That's just as true for us as it is for our customers."


Humble beginnings in rail

Cowdry's decision to move from the travel trade to mobile telecoms wasn't such a big leap, she claims.

Indeed, she sees lots of similarities between the fast-moving, dynamic and heavy customer-focused fashions in which the two industries operate.

With a degree in business administration from Bath University, Cowdry did her first placement in the British Rail personnel department. "It wasn't my forte," she says.

Turning down cars for ships

Rover Cars, whose marketing department had her on placement, offered her a job "but I decided to keep my options open". She returned to her native Kent to join Stena Line, where she marketed its day-trip programme. "Remember The Sun's 'France for a pound'? That was me."

Back to the railway

Next stop was the British Airports Authority, where, as only the sixth employee of the about-to-be-launched Heathrow Express, she wrote the marketing strategy, appointed the agency and laid down the plans for the Heathrow check-in at Paddington.

The mobile market beckons

She joined BT Cellnet in 1999 as the pre-pay manager for the UK, becoming head of pre-pay and head of consumer marketing before taking on her current role in August 2006.