How will the proposed merger of America Online and CompuServe affect the market for Internet service providers?

How will the proposed merger of America Online and CompuServe

affect the market for Internet service providers?

From the consumer’s point of view, the big worry when companies are

bought out is that choice will be restricted, but with Internet content

spewing from every online orifice, there doesn’t seem to be much danger

that our options will be limited by an America Online takeover of


MSN and LineOne will be healthy, well-resourced service competitors and,

with more than 140 raw ISPs in the UK, there’s no shortage of access


Ironically, the people who have the most to lose are America Online’s

existing users.

In the US, in particular, the company is struggling to service its

existing subscriber base - it would do better to concentrate on keeping

those customers happy and reducing churn, rather than loading on another

3.2 million members.

Richard Longhurst

editor, .net

AOL’s and CompuServe’s claim to exclusive content has been leap-frogged

by media brands with their own sites.

If AOL can’t make a profit now, with nearly ten million subscribers,

advertising budgets will be pressed again to make mass online services


Internet service providers here won’t be affected yet. As in any other

market, consumers will choose between good and bad. The more relevant

battle for us comes with digital TV later this year. Agencies will have

to make brand communications work in that environment, leaping from PC

to TV and back. Now that’s an exciting brief.

Alastair Duncan

head of design

Ammirati Puris Lintas


Ultimately, Internet access is a commodity business. To justify a

premium, the provider must add value.

As future cashflows will be more dependent on leveraging the subscriber

database, the business strategy for providers is about building a user

base, and fast.

The Net access market will consolidate into fast, reliable providers,

value-added providers and proprietary online services.

AOL/CompuServe could dominate this last, and potentially most lucrative,


The merger would create a monolithic online service capable of surviving

Microsoft’s MSN onslaught and the entry of new telecoms/media


However, users demand high minimum levels of service and AOL’s recently

reported service deficiencies bode ill for such a consumer-driven


Peter Beech

head of interactive marketing, Leo Burnett


ISPs should never really have to compete with content brands - they

offer connections, not content. However, it can be difficult for

consumers to know which they are buying.

I think Internet service providers have more to fear from services such

as LineOne and the BBC’s up-and-coming project, which are both the

progeny of well-established brands.

LineOne already offers a content-only deal for those who have Internet

access, and I can’t see how other content providers are going to hold

out against that model.

I certainly don’t want to have to dial up several different services to

access their content - if I’ve got access at all, I expect access to


I’m not even sure that connectivity can ever be more than a commodity

market, so perhaps the AOLs of this world would do well to separate

their business bases into dial-up and content, and see which one dies


Robert Hamilton

technical director




CAM # 02:05:97

Are you in tune with youth? - The UK youth market is worth about

pounds 38 billion, and advertisers want to encourage the young to spend

their money. But how clued up are they? Jim Davies asks the questions (the

correct replies are shown in black





Photographs (omitted)

Alchemists abandoned their search for an elixir of youth many moons

ago. Advertisers, meanwhile, are still hunting for a formula that allows

them to communicate effectively with the lucrative youth market. A

little knowledge can be a dangerous thing; get one small detail wrong

and you’ve blown it. Image is all, and it has to be spot on.

Campaign asked a selection of ten clients, agency staff and media

specialists a sample of youth-oriented questions to find out just how

switched on they are. Were they in on the latest labels? Could they tell

their Spices apart? It was a spot test, so no advance research was

possible. On the whole, respondents fared creditably.

There was an underlying point to the whole exercise; that it pays to be

clued up. This is a notoriously competitive sector estimated to be worth

about pounds 38 billion in the UK. Research shows that the vast

proportion of this figure is spent on ’going out’, clothes, alcohol and


What money kids do lay their hands on is pure spending money, and

advertisers are keen to channel it in the direction of their particular


In recent years the ’youth’ market has become even more elusive. When

pushed, marketers settle on 15-24 as the most relevant age group, which

comprises some 7,246,000 people (12.3 per cent of the population).

Kirstine Burnett, editor of Informer Youth Monitor, a London research

outfit, says: ’When the teenager was ’born’ in the 50s, there were

distinct patterns of consumption. Now people stay younger for


Mark Whelan, director of the media consultancy, Ideas Exchange,


’The conception of what ’youth’ actually means is growing; 12- to

13-year-olds are increasingly mature, and there are sad people my age

(30) who still go to clubs regularly,’ he says.

Handy sub-cultural groupings (mods, rockers, punks and so on) are less

prevalent. ’Subcultures went into decline post-1988 after acid house,’

Mark Radcliffe, managing director of the research and planning

consultancy, Murmur, explains. ’Today’s kids tend to be more of a

collage of their own tastes than a member of a definable group.’ The

fact that the old order is crumbling doesn’t help either, according to

Whelan. ’Traditional values are constantly being questioned.

Royalty, the Government and the police have all been exposed by the

media,’ he says. ’People are having to make their own rules.’ Add to

these factors the unprecedented level of marketing literacy among the

target audience - media studies is one of the most popular degree

courses in the UK and new campaigns are regularly deconstructed on the

front pages of the national papers - and agencies really do have a tough

nut to crack.

So how do they avoid the pitfalls? ’The worst thing you can do is

produce ads that say ’hey, young person, this is for you’,’ Burnett

says. ’They know when something isn’t right and can spot a researched ad

a mile off.’

’You can’t just hold a mirror up to popular culture,’ Radcliffe


According to Informer Youth Monitor, the campaigns that seem to push the

right buttons are generally more subversive, humorous ones - Irn-Bru and

Diesel, for instance. Glossy US imports (with the notable exception of

Nike) tend to be the least successful. This is what one A-level student

from York had to say about the recent ’change the script’ Pepsi

campaign: ’It’s obviously written by someone really old who’s trying to

do something for someone young, and it doesn’t work.’

Quite so. When you consider that the over-50s market accounts for 75 per

cent of the personal wealth in the UK, it would appear advertisers are

putting a disproportionate amount of energy into research and campaigns

targeting the youth sector.

But there are less tangible, more selfish reasons for the area’s


’It’s sexy creatively,’ Jack Rosevear, media strategist at Michaelides

and Bednash, says. ’It’s an area in which you can push the boundaries.’

’Agencies like to have that sort of advertising on their reel,’ John

Wilkinson, creative communications director at New PHD, adds. ’They feel

it gives them credibility - ’hey, we’re a young, funky agency’. There’s

a filter-down effect; big boring brands often come to them when they

want to reappraise their image for something more youthful and

cutting-edge.’ And, stand up HHCL and Partners, occasionally agencies do

get it spot on. ’The only trouble is,’ says Murmur’s Radcliffe, ’for

every Tango, there are a hundred Sprites and 7-Ups.’

Campaign and Marketing are presenting the Youth Perspective 2 conference

at the Ministry of Sound, London SE1 on 21 May 1997. For tickets call

Tania Cassell on 0171-413 4486.

                          Mairi Clark, 22       Chris Parry, 48

                          Reporter, Campaign    Managing director



1 What is the current

number one in the

singles charts?

(week beginning

13 April)                 I Believe I Can

                          Fly by R Kelly         Oh God...I listened to

                                                 the charts this week.


2 Who plays Romeo in the

current film, Romeo

and Juliet?               Leonardo DiCaprio      Oh, no. You’re going to

                                                 catch me out on all

                                                 these. Pass

3 Who is Dr Mick?         The agony uncle

                          in Loaded              The guy at Loaded

4 What is Trip-Hop and

who are its main

exponents?                It’s dance music mixed

                          with hip-hop. The

                          Chemical Brothers,


                          Leftfield...           Hip-hop with a trippy

                                                 beat. Portishead are

                                                 good. Sneaking Pimps

                                                 (sic) may do a bit of


5 What is Diesel?         A clothing brand.

                          A very trendy

                          clothing brand         It’s fashion streetwear


6 How many teenagers

are there in the UK?      Five million           I’d say less than ten

                                                 and more than seven


7 Name all the

Simpson kids              Bart...I don’t know

                          any of the others.

                          I was going to say

                          Beavis and Butthead    I do watch it from time

                                                 to time...Lisa’s one of

                                                 the girls, Maggie’s the

                                                 other one

8 How much pocket money

does the average child

aged 11-13 receive

each week?                pounds 5...I don’t

                          know, it’s a long

                          time since I got

                          any pocket money       It’s more than you

                                                 think. I’ll guess

                                                 pounds 3.50 to pounds 4

9 Who owns the

Cartoon Network?          Turner Broadcasting    It comes from the


                                                 I’ll guess Time Warner

10 Name all five

Spice Girls      I get

                          extra for knowing

                          the nicknames?

                          Emma, Geri,

                          Mel B, Mel C           Mel B, Mel C, Ginger,

                                                 Emma and I think it’s


11 Which TV detectives

are played by

Gillian Anderson

and David Duchovny        Mulder and the other

                          one on the X Files.

                          Is it Fox? Foxy

                          Mulder or something    I’m not a big TV

                                                 watcher. Let me

                                        this the

                                                 X Files?

12 Name three alcopops    Hooch...Jesus, that

                          alcoholic Irn-Bru

                          one... Lemonhead       There’s Hooch. What’s

                                                 that Australian one...

                                                 Dog’s Bollocks...

                                                 something Dogs

13 What is Cream?         They organise...

                          not raves...

                          club nights up North   It’s a club isn’t it...

                                                 up North?

14 Which magazine has a

’position of the

fortnight’?               More!                  Would that be a girls’

                                                 mag or a lads’ thing?

                                                 Herb Garden?

                             Jack Rosevear, 23       Lucy Marsden, 31

                             Media strategist        Copywriter

                             Michaelides and         BST-BDDP


1 What is the current

number one in the

singles charts?

(week beginning 13 April)    R Kelly, a song from

                             Space Jam...I Believe

                             I Can Fly. I hate it     Hmm...I don’t

                                                      know. It was

                                                      something by the

                                                      Spice Girls but I

                                                      know it isn’t any


2 Who plays Romeo in the

current film, Romeo and

Juliet?                      Leonardo DiCaprio        I went to see it

                                                      last week. It’s

                                                      that DiCaprio


                                                      Leonardo DiCaprio

3 Who is Dr Mick?            He used to have a

                             case study in Loaded.

                             He looks like Lech

                             Walesa                   He’s the guy who

                                                      does the problem

                                                      page in Loaded

4 What is Trip-Hop and who

are its main exponents?      Umm...Tricky and

                             Portishead do that

                             kind of thing. The

                             Orb does too             No idea. I know

                                                      it’s something

                                                      to do with hip-hop

5 What is Diesel?            An Italian clothes

                             label and a shop

                             in Covent Garden         A jeans, well,

                                                      clothes label

6 How many teenagers

are there in the UK?         Ha, ha, ha...

                             everyone says

                             we’re no good

                             with figures here

                             ...four or five million  I don’t know

7 Name all the Simpson kids  Lisa,

                             there another? Oh yes,

                             the baby.

                             Lisa, Bart and Baby?

                                                      ...I don’t know

                                                      any others.

                                                      Homer’s the dad

8 How much pocket money

does the average child

aged 11-13 receive

each week?                   pounds 3.10              I’d say about

                                                      pounds 20...

                                                      pounds 15

9 Who owns the

Cartoon Network?             Is it Turner?            I don’t know

10 Name all five

Spice Girls                  Victoria, Emma,

                             Geri, Mel B

                             and Mel C.

                             That’s easy              Are there three

                                                      Geris? There’s

                                                      Victoria. I know

                                                      them by their


11 Which TV detectives are

played by Gillian

Anderson and

David Duchovny               Dana Scully and

                             Fox Mulder. But I

                             don’t know what

                             their badge

                             numbers are              Ohhh...the

                                                      X Files...Mulder

                                                      and Scully

12 Name three alcopops       Hooch. Can I have

                             three flavours of

                             Hooch? Coopers Cola.

                             Irn-Bru Whisky           Two Dogs...that

                                                      Smirnoff Mule


                                                      something to do

                                                      with lemons


13 What is Cream?            Cream is a

                             Liverpool club           A band

14 Which magazine has a

’position of the

fortnight’?                  More! But I’m not sure   Oh, I’ve seen it

                                             sister gets

                                                      it. It’s one of

                                                      those ones for

                                                      young girls.

                                                      Is it Sugar?

                         Mark Whelan,            John Harlow,

                         30 Director             28 Media director

                         Ideas Exchange          Rocket

1 What is the current

number one in the

singles charts?

(week beginning

13 April)                 R Kelly...I Can

                          Fly from Space Jam     Um...I would say R

                                                 Kelly, If I Could Fly

2 Who plays Romeo in

the current film,

Romeo and Juliet?         Leonardo DiCaprio      I know the bloke but

                                                 don’t know his name

3 Who is Dr Mick?         He’s from Loaded and

                          answers questions.

                          I’ve got warts on

                          my penis. I just

                          thought I’d tell you   The agony ’aunt’

                                                 in Loaded

4 What is Trip-Hop and

who are its main

exponents?                Trip-hop is a fusion

                          of hip-hop beats

                          and wailing indie

                          vocals. Portishead,

                          Moloko and Tricky      It’s a trippy version

                                                 of hip-hop...slightly

                                                 softer and mellower.

                                                 Tricky and Portishead

5 What is Diesel?         It’s a jeans/clothing

                          brand. Also used by

                          lorry drivers          A jeans brand...

                                                 as well as a petroleum


6 How many teenagers

are there in the UK?      About...are we

                          talking about 13-

                          to 19-year-olds?

                          I’d say six

                          to eight million       Oh God...can I think

                                                 about this? I know

                                                 this... call it

                                                 six million

7 Name all the Simpson

kids                      Bart, Lisa, Maggie     Um...we’ve got

                                                 Bart, Lisa and Maggie

8 How much pocket money

does the average child

aged 11-13 receive

each week?                Umm...about pounds 4   Ah-ha...male or

                                                 female? It makes a

                                                 difference...pounds 10

                                                 to pounds 15

9 Who owns the

Cartoon Network?          Ted Turner             Ted Turner

10 Name all five

Spice Girls               Mel B, Mel C,

                          Victoria, Emma

                          and our Geri           Mel B, Mel C,

                                                 Geri the ginger,

                                                 Victoria the posh

                                                 one and Emma the cutsie

11 Which TV detectives

are played by

Gillian Anderson

and David Duchovny        The most popular TV