NEW MEDIA: SPOTLIGHT ON MMO2 - Mm02 gears up to woo public through rebranding exercise. The BT spin-off will need to learn from the mistakes of Cellnet, Alasdair Reid says

If early trading is anything to go by, BT's spin-off flotation of

mmO2 is going to be more successful than anyone could have predicted a

couple of months back. MmO2, which began trading officially on Monday,

is now the holding company for the BT division formerly known as BT

Cellnet. Stage one of its reinvention successfully concluded, the

company will gear up for a wholesale rebranding of its consumer

services.



From next spring, Cellnet's services will trade under the O2 banner and

this new brand name will also apply in the company's other European

markets - it has subsidiaries in Germany (previously Interkom), the

Netherlands (Telfort) and Ireland (Digifone). Rebranding will be backed

by a £150 million above-the-line advertising campaign, through the

BBDO network. And last week mmO2 also appointed Agency Republic to

manage the O2 brand across digital channels including the web, mobile

phones and interactive television.



This, in itself, is worthy of attention because this time around digital

advertising is to be fundamental to the rebranding campaign.



And we're being promised something a bit special and innovative from the

agency. Much is expected - and Agency Republic, which has a

long-standing relationship with the company (for instance, in its recent

work for its mobile internet portal business, Genie), will not

underestimate the nature of the task ahead.



This sort of thing is meat and drink to the cynics but you can't charge

mmO2 with lacking confidence or ambition. It's all about putting

wireless on track following the WAP debacle. Having failed to deliver

the third generation in mobile (the first was voice telephony, the

second was simple SMS texting, the third was meant to be full internet

access), it now plans to secure generation 2.5 (e-mail enabled devices

such as the Blackberry gizmo BT has been punting over the past couple of

months).



Cynics will argue that changing the brand name to the chemical symbol

denoting one of the constituent gasses in hot air won't change

anything.



And the heritage problem is complicated. It has to take its customers

into a brave new world so it can't distance itself entirely from the BT

Cellnet brand.



Will Harris, the vice-president of marketing of mmO2, says the heritage

issue is not as difficult as you'd think. "As long as you have something

substantial to give people, they will give you the benefit of the

doubt," he argues. "People aren't as cynical as the press - they want to

believe in new products. We can bring the BT Cellnet trust and

reliability with us and leave behind the bad things. People associate BT

Cellnet generally with mobile data services - they recognise that we're

miles ahead."



He also points out that lessons have been learned, especially where hype

is concerned. "There will be no grandiose claims. We will always keep in

mind that there are users who will not want more than SMS for the

foreseeable future. A modern consumer brand has maybe 15 consumer

segments, all of whom want to consume it in a different way."



Many in the digital advertising market wish mmO2 well, especially in its

self-proclaimed leadership role. Neil Wooding, the head of pervasive

technologies at futureOgilvy, says it might just work. "It's always a

challenge when people decide to change brands and you can see why they

might want to ditch the BT logo. The sorts of things they want to be

doing in the future can possibly only be achieved with an entirely new

brand - a shiny new logo if you like. If this is about positioning for

services for PDA phone devices, then they are probably aiming at the

right market - integrated devices will become more important."



And Wooding reckons there's a range of BT Cellnet mistakes that O2 must

learn from. "It's important they don't confuse the brand with any

particular technology. The brand has to be able to accommodate

technologies as they emerge. It all comes down to the relationship they

are able to forge with consumers. If all they are doing is putting on a

new facade, that could lead them into fresh difficulties."



But what of Agency Republic's role here? Is it really as instrumental as

they'd have us believe? Martin Brooks, the joint managing director,

says: "In the short term we are creating a brand online and then turning

it into something that consumers can interact with."



Tim Millar, a senior planner at Agency Republic, says the internet has a

huge part to play in delivering an understanding of what wireless can

deliver to consumers. He states: "If you look at telecom companies and

their brands generally, it has been a pretty immature sector in the way

it has treated consumers. There's been massive hyperbole about products

and technologies and they have never really acknowledged or done any

appraisal of the role of these technologies in people's lives. The

approach for a new generation of mobile brands must be realistic,

insightful and precise."



And we're also talking viral here. Harris says it could make a real

difference: "Agency Republic's viral work has been excellent. Five years

ago, we didn't have half the brand contacts we have now and the

additional points of contact are personal and interactive. Anyone can do

a great TV campaign but the challenge is getting the real detail right.

Genie has an awareness figure of something like 64 per cent among 18- to

24-year-olds yet it has only spent £1.2 million in two years.

There are other ways of building awareness."



Harris concludes: "Mobile telcos haven't been the best at viral

marketing - probably because in the past they've had massive budgets and

have always thought they could spend their way out of trouble. But

that's changing - we have to do it smarter and better."