British E-Marketers Upbeat Despite Slump

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LONDON -- Exhibitors at the New Media show, which opened this week as part of the annual British DM show, were generally upbeat about the state of online business in the United Kingdom despite the Nasdaq and dot-com meltdowns.


24/7 Media was one exception. "We're not picking low-hanging fruit the way we did last year," account manager Phil Townsend said. "You have to work much harder to get your advertising pound [the UK currency] and get in on the food chain much earlier."


Ad agencies used to handle Web advertising, but now e-companies such as Townsend's need to talk to marketing managers directly and to educate them about the benefits of new media.


"If you don't [educate], all you get is the 5 percent of the ad budget a company has left over at the end of the year when you could get 20 percent by getting your message in early," Townsend said.


DoubleClick was more equivocal.


"This is still an emerging business, and there will be more changes," said a woman at the company's stand who asked not to have her name used. "But we have a strong business model, and as market leader we should be okay.


"We've been holding up pretty well and we haven't shrunk," she said. "The UK side of our business was designed in such a way that there is plenty of work for us."


Traffic at the show has been brisk, she said.


Xpedite -- a U.S.-based company that started in the UK eight years ago as a fax distribution company and has been in the e-mail marketing business for 18 months -- said it has not been affected by the dot-com downturn.


"Our clients tend to be bricks and clicks -- people like Tesco, the retail chain, and Marks & Spencer," sales account manager Jason Savage said. The UK office only handles Britain and operates out of York, a center for technical services.


Smaller companies also report doing well. Mark Sowden, business development manager at EC1, said the downturn has not affected his firm. In fact, it has helped business, he said.


EC1 manufactures and sells business-card-sized computer disks containing ads that act as an alternative to online ads.


"Our cards are used for presentations and are designed to drive traffic to Web sites and help client acquisitions," Sowden said. "Our clients include Barclay's Bank, HSBC, MTV and the Sainsbury retail chain, one of Britain's largest."


The firm is owned by a British holding company, which also has set up offices in New York and Denmark.


More foreign e-business companies are setting up in the UK and are exhibiting in London for the first time. E-Mail Vision, a French company, set up a full-service e-mail bureau here six months ago.


"We find that the e-mail market in Europe is still in its infancy and at least a couple of years behind the U.S., so we needed to educate the market first," account manager Alastair Greenwood said.


Greenwood said his company did not deal much with pure dot-coms and has landed major online and offline firms in France such as Oreal and MTV.


Adtech, the European subsidiary of AdForce, plans to open offices in London in April and had a stand here to announce its presence. The company, which does business in 10 countries, is headquartered in Frankfurt, Germany, and now has offices in Spain, Germany and the UK.


"We already have seven or eight British clients, so we should hit the ground running," spokesman Dirk Freytag said.


E2 Communications Europe is a subsidiary of e2 Communications, Plano, TX, and has been here since early 1998. It operates opt-in permission-based e-mail services for clients such as beer-maker Whitbread, British Telecom, Virgin Net, Freemans, IPC and Johnson & Johnson.


"We enable our clients to acquire, track, target and retain customers through sophisticated e-mail-based communications," senior consultant Neil Hannay said.


He, too, sees a slowdown as an opportunity rather than a threat.


"It costs so little to send e-mails that they become very attractive in times of tighter budgeting," he said.


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