Engage Targets Top Spot in Germany

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DUSSELDORF, Germany -- In the last 16 months Engage has opened offices in Hamburg, Dusseldorf, Frankfurt and Berlin and plans to open another in Munich before year-end.

It has also lined up premium clients that include BMW, Microsoft, Lycos and the German railroads.

"Our business in Germany is doing well. We may still be a start-up in our thinking and our approach, but we're well on our way in the German-speaking countries," said sales manager Carsten Verg at the Engage stand at the DIMA show held here last month.

"We're the only one-stop shop in Germany," said Alexander Ehrlich, Engage's country marketing manager for Germany, Austria and Switzerland. "No other company on this market offers our technology and all the other marketing aspects as well.

"For the first time in Europe and especially in Germany, Engage offers everything any company needs to get going. A small Web site can use our outsourcing services that begin with small marketing solutions.

"We don't turn down anybody -- from small start-ups to large clients like Daimler Chrysler, agency networks like Y&R and Austria Online, and BTB platforms in agriculture and pharmaceuticals," he said.

Nevertheless, Engage, like other firms, focuses on ad agencies and their clients, and on publishers that run most of Germany's major Web sites. Ehrlich explained that traditional magazine publishers such as Springer and Gruner + Jahr still dominate the online business.

"That's one reason the Web has developed more slowly in Germany than it has elsewhere, for example in the UK and France, not to mention the US," he said. Nevertheless, he believes the larger publishers are beginning to shift their thinking.

"Increasingly they are beginning to realize they can't do everything that needs doing online and that they need to hire service providers like us who offer the specialization they don't have and can't afford. More and more they are looking at their core business, and that helps us," Ehrlich said.

But, Ehrlich stressed, only as long as service providers respect and understand the culture in which they operate. "Our market is so completely different from the English and the American one," he said.

"We have to be present in every major city in order to win our clients' confidence. You can't service the whole country from Berlin, Hamburg or Frankfurt. It just doesn't work here. We need German support and service teams.

"That's a mistake many American and UK companies make when they try to do business here. You can't have support services in New York or London where people who don't speak German well try to solve customer problems."

In the UK, Verg said, "everything takes place in London. But we're more decentralized, and that's why we need a presence in every major German city."

Also, different cities are centers for different aspects of the business. Most agencies are in Dusseldorf, while media are located in Hamburg. Munich is a high-tech center, and Frankfurt is a transportation and money hub.

Berlin is the new capital and the largest city in Germany, with burgeoning online businesses, start-ups and incubators.

"Doing it here costs more," Ehrlich said, "but you have to do it. The German mentality is so different. Let me give you an example. A client presented a problem, which we solved quickly and everybody was happy with the outcome. But the client wanted to know how we had solved it. And that was something our American colleagues simply couldn't understand. It works, why do they want to know how? And this is where the culture comes in. It's more than just language."

The German market, Ehrlich said, is also a virgin opportunity with great growth potential, even if that potential has not been fulfilled yet. The UK, he noted, remains a far bigger online market.

Engage, he said, wants to seize the moment when competition is fragmented or nonexistent to become No. 1 in direct response marketing in Germany -- an area in which nobody is on top right now, not DoubleClick or 24/7.

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