British E-Marketers Upbeat Despite Slump

The British Internet sector is generally upbeat regarding the future of e-tailing and e-marketing in the United Kingdom, and a growing number of U.S. new-media firms are entering that market or expanding operations in it.

The industry acknowledges its problems but argues that the Nasdaq and dot-com meltdowns have not affected the UK online environment as much as it has affected U.S. Web companies.

“We're not picking low-hanging fruit the way we did last year,” said 24/7 Media account manager Phil Townsend. “You have to work much harder to get your advertising money and get in on the food chain much earlier.”

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

“If you don't, 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 executives who attended the annual British DM fair this month were more equivocal.

“This is still an emerging business,” DoubleClick's Helen Jacklin said, “and there will be more changes. But we have a strong business model, and as market leader we should be OK.

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

“We're a wide-ranging company that handles technology for big clients like Freeserve [a UK ISP] and advertising for all the big UK portals like LineOne, so we work both sides of the street. DoubleClick is becoming the standard for online advertising.”

Xpedite, another U.S.-based company, claimed it has not been affected by the dot-com downturn.

“Our clients tend to be bricks-and-clicks,” said sales account manager Jason Savage, “[including] people like Tesco, the retail chain, and Marks & Spencer.”

Smaller companies also report doing well. EC1 business development manager Mark Sowden said his firm had not been affected by the downturn and that tightening ad budgets had helped sales.

EC1 manufactures and sells business-card-size disks that can be put into any computer drive and act as an alternative to online ads by bringing messages to potential clients. It is much cheaper than banners.

“Our cards are used for presentations and are designed to drive traffic to Web sites and help client acquisitions,” Sowden said.

E2Communications Europe, a subsidiary of Plano, TX-based E2Communications, 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,” said E2Communications Europe senior consultant Neil Hannay.

He, too, sees opportunity rather than a threat in the slowdown.

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

Britons generally believe that e-marketing is just getting started in the UK and Europe and is sure to expand.

“The technology just hasn't been here that long,” said emedia-UK's new-media sales consultant, Stephen Weller.

His company publishes targeted e-mail bulletins that go to 150,000 subscribers across six markets, including information technology, telecoms and financial services. All subscribers are opt-in. Clients for which emedia dispatches bulletins range from IBM and Compaq to small software firms.

Sue Booth, major account manager at Phoenix Systems Management, said she was seeing “a lot of demand” from UK blue-chip companies that had shied away from the Web in the past.

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