2011 review: the year of the hack attack

So, that was 2011, the year when the threat of a hack attack moved out of the realms of the Hollywood blockbuster and into the boardroom; when many of the ‘not-so-young guns’ of the agency world called it a day and, when, according to some, direct and digital marketing came into its own.
Direct mail and email witnessed a resurgence but once again social media took centre stage. But with brands piling on to Facebook and Twitter quicker than we will all soon be piling on the pounds, questions are now being asked as to whether social media really is the marketing platform of the future…

Santander started the year as many would end it – being probed by the Information Commissioner’s Office (ICO) – after a claimed printer cock-up resulted in the company sending 35,000 bank statements to the wrong addresses. The financial giant wrote to customers to warn them about the blunder, but tried to play down potential security problems or a data breach.
The seasonal good news back then was that junk email volumes plummeted by 75% over the Christmas period; the bad news was that by the first week of January, they had returned with a vengeance, doubling volumes of spam in just 24 hours.
Even worse news for Sainsbury data expert James Stevenson, who was found guilty just before Christmas of scamming the supermarket chain out of nearly £75,000 worth of Nectar points. He was banged up for 20 months at sentencing in January, after using the supermarket giant’s computer systems to transfer the loyalty points to 18 false Nectar accounts he had set up.
Meanwhile, Chemistry’s long-awaited sell-off was sealed after its board of directors recommended shareholders accept a £14.45m cash offer from Publicis. The agency, whose clients include Orange, Unilever and Tesco, was first put up for sale over three years ago, and at one stage had two potential suitors – at the time, Publicis was understood be one of them.

The poor old Information Commissioner’s Office was branded “worse than incompetent” after dropping an investigation into why BT sent hundreds of unencrypted customer records via email, which were later leaked online.
This came despite the ICO urging people to keep their personal data secure after its survey revealed 96% of people do not trust brand owners with their details. The study also revealed that 80% of people are concerned about protecting their personal information online.
The wisdom of brand owners’ stampede into social media was also called into question when research claimed it drives just 3% of visits to retail sites. These days, you can count the number of brands which aren’t using social media on the fingers of one hand but, according to ForeSee Results’ Social Media Marketing Report, retailers are failing to use the channel effectively.
Meanwhile, in the ‘snail mail’ world, regulator Postcomm approved Royal Mail price increases on bulk mail – which were branded outrageous by direct marketing industry bosses – as well as lifting regulatory restrictions which it claimed would allow the postal operator to compete in the market.
Also in February, speculation that Chris Ward and Amanda Phillips were joining forces to launch a new agency proved correct, with the duo opening An Abundance. Former Proximity London chief executive Phillips and ex-Personal boss Ward have so far secured work from Royal Mail and Barnardos.

Three months after the blizzards which wrecked Royal Mail’s seasonal rush, the postal service was slammed for missing its delivery targets, even though posties had received a personal letter of thanks from David Cameron. Watchdog Consumer Focus said Royal Mail “cannot entirely blame the cold for these dismal results” and that the operator “must work harder”.
In agency land, Publicis Groupe opened its cheque-book once again to strengthen its direct and digital capabilities with the purchase of Kitcatt Nohr Alexander Shaw for an undisclosed sum. The deal was the second for the French-owned group in 2011 year, after its £14.45m purchase of Chemistry in February.
And WDMP executive creative director Gary Sharpen left the agency after three years to take on what he called “new challenges”. Sharpen joined WDMP in January 2008 as its first executive creative director with a brief to raise the agency’s creative profile.
Meanwhile, John Townshend finally revealed his start-up, joining forces with ex-COI chief Mark Lund and former Partners Andrews Aldridge planning director Kate Waters to launch the agency called Now.
March also saw the shape of things to come when Play.com, one of the largest online retailers of consumer goods, was hit by a major security breach, amid warnings to customers that their personal data had been compromised.

Following an arduous search, Iris Worldwide chairman Paul Bainsfair was appointed IPA director general, succeeding Hamish Pringle who stepped down at the end of July. Bainsfair, who eventually joined the agency trade body in June, began his career at Saatchi & Saatchi. He has also been non-executive chairman of Lean Mean Fighting Machine, president of TBWA Europe, director of Omnicom Europe, and co-founder and co-chairman of Bainsfair Sharkey Trott.
April also saw the start of Sony’s troubles, with a hack attack on Sony PlayStation’s Network and Sony Online Entertainment sparking fears of the world’s biggest data breach – potentially affecting more than 100 million credit card details.
The attack did not go unnoticed in Brussels, with Justice Minister Viviane Reding slamming the week-long delay in Sony telling customers about the breach, blasting “seven days is much too long”. The broadside followed widespread customer criticism of Sony, the threat of a class legal action in the US, a probe by the FBI and investigations by the Information Commissioners of the countries in which it operates.
Back in the UK, Mike Cullis left his role as Elvis managing partner after nearly seven years with the agency, to pursue what is known in the trade as “other interests”. Cullis, who was not directly replaced, followed co-founder and managing partner Craig Morgan in leaving the agency after its buyout.

Good news at last as UK businesses were reported to be the most frequent users of data analytics for marketing, sales and customer service. According to a global survey by Accenture, budget cuts are driving companies to squeeze every last penny out of their spend.
But just to provide balance, the Financial Services Report, commissioned by The REaD Group, claimed price comparison websites, such as Go Compare and Moneysupermarket, are among the least trusted when it comes to handling customer marketing data. Only credit card firms and lenders have a worse record.
To prove the point, Barclays Bank landed the dubious top slot in the UK data protection roll of shame, with the Information Commissioner’s Office receiving more legitimate complaints against it in 2010 than any of the other major banks or building societies, according to Which? Money.

By early summer, the Fundraising Standards Board had revealed that direct mail complaints to charities had soared by 90% in 2010 despite a 30% fall in mail volumes. The trade body, chaired by former DMA president Colin Lloyd, warned the third sector to whip its data into shape or face a further backlash.
Two former employees of UK mobile operator T-Mobile were forced to pay a total of £73,700 after stealing and selling customer data from the company in 2008. David Turley and Darren Hames pleaded guilty to offences under Section 55 of the Data Protection Act at Chester Crown Court.
Agency chiefs continued their musical chairs, with Engine hiring Nina Jasinski to the new role of chief marketing officer across the group, in a move that reunited her with Partners Andrews Aldridge co-founders Phil Andrews and Steve Aldridge.
Meanwhile, retail giant Tesco raided its agency to appoint EHS 4D group chief executive Matt Atkinson as group marketing and digital officer. Atkinson, known throughout the industry as the “ultimate suit”, reports to Tesco deputy chief executive and global chief marketing officer Tim Mason, who also runs the Fresh & Easy chain in the US.
And Archibald Ingall Stretton co-founder Stuart Archibald is now looking for a role which will allow him to divide his time between London and his native Sydney after he announcing he is to leave the agency at the end of the year. Archibald, a highly respected figure in the industry – and one of its more colourful characters – has spent the past three years spearheading a global expansion of AIS, backed by Havas Media.
Phil Nunn, one of the industry’s best respected media planners, joined DraftFCB London as its first head of planning communications. Nunn, who left his job as executive media director at the TBWA Group – where he was reunited with his friend Alan Fraser-Rush – started at DraftFCB in July.
In publishing, Centaur Media axed the print versions of two of its leading titles – New Media Age and Design Week – as well as slicing up Pitch, in a major shake-up which saw a raft of senior staff leave the company. NMA editor-in-chief Michael Nutley, who joined Centaur in 1990, and publisher Andy Oakes, both left the company. Design Week publisher Declan Gough, previously publisher of Precision Marketing, Design Week editor Lynda Relph-Knight, and Creative Review publisher Jessica McDermott – who have all been with Centaur over 20 years – were all made redundant.

Another month, another high profile exit. Data giant Acxiom parted company with European chief executive Stephen Whyte, who left without a job to go to. Whyte, formerly chief executive of McCann Erickson London, replaced Dave Allen, who is now managing director of international operations at Navigant Consulting. His remit spanned France, Germany, The Netherlands, Poland, Portugal and the UK.
The silly season kicked off early with the DM industry being forced to launch a robust defence following BBC One’s Panorama which claimed all direct mail – whether legitimate advertising or scam mail – was “evil”. Presented by reporter Tom Heap, better known as front-man of the pet-lovers’ show Animal 24:7, the programme started by bemoaning the “tsunami of junk mail”, which, it claimed, flooded UK letterboxes every day.
G2 business development director and iMeanwhile more agency bosses decided to call it a day. DM industry stalwart Dick Bloomfield left the agency to pursue “new opportunities” in the agency world. Bloomfield joined the agency – which rebranded as G2 from Joshua last year – in 2002 and worked for a number of chief executives including Peter Thompson, Mike Cornwell and Tim Hipperson.
And Tullo Marshall Warren co-founder and chief executive Chris Warren also quit to pursue “new opportunities”. Warren, along with Paul Tullo and Richard Marshall, launched the agency 25 years ago in 1986 and was the first of the founders to depart.

Direct mail’s ability to drive traffic online was given an August boost after a study by GI Insight revealed that nearly half – 47% – of UK consumers said that they are prompted to check out a website by something they have received in the post.
But the month was dominated by the summer riots. BlackBerry maker Research in Motion pledged to help the authorities to track down rioters using its free BBM messaging service to co-ordinate attacks in London and other cities, although Government plans to shut down social networking sites during civil unrest were scrapped. The public were divided on the move.
And the Retail Trust, the only charity dedicated to the UK’s 3 million shop workers, launched a twitter campaign, #highstheroes, to raise funds for retail staff and shopkeepers affected by the riots.
The days when the answer to any brand brief is “let’s build a Facebook page” appear numbered after research by Gartner claimed some consumers are beginning to suffer “social media fatigue” due to a lack of innovation and entertainment.
Meanwhile, Rapp group communications director Robert Mayes – the founding editor of Precision Marketing – left the agency after over 14 years to pursue “new opportunities”. He was part of a round of redundancies which also claimed the scalp of Rapp London chief executive Pete Mitchell.

Social networking sites were warned to tighten up their data security or risk being “red-faced”, after it was revealed just 15% of consumers would entrust their personal data to the likes of Facebook and Twitter. And, according to a separate study, just 14% of brands invest in monitoring tools to measure success and traction of their social media activity.
M&A activity contiuned at a pace when McCann Worldgroup bought independent direct marketing agency Meteorite and merged it with MRM London, to form MRM Meteorite. Meteorite chairman Hugh Bishop secured the top spot, triggering McCann boss Mike Cornwell’s exit.
Meanwhile, former DLG chief Jeremy Whitaker was been appointed by Lloyd James to spearhead the data company’s ambitious expansion plans.

Email marketing is proving to be far more resilient than the doom-mongers would have you believe, after a surge in popularity among consumers over the past 12 months. And brand owners delivered more bad news for the doom-mongers – direct mail is not only holding its own against digital channels, the vast majority of mailers believe the medium will actually grow this year.
In the end of an era, Carlson Marketing – the loyalty agency set up nearly 70 years ago – was rebranded Aimia as part of parent company Groupe Aeroplan plans to revamp the business.
Meanwhile, IBM confirmed what direct marketers have been saying for years: the future is bright; the future is data. And, with the vast majority of client marketers clueless about how to embrace it, the future could be even brighter for agencies and data experts.
Ofcom kicked off its governance of the postal sector with a controversial plan to give Royal Mail the power to set the price of business and bulk mail as well as first and some second class post. But the DMA fears the move, which still needs approval, could trigger a direct mail exodus.

More bad news looms as marketers will be banned from using the edited Electoral Register – even for data verification – within three years, if MPs sitting on the Select Committee for Political & Constitutional Reform get their way.
But it is not all bad, Facebook email, launched 12 months ago amid dire warnings that it would render obsolete millions of email marketing addresses and even kill-off Gmail, was branded a flop after being shunned by users. Emailvision analysis showed that Facebook email addresses account for fewer than 0.0015% of all permission emails – equivalent to just 1,300 per million – and a far cry from the prediction that half of online consumers would switch to an @facebook.com address.
Brussels chiefs unveiled plans to update European data protection laws early in the new year in a move which, according to one source, is likely to “wreak havoc” among the online powerhouses of social media and search.
Bad news for agencies pushing Facebook and Twitter as crucial to a brand’s strategy – they are simply wasting their time, as nearly two-thirds of UK consumers don’t want to engage with businesses on social media.
Meanwhile, the DM industry escaped unscathed from the BBC’s latest attempt to discredit direct mail – broadcast on That’s Britain – after the tables were turned on the actual programme, amid criticism that it was just ‘Daily Mail’ TV.

The award season kicked off with Bristol agency Indicia scooping the grand prix at this year’s DMA Awards – the first time an agency based outside London has won the top prize in years. The campaign was designed to break the online retailer Very.co.uk into the mum-and-baby market.
The former bosses of Media Square were accused of breaching their duty to shareholders following the buyout deal which saw them wipe out nearly £13m of debt and relaunch the business as MSQ Partners.
One final departure saw Partners Andrews Aldridge co-founder Phil Andrews follow his old friend Jon Ingall out of the DM agency world, more than 25 years since the duo first met at Evans Hunt Scott.
Meanwhile Royal Mail risked a PR and operational disaster following reports that thousands of its temporary Christmas staff have complained about not getting paid – with some even threatening walk-outs.
And finally, with Christmas shopping at its peak, online retailers were warned they could be missing out on millions of pounds worth of business by failing to follow the basic rules of email marketing – including following up cart abandonment and keeping in regular contact.

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