2012 review: when DM got smarter

So that was 2012, when – after plenty of false dawns – the year of the mobile actually came to fruition. Digital marketing continued its stampede into every marketing department in the country but with smartphone penetration reaching 60% of the population, 2012 could just be the start with many more years of the mobile to come.
It was also a time when the industry joined forces with government to combat the threat of new EU data legislation. Gone are the days when ministers baulked at the very mention of direct marketing; with Cameron & Co seeing a potential £47bn hole in the UK economy from the proposals, the DMA suddenly started being heard in the corridors of Westminster.
The year was also tinged with sadness, however, with many of the industry’s key figures – including Derek Holder, George Smith, Shelagh Regester and Andy Carolan – passing away. The DM world will not be quite the same without them…

JANUARY
The DMA’s newly installed chairman Scott Logie kicked off the New Year by using his inauguration speech to outline a “quadruple whammy” of threats for the 12 months ahead. Chief among them was the EU Data Protection Directive, which would go on to dominate the headlines for most of the year, but the cookies law, postal regulation and the environment were also top of his agenda.
Tesco revealed it had its own problems, after admitting it had had its worst Christmas sales for a decade. Chief executive Phil Clarke pledged to fight back, although he conceded that some of Tesco’s weak performance was due to its “Big Price Drop” campaign in September.
In agency-land, Karma Communications’ bought the Crayon group, in a move which it was claimed would create a “vibrant new integrated business”. Formerly Hicklin Slade, the agency was set up 1998, but rebranded when it bought Crayon in 2009. It now works closely with Karmarama on integrated campaigns.
Over in Brussels, EU justice minister Viviane Reding was accused of holding a “Sword of Damocles” over business, after finally unveiling the first major shake-up of data protection laws for 15 years. The proposals, first leaked at the end of last year and now revised, formed the EU Data Protection Directive. Designed to bring data legislation in line with the Internet age, many of the proposals – including a potential opt-in for all marketing, the 24-hour data breach notification and the right to be forgotten – raised serious concerns.
They brought a swift response from the UK Information Commissioner Christopher Graham, who claimed they had been poorly thought out and did not reflect the realities of data protection.
TNT Post unveiled plans to roll out its own delivery service for bulk and direct mail, going head to head with Royal Mail’s ‘final mile’ service for the first time. Chief executive Nick Wells said the scheme, which had already been on trial in Liverpool, would be expanded to other urban centres.
Meanwhile, the industry paid tribute to WWAV co-founder Rinalda Ward – one of the leading figures in the formation of today’s business – who passed away after a lengthy illness. While at WWAV (now Rapp), she helped to establish the china collectables company Compton & Woodhouse. Rinalda continued to run Compton’s as managing director until she retired in April 2008.

FEBRUARY
The month kicked off with news that HMV group head of CRM Matt Button had left the beleaguered music and entertainment retailer after three and a half years.
A well-known figure in the DM industry, he was instrumental in the roll out of the company’s insight and loyalty programme PureHMV (now rebranded MyHMV). Button would eventually remerge at Underwired.
Anyone suffering from the February blues would have realised that at least they weren’t alone. A study revealed the media industry to be full of brow-beaten, disloyal and poorly performing staff led by uncaring and disgruntled chiefs, unwilling to train up the next generation – and that is just what the bosses think.
The independent survey, conducted for headhunters The Lighthouse Company by Work Research, quizzed senior executives across the media industry – from agencies to media owners – about the state of the business. It was certainly a far cry from a report published by Mars UK in January which claimed marketers were “the happiest UK office workers”.
Later in the month, one of the reasons came to light, after a separate study revealed that half of all media and marketing professionals work an extra 32 hours a month unpaid. According to the TUC study, the longer staff have worked for a company, the more likely they are to toil away for nothing. But the analysis revealed a sharp age disparity, with the likelihood of workers in their early 60s doing unpaid overtime increasing by 45%.
Professor Derek Holder, one of the most influential people in the industry and the man who inspired generations of direct marketers. In 1987, he co-founded the Institute of Direct Marketing, creating the IDM Diploma in Direct Marketing – a qualification which is viewed as a ‘must-have’ for anyone in the industry, whether client, agency or supplier side. Top names from the industry – including Terry Hunt, Drayton Bird, John Watson, Simon Hall and Stuart Archibald – paid tribute to a “true visionary”. The IDM also set up a Facebook page for Derek, where people can still leave their own tributes. The organisation would eventually appoint former agency chief Mike Cornwell to succeed Holder.
Meanwhile, Ofcom defended its plans to allow Royal Mail to make massive price hikes to a group of MPs, denying that consumers – not businesses – would take the brunt of the increases to shore up the Universal Service. The House of Commons’ Business, Innovation & Skills Committee took the regulator to task for its proposals, with Conservative MP Nadhim Zahawi warning: “This is likely to take the UK overnight from one of the lowest stamp prices in the European Union to the highest.”

MARCH
In a warning of future problems, the month started with Whitewater’s senior management team – managing director Mark Roper and deputy md Paula Ryan – making a sudden exit from the charity specialist DM agency, where both had worked for a combined ten years.
George Smith, one of the pioneers of the UK direct marketing industry and a man described by the late Derek Holder as a true legend, also passed away. In a career that spanned over 40 years, Smith pioneered many of the direct marketing techniques now taken for granted and is acknowledged as a world expert on fundraising in particular.
Industry tributes were led by John Watson, Terry Hunt, Drayton Bird and Caitlin Ryan, who recalled Smith as “a true gentleman with a twinkle in his eye”.
The row over the proposed EU Data Directive continued to rumble on with the DMA publishing its own evidence which claimed UK companies would lose millions of pounds in profits and extra costs if the proposals went through. Commenting on the report, Chris Combemale, executive director of the DMA, said: “Many elements of the Regulation would be unduly restrictive for businesses, without meeting the EU’s stated aim of enhancing protection of individuals’ data privacy rights.”
Friends and former colleagues also paid tribute to data and CRM expert Shelagh Regester, who passed away after a three-year illness. A recognised authority on business strategy and direct marketing, Regester was most recently director of marketing strategy at Acxiom.
Also in March, Mike Cavers took up the role of executive creative director at Lateral Group. The company, which had recently been bought by US-owned printing firm Innovative Output Solutions, had previously specialised in data solutions but in hiring Cavers, Lateral signalled its ambition to challenge the agency market in terms of creative thinking and execution.
Meanwhile, as one door opened, another shut. COI director of direct marketing and evaluation Marc Michaels, arguably one of the most powerful men in DM over the past two decades, left as the government agency shut its doors for the last time. The closure of the COI – set up in 1946 – was announced last year, after the Coalition slashed government advertising and marketing spend by 68% from £532m in 2009/10 to an estimated £168m in 2010/11.

APRIL
April began with good news for the online ad market, with spend predicted to top £5bn in the UK during 2012 – its biggest increase in five years – as brand owners boosted their use of video ads and social media. The Internet Advertising Bureau (IAB) claimed that the UK has led the way in terms of moving advertising money from traditional areas of spending like newspapers and radio to online due to the high level of Internet access and the surge in the use of smartphones.
Over at Tesco, its sales slump triggered a change of focus, which signalled a return to the Clubcard-driven data strategy that had enabled the business to become a major force in the retail world. Boss Philip Clarke outlined a £1bn UK revival plan, with DunnHumby leading the charge.
There were also reports that spend on direct, data and digital marketing would rise – at the expense of mainstream advertising. City analysts had been questioning Tesco’s marketing strategy, and especially its reliance on the Big Price Drop promotion, even before its financial woes were revealed in January.
The reason for the top exits at Whitewater became apparent after parent company The Involve Marketing Partnership pulled the plug on both Whitewater and the Involve Agency (formerly JDA). Group chief executive Martin Smith, however, dismissed reports that the whole group – including Millennium, DMS, and United – had gone bust, stressing it had had “no impact” on the other businesses and agencies in the group.
Meanwhile, comedian Alan Carr gave his own take on how to get the UK’s 1 million unemployed youngsters into the workplace – by giving them jobs in contact centres. Carr, who worked at a Barclaycard call centre for five years before hitting the big time, told The Sun that dealing with customers over the phone should be the new conscription. “Never mind National Service – young kids should be put in call centres,” he said.

MAY
Another month, another warning, this time it was the cost of new EU cookies law, with one analysis estimating it would set back UK firms a ‘scary’ £10bn in lost sales, advertising revenues and businesses moving overseas. According to QuBit, the change was “one of the most important” in web development of the last five years.
Slightly better news for the industry was revealed by the head of IBM digital management Jay Henderson: brand owners are crying out for marketing chiefs with data analysis and coding experience – so-called marketing hybrids – to bridge a major skills gap. He explained: “Marketers used to be solely focused on the creative side… [but now businesses are] looking for someone who understands the technology and the business. There is a demand right now for IT-skilled marketers, and there is more demand than supply.”
Royal Mail boss Moya Greene was also feeling upbeat, at the World Mail and Express Europe conference in Geneva. She claimed the postal operator could increase its revenues from direct mail – which currently claws in £1bn for the company – despite a general decline in mail volumes.
She highlighted the potential of direct mail for her business, although much of her growth plans appeared to be in parcels – both at home through Parcelforce and abroad through GLS.
The tale of the Involve Marketing Partnership took yet another twist this month after the business finally shut up shop, with the sell-off of the last three firms in the group. The sale of DMS, United and Millennium ADMP brought the curtain down on the business first launched in the mid-Nineties, by former Damart marketer Martin Smith.

JUNE
By early summer, former Publicis Dialog chief Mike Welsh – who had been in the shadows since the merger and rebrand to Publicis Chemistry – took over from Joe Garton and Diane Charlton, who had resigned in May. The duo had been in charge of the agency since Publicis Groupe bought Chemistry for £14.45m back in 2010. However, Welsh’s promotion did spark the resignation of managing director Jason Foo.
In the reality TV world, Apprentice star Jade Nash fell at the last hurdle after her plans to launch a massive telemarketing operation selling on business leads was branded “grubby”. Nearly 7 million viewers tuned in to see Nash, a business development manager at DLG, beaten to the £250,000 investment prize for a plan which was very similar to the DLG business model.
Acxiom went for media expertise to replace chief executive and former ad man Stephen Whyte, with the appointment of ex-AOL director Christian Peck to run the UK business. Whyte, who left in July 2011 after just two years – without a job to go to – was a dye-in-the-wool adman.
Proof of Lida chief executive Mel Cruickshank’s pulling power was confirmed when she landed the role of president of Wunderman UK, following 12 years at the M&C Saatchi agency. Cruickshank took over from Brendan Tansey, and is now in charge of her former boss and Lida co-founder, executive creative director David Harris.
It was a busy month for the cheque-book of Centaur Media, the firm behind trade rags such as Marketing Week and the Lawyer, after it agreed to boost its underdeveloped web operation by purchasing e-commerce and marketing business Econsultancy in a deal worth £50m. The business-to-business publisher paid an initial £12m in cash for the UK company, which has 11,000 registered users and about 5,000 paid-for subscribers to its services, with a further maximum of £38m payable in 2016 dependent earnings targets.

JULY
The Government waded into the row over the EU data laws, accusing the European Commission of wildly under-estimating the full cost of its proposals, while exaggerating the benefits of creating a single law to govern across the EU.
The criticism, included in a Ministry of Justice response, cited plans to force all firms with more than 250 staff to employ data protection officers. While the Commission has estimated that the cost of employing data protection to be €320m each year across the EU, the MoJ estimated it to be £147m in the UK alone.
Charity marketing campaigns which use distressing imagery to pull at the heartstrings of donors were accused of barking up the wrong tree, by the Charity Commission, which claimed a positive message was much more likely to illicit a donation. Its report, Public Trust and Confidence in Charities, showed more than two-thirds (67%) of the public are concerned about the methods used by charities to fundraise.
Royal Mail finally revealed its blueprint to get brand owners back to the advertising mail market, when it relaunched and rebranded its Mail Media Centre to win back share from digital channels. The new-look hub was renamed MarketReach and will target large clients and agencies. The postal operator installed a new media planning team and tools to work with brands directly or to produce white label services for agencies. It also struck a deal with Callcredit to provide enhanced data planning services, while a creative service will offer development and production of direct mail.
Over at Reed Business Information, Zina Manda, a well-known figure in the UK data industry, left her role after more than 15 years with the company. Her exit coincided with the departure of global marketing manager Zoe Maolmhaadhog, who had been at Mardev eight years. The duo was among a number of departures thought to have been triggered by a group shake-out.
July did bring some good news for the direct marketing industry, however, with the release of DMA figures showing the sector is set to grow by 7% in 2012 to be worth over £15bn. According to the inaugural “Putting a price on direct marketing” study, UK businesses spent £14.2bn on DM in 2011 and it forecast expenditure to increase in 2012 to nearly £15.2bn.

AUGUST
Olympic fever caught the nation’s imagination and triggered a massive operation by the Royal Mail stamps team, with more than 100 staff working against the clock to produce Olympic gold medal winners’ stamps. The company also got the paint out, giving post boxes in winners’ home-towns a lick of gold.
Things were not quite so productive over at Rapier, where a disastrous over-investment in office space and a litany of account losses forced the one-time darling of the DM agency world – valued at £50m – to go bust. The Rapier brand, assets and goodwill were snapped up by CHI & Partners in a new 50/50 joint venture called Rapier Communications, but redundancies were widespread.
Over in Whitehall, direct and digital marketing got a shot in the arm after the Government revealed the disciplines would receive the lion’s share of spend in its new advertising framework. With up to £360m of the proposed £520m four-year budget going on DM techniques, just four agencies will work on the DM account, worth up to £160m, while six will be appointed to handle digital, worth up to £120m. Meanwhile, four firms will share the contact centre business, worth up to £80m over the four years. The budget compares favourably to the COI’s £60m direct and relationship marketing spend, but it will have to stretch much, much further.
The month drew to a close with news that the telemarketing industry was being hit by a new backlash – with many firms facing the threat of financial ruin – following a surge of complaints about unwanted marketing calls. According to the figures, gripes had trebled to almost 10,000 a month since the beginning of 2012, due largely to a huge surge in activity by PPI and accident claim firms.

SEPTEMBER
By late summer, agency Iris found itself being lambasted as ‘sneering, superior and ignorant’ after publishing its internal staff benefits book, ‘Iris on Benefits’, featuring staff dressed up as alcohol-swigging, chain-smoking chavs. Designed as a parody of the Channel 4 series Shameless, the book appeared to have seriously misfired. Blogger Holly Brockwell wrote: “I’m sure this was supposed to come across as light and humorous, but it doesn’t. It comes across as sneering, superior and ignorant.” The row has also spilled over onto social media sites, including Twitter and Iris’ Facebook page.
The industry paid tribute to Winston Fletcher, the man credited with ensuring the future funding of the Mailing Preference Service as well as wider advertising self-regulation in the UK, who died of a heart attack, aged 75. Having admitted that he “drifted into advertising fortuitously and have since rather enjoyed myself hoofing it”, he co-founded two ad agencies. But it is his work for the Advertising Standards Board of Finance (Asbof) – of which he was chairman for many years – where he rubbed shoulders with the direct marketing industry.
Chris Barraclough, one of DM agency-land’s most colourful characters, joined forces with one of adland’s most notorious – Garry Lace – and his business partner Robert Campbell, to boost the CRM credentials of their agency, Beta. The deal, for a nominal fee, saw Barraclough Edwards Chamberlain (BEC) move into the Beta offices and trade under the Beta name. Lace, however, left the business just over two months later.
Over at Royal Mail, there was a new boss in place as Jonathan Harman quit Aimia to head up the MarketReach offensive to woo brand owners back to the direct mail market. However, even before he’d got his feet under the desk his former peers in DM agency-land were crying foul. They accused Royal Mail of abusing its position to snatch away client business from them, after the company sent out a glossy mailing campaign promoting its ‘agency’ services.
But Royal Mail wasn’t the only organisation under fire, after agencies pitching for the Department of Health direct and digital account branded the process a shambles, amid claims that the client team didn’t “know their arse from their elbow”. One agency chief, who did not want to be named, said: “They asked for the moon on a sixpence and have been late or non-contactable at every stage. We should start a group to voice how rubbish they are. We’re missing the COI.”
OgilvyOne had the last laugh, however, when it landed the entire account, worth an estimated £50m. The move saw Proximity London, Partners Andrews Aldridge, DraftFCB and Kitcatt Nohr Digitas lose out after an initial 30 shops were invited to a briefing.

OCTOBER
The month kicked off with a reality check for digital enthusiasts after a survey revealed that most consumers have little appetite for new forms of direct marketing. It claimed they would rather communicate with brands through established email and direct mail channels, rather than mobile and social media.
While it was no doubt welcomed by sponsor Royal Mail’s MarketReach, it painted a rather worrying picture for most businesses rushing headlong into new channels.
IDM deputy managing director Neil Morris – one of the driving forces behind the organisation and founder Professor Derek Holder’s right-hand man for nearly 18 years – quit the business. Morris was seen as one of the potential successors to Holder, the IDM managing director who died earlier in the year. Along with marketing director Lisa Turner, he was credited with keeping the day-to-day operations of the IDM running smoothly over nearly two decades, freeing up Holder to be more of the public face of the organisation.
The autumn also saw the launch of an ad-based loyalty platform, Adpoints. Devised by former DLG directors, the management team also boasted a trump card – one of the masterminds of Tesco Clubcard, Terry Hunt. Under the scheme, consumers can collect Nectar points simply by watching video ads. Designed to bolster consumers’ engagement with video advertising, the scheme will also give brands a greater understanding of how their ads directly affect sales.
In a boost for the industry’s battle against the proposed new EU data laws, the Government pledged to join the fight to protect the UK economy against potentially damaging elements of the regulations. Justice Minister Helen Grant and Culture Minister Ed Vaizey agreed to engage with industry representatives to ensure that any rule changes work for both consumers and business.
Later in the month, they came good on their promise with the Justice Select Committee is urging Brussels to ‘go back to the drawing board’. Led by the DMA, marketing trade groups – including ISBA and the IPA – have expressed their concerns over how the regulations would affect activity. The CBI has also been critical about the plans, which the DMA estimates could cost the UK economy more than £47bn.
Back in agency-land, the co-founders of DM shop Ruby seized control of The Red Brick Road – the one-time toast of adland set up by Frank Lowe – with bosses Paul Hammersley and David Hackworthy being bought out. Ruby was founded in November 2007 by CHI creative team Richard ‘Dickie’ Megson and Matt Davis, along with Proximity board director David Miller. However, it was folded into the main agency in the summer, with Miller becoming managing director.
However, the telemarketing industry’s woes continued after a Surrey man successfully sued one company in the small claims court for wasting his time. Urging millions of consumers to take revenge on rogue telemarketing firms, Richard Herman from Sudbury on Thames decided to act after being bombarded with cold calls from PPI claims firm AAC, even though he was registered on the Telephone Preference Service and had never taken out a PPI policy.

NOVEMBER
Archibald Ingall Stretton co-founder Stuart Archibald revealing he had the launch of a London agency in his sights. Unveiling his new venture in Sydney, Archibald Williams, the former AIS boss said he planned to position the business as a ‘strategic compound’, tapping into a network of creatives both in Sydney and around the world.
The Government’s data tsar risked the wrath of Royal Mail – as well as some established businesses in the data industry – by demanding that the postcode address file (PAF) is made available free of charge to all firms.
The move would in one fell swoop wipe out £26m from Royal Mail’s revenues and hit firms like Postcode Anywhere, which charge a premium for added-value services that rely heavily on PAF data. But data bureaux welcomed the plan, with one chief looking forward to the demised of “the ludicrously complicated PAF licences”.
The month also saw former DM agency chiefs Shaun Moran and Mike Cullis join forces with ex-CMW planning director Ben Rachel to launch their own agency, Soul, under the premise of “people first, channel second”. The trio had reportedly been planning the start-up since the beginning of the year and will concentrate on CRM, behavioural influence, content and strategy with the aim of “creating relationships with customers”.
Meanwhile, Wand directors Brian Storey and Xanthos Christodoulou were reunited with their former co-founder Ian Winton after signing a merger deal with Golley Slater’s London agency, where Winton is chief executive.
Things weren’t going quite so smoothly for Karmarama, however. It was forced to pull an online cycle safety campaign on YouTube and on a website called Ride-smart.org, after sparking fury among London cyclists who were branded “stupid twats”. The agency blamed a rogue employee for the initiative, which offered tips for safely cycling in the city, using the slogan: “Ride Smart – Don’t Die Stupid.”
Royal Mail privatisation moved a step closer after it revealed profits had rocketed by 1,200% – from £12m to £144m – in the first half of the year, although it faced accusations that the rise had been triggered by an “avalanche of junk mail”. With direct mail – both addressed and unaddressed – now representing half of all the 54 million daily postal deliveries, even the Local Government Association branded the medium a menace.
The direct marketing industry was in shock following the death of former Tangible boss Andy Carolan – one of the giants of the Scottish DM industry – who died after being struck and killed by a train. Tributes flooded in from industry figures and former colleagues, with Jonathan Spooner summing up what many felt when he said: “Quite simply, he was one of the nicest blokes I have ever worked with. I shall miss him very badly.”
November ended well for the ICO’s coffers after it slapped a £440,000 fine on the owners of one mobile marketing firm found guilty of sending up to 840,000 spam texts a day over the past three years. The owners of Tetrus Telecoms, Christopher Niebel and Gary McNeish, had been under investigation for 18 months.

DECEMBER
Another month, and more good news for OgilvyOne after it claimed the grand prix at this year’s DMA Awards with a campaign for industrial weighing scales manufacturer Kern & Sohn. The push, which had already won a silver at both the Cannes Lions Direct and the Echo Awards, picked up gold in nine of the DMA’s 38 categories, with the agency also landing gold for Drinkaware and nine silvers and bronzes for BA, IBM and American Express.
December was a pretty good month for Matt Atkinson, too, who took over as chief marketing officer at Tesco following the departure of Tim Mason. Atkinson had been group marketing and digital officer since joining 18 months ago from Havas EHS; he previously reported to Mason.
Wunderman UK executive creative director David Harris also found himself with a new boss, when newly installed president Mel Cruickshank brought in Wunderman Australia ECD Matt Batten as chief creative officer. The former Saatchi & Saatchi man has been with Wunderman since 2008.
Better news for data professionals skilled in working with ‘big data’ technologies – they can command salaries which are up to 20% higher than other analysts and developers, according to e-skills UK. The company’s research, which estimates that £2.5bn has already been spent on big data salaries in the UK, claims the demand for specialists will almost double over the next five years.
Meanwhile, the REaD Group brought all of its group companies – including REaD UK, Metamorphix, Scientia Data, TRG Strata, Funnel and Cloud 9 – under one roof, rebranding the whole operation as The Data Agency. Described by the company as “a simpler, faster and smarter way of working”, the move sees some of the DM industry’s most well-known data services being rebranded, although the holding company will continue to be called The REaD Group plc.
Payday loans firm Wonga rounded off the month by entering the online market to offer shoppers the option of borrowing cash to fund their Web purchases. Taking on an industry dominated by PayPal, customers are to be given the choice of paying for their goods with an upfront fee of 7% and three equal monthly instalments. A £100 purchase would incur a one-off charge of £7 followed by three payments of £33.33. The company is in the early stages of developing the service – dubbed Wonga Paylater – and will initially work with a small number of retailers.

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