Building the BBC online

under-exploited. Ironically, Aunty Beeb is getting the chance to exploit

them in one of the few places where the success of the BBC brand is not

assured: on the web. Will the lack of a direct transactional relationship

with its existing customers make the switch to online broadcasting a tough

one for the BBC?

Not according to Simon Johnson, marketing director for beeb @ the BBC, the

corporation’s new internet service. ”The ad-supported model works well,”

he says, pointing to the highly successful publishing arm, BBC Worldwide,

under whose control beeb falls.

The service is being rolled out over the next four months, with eight

different content areas. Already launched are a Top Gear-branded motoring

section, sports service The Score, and a TV and film area roughly based on

the Radio Times. They’ll be joined by comedy, travel, science fiction and

”edutainment” areas, as well as an online shop. ”The response to the

launch has been phenomenal,” says Johnson, and the figures seem to bear

him out. On June 5, the first day of the Ashes cricket series, beeb

launched The Score with a downloadable window featuring live sports

scores, known as ’score!watch’. It received three registrations a second -

making a total of around 80,000 on that day alone.

So an ad-supported BBC service may not be such an unlikely prospect.

What could shake up the market, however, are the corporation’s plans to

set up this autumn as an ISP and start offering internet access as part of

the beeb package. The nature of the access offering is under review, says

Johnson: ”The access business is becoming fragmented and we’re

re-evaluating that plan.” However, the provision of content plus access

appears to thrust the BBC into a similar market to some pretty unlikely

competitors.

For a start there’s LineOne, the new joint venture between News

International and BT, which offers both News International’s content and

third-party intellectual property within a paid-for ”walled garden”. The

BT end of the equation means LineOne also acts as an ISP, providing access

to the wider internet. Since its launch on April 6, the service has picked

up more than 13,000 subscribers. Whereas 90 per cent of beeb’s content

will be free, LineOne users pay even if they do not take up the access

option.

More intriguingly, both beeb and LineOne are moving into the territory

traditionally covered by established online services. Microsoft Network

(MSN), for instance, combines a moderated, TV-like online experience with

access provision and the ability to connect to the web. Even big ISPs,

like AOL and CompuServe, have traditionally sold their offerings as a

package of access and content.

Companies such as News International and the BBC, which are accustomed to

providing both content and the means of viewing it, want to do the same

online. What’s less clear is how their services will affect the shape of

the UK consumer internet market, and how they will affect marketers

looking to reach those consumers.

Simon Johnson doesn’t believe beeb will have trouble differentiating

itself from competitors. ”I’d be loath to say we have any competitors,” he

says. ”We’re all about content. No other operator, such as the MSNs of

this world, has access to so many brands and personalities behind them,

like Jeremy Clarkson on Top Gear. As brands go online, we will always

offer more than just the TV shows.”

Instead of competing with fellow internet services, Johnson is keen for

beeb to square up against other types of media: ”We’re so close to

consumers in terms of getting them to participate.

We received hundreds of emails the day score!watch was launched and we

were able to reply to them in real time. The TV and radio people would

kill for that sort of interaction.”

LineOne marketing director David Lethbridge is unconvinced by beeb’s claim

to uniqueness. ”It could be more of a competitor for us than AOL or MSN,”

he says. ”It depends how it moves forward.”

According to News International’s director of new media Richard Withey,

all the online services could end up competing with each other:

”Obviously, beeb will offer consumers a choice. We’ll be aiming for the

market share of all conventional online services.”

While acknowledging the new services will provide competition, traditional

online service providers deny they’re threatened by the new boys. ”In the

strange hurly-burly world of the internet,” says MSN UK director Judy

Gibbons, ”they could be competition - yes and no. They’ve obviously taken

the view that we have, offering access in order to drive people to their

content. Our focus is our content. We’re concerned about the user

experience.

We’re not in the network business like AOL and CompuServe. As networks

become commoditised, that’s the business of telecoms companies.

”Different people are bringing different things to the party,” says

Gibbons.

”LineOne and beeb have strong media brands and the ability to

cross-promote.

However, we’re a really trusted brand for computer users. The BBC will be

the closest to us. LineOne, at the moment, is an amalgam of consumer

brands and you’ve got to choose which one you’re interested in. It’s

difficult to create value behind a brand which is just a collection of

brands one level down.”

AOL UK’s managing director Jonathan Bulkeley also believes his service

will have the brand strength to resist the new challenge. ”They’re trying

to reach the same market as us: people with PCs, modems and credit

cards.

We would consider BT more of a competitor because they’re actually in the

market now,” he explains.

”There’s a danger that services could become similar. Anyone could get

into this business. You could have content going today and access going

within 30 to 60 days. Anyone can start up, but very few people do it well.

There are a lot of moving pieces: customer service, installation, design,

price.”

He even believes the new services could help AOL: ”The more competitors,

the more attention is attracted to the internet.”

The BBC certainly believes it’s helping to evangelise internet use. ”The

BBC’s arrival marks the movement of the web towards mass acceptance,”

claims beeb head of advertising Simon Sadie. ”We don’t regard it as a

technological thing, but as a way to get together and form communities.

The challenge is to make advertisers part of these communities. We can get

a level of consumer interaction with, and response to, our brands that we

never get elsewhere.”

David Lethbridge claims LineOne is also keen to use its strong branding to

draw in potential web users who have previously been put off by the image

of the internet: ”The first problem is getting people to believe they want

the web. People think there’s no good content and it’s slow, and a lot of

people are scared of technology. They think it’s a nerdish, anorak

activity. Our job is to change that.”

According to Bulkeley, however, online services like AOL have experience

on their side: ”Our big advantage is this is our only business. This is

what we wake up in the morning and think about. I don’t suppose the

directors of the BBC can say that. In fact, I don’t suppose they’ve ever

used the internet.”

Judy Gibbons agrees that a dedicated focus on the medium is where

established online services score: ”We’re made for the medium. We have no

considerations of traditional media. We’re focused on what this new medium

can offer uniquely and on exploiting it.”

Unsurprisingly, both the BBC and News International take a different view,

seeing the off-net strength of their established brands as their trump

card. News International’s Richard Withey comments: ”We have significant

brand names on our service, like The Times. We decided to use a new name,

but it’s easy to remember and we push our brand identities, so LineOne is

coming to consumers from the people who brought you The Times or whatever.

We’re pushing the News International and BT brands.”

The BBC is planning to be more upfront than LineOne about using existing

brands. Says Johnson: ”We are taking a two-tiered approach to brands.

Top Gear conveys the BBC motoring brand, so we used the brand name of the

TV programme and magazine. There was no suitable sports brand, so we chose

The Score, which will use the familiar brands like Grandstand and Match of

the Day within it.

”Our ongoing ad campaign will go out around individual brands. We will be

promoting the service in an umbrella campaign from September. But

LineOne’s ads only promote the LineOne brand.”

According to Withey, however, promoting LineOne as a self-contained entity

gives the companies the opportunity to provide high-quality content under

a single brand. He believes paid-for content is essential to provide a

good consumer experience: ”If you make content free, you end up with bad

content. People will pay for good-quality, editorially-streamed

content.

We are trying to bring a package of content to the customer, and provide

good web access too.

”For instance, our business section is aimed at people who need some

business information but don’t want the expense of traditional business

information services. The bulk of UK businesses have fewer than 50

employees. These people have an information need that isn’t necessarily

met by existing services.”

”We needed to develop a new retail brand,” comments David Lethbridge, ”so

there’ll be BBC1, Radio One, Sky One, LineOne. The idea is to become a

first source of information. We needed to combine access to make it a more

attractive proposition. You can’t compete with the web and make your

service proprietary, but we can provide a gateway to it. The market isn’t

ready to have one ISP and then go and buy bits of content from different

sources. If we win with the consumer, we’ll beat the competition.

”We considered giving away content. People are used to free content, but

they’re put off by bad content. What’s required is exclusive content,

which is what the Microsofts of this world are learning.”

MSN’s Judy Gibbons claims a moderated content experience is the key value

online services can add: ”Consumers want communication; search services;

useful essential services; and engaging, sohisticated, made-for-medium

programming. The last is where we score. The internet is so mesmerising.

People want a choreographed experience with customisation and

personalisation.”

Ascertaining exactly what consumers do want is going to be the big

challenge for the online media owners. According to Johnson, the feeling

at the BBC is that the beeb could move more towards paid-for content:

”It’s mostly ad-funded at the moment. There could be more subscriptions if

the market changes.”

Lethbridge claims LineOne could go in the other direction: ”It could be

the model will change. Ratios are going to change. It won’t be completely

ad-funded, but the subscription element could become smaller.” As LineOne

commercial sales director Simon Jones jokes: ”We may end up paying people

to access the service.”

THE BEEB: ’TARGETED ENVIRONMENTS FOR ADVERTISERS’

According to beeb head of marketing Simon Johnson, the biggest lure for

advertisers is the strength of the BBC’s brands: ”We offer advertisers a

unique branding proposition: a quality, trusted, reliable company with

some of the strongest brands around. Advertisers want to associate with

these brands.”

The sub-divided areas within beeb provide perfect targeted environments

for advertisers, he adds: ”We can offer huge communities, for example,

people who follow cricket or football. Advertisers will fall over

themselves to get into that. New types of advertising are a challenge for

advertisers. It’s an opportunity to do something different.”

Advertising on beeb will be split into banners and so-called primary

advertising. Head of advertising Simon Sadie claims the latter is a

sensible route to go down for an online media owner: ”Primary advertising

is the kind of sponsorship that works on the web. We feel quite strongly,

particularly with a brand like the BBC, that ’brought to you in

association with’ is a bit naff on the web. Also, we want to emphasise

we’re objective. So we won’t do that sort of sponsorship, but we will work

hard for advertisers.”

Media buyer Hal Pearson of Mediapolis, who bought space on The Score for

Microsoft, has been impressed with the results so far: ”The BBC is really

well-known for its sports coverage. During the first test match, the

Scorewatch electronic scoreboard was probably used by every ABC1 man in

London who wants to watch cricket.

”Initial results from the BBC site are excellent. It’s a very exciting

place to be, and if you can keep people excited on the net, they’ll stay

on your site.”

According to Charlie Dobres, marketing and media director of Lowe Digital,

the launch of beeb is a welcome opportunity for advertisers to get

involved with BBC brands: ”They have some absolutely top brands which they

can at last sell.”

Basic display ads begin at œ30 per thousand impressions.

LINEONE: GOING AFTER ADVERTISER PARTNERSHIPS

Rather than straight banner advertising, LineOne prefers to go down the

route of forming mutually beneficial relationships with advertisers.

Commercial sales director Simon Jones explains: ”Until we have a

significant customer base, and one we can divide into significant cluster

groups, advertising banners are not our primary focus. ”Our main focus is

trying to understand the transactional model. We have to build trust and

confidence. We have brands that you would find in the high street, for

example, First Call and Interflora, selling across the internet. We’re

trying to understand how it works.”

One example of the transactional model is Wines Direct, the wine club used

by The Sunday Times, which now has a presence on LineOne.

Wines Direct marketing director Alex Fraser comments: ”The Sunday Times is

our premier club. We’re always keen to get involved with News

International because they have tremendously strong brands.

”It gives us experience of operating on the internet. Transactional

volumes are not high, but at the moment there aren’t that many

subscribers, and we expect them to grow all the time.”

Buyer Chris Rainer of BMP was keen to be involved with the company when it

came to advertising Marmite online.

”For the Marmite campaign, LineOne had two very strong points: it was

totally UK-focused, and there was the marketing clout that News

International is bringing,” he explains.

”There was flexibility in terms of what we could do, so we were able to

give people two different questionnaires to fill in: I love Marmite or I

hate Marmite,” says Rainer.

However, the lack of a standard way to present data to advertisers is

holding back the development of internet advertisements, according to

Jones.

”The problem is that any agency or buyer needs to be extremely

accountable. Here we are with the most accountable medium in the world and

we’re not accountable. We need a common way of presenting data,” he

says.

At the moment, LineOne’s theoretical banner rate card is œ7,500 for six

months, although as Jones says, ”it’s pretty ridiculous to have an

advertising rate card. We’re expanding so fast.”

MSN: SIZE IS THE KEY TO ATTRACTING ADVERTISERS

Sheer size is pinpointed by MSN UK director Judy Gibbons as one of the

company’s big advantages: ”We offer advertisers a huge audience. Those who

come to our home page account for one of the top five traffic levels on

the web. We also have 2.5m members, 130,000 of whom are in the UK. AB

professionals make up 80 per cent of these and they have a high disposable

income. That’s a close fit to a very desirable ad audience.”

The company is keen to encourage advertisers to do more than simply run

banners, says advertising manager Tom Bowman: ”MSN is well-placed to offer

realistic, practical advertising that goes beyond banners. People can

advertise on the intro sequences to our online programmes, even on

commercial breaks in programmes.”

Bowman disagrees with the beeb’s opinion that sponsorship doesn’t work on

the web: ”Putting your name against a certain product which is ’brought to

you by’ is a better way of brand-building than banners.”

Charlie Dobres of Lowe Digital claims online services are a good

introduction to advertising online, but warns they are more useful for

some campaigns than others: ”Traditional online services work better for

advertisers who are newer to the web. They tend to start with a walled

garden approach.”

MSN’s rate card for display advertising begins at œ30 per thousand

impressions.