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Marketing Direct: How will life change for Carlson in the UK after the Groupe Aeroplan deal closes next month?
Jonathan Harman: In the short term, it won't. We have been clear in saying that there will be no changes as a result of this announcement and we will continue to operate independently. So the immediate focus remains on our clients and ensuring we meet the commitments we have made to them.

In the medium term, we'll look at how we can deliver for our clients, our staff and our shareholders by using the combined capabilities of the expanded group.

I'm really excited about the future, but the truth is there are no firm plans yet other than to focus on our existing clients for the time being.

Q: Aeroplan also owns Nectar here in the UK. Will we see greater cooperation between you both?
Well, Groupe Aeroplan owns both Nectar and LMG Insight & Communication in the UK and of course, the intention is to co-operate closely whilst remaining completely independent.

We'll start working on what form the cooperation takes soon and as we find opportunities that work for clients, staff and shareholders, I'm sure we'll be keen to progress them.

Q: Overall, how is the recession treating Carlson?
Our numbers are up for the third year in a row now, and back to a point where we're making a decent profit. So, not too bad at all, thank you.

Q: What do mean by ‘decent'?
Double digits. We're still a private company so I can't elaborate any more I'm afraid!

Q: The secret of staying above water in a recession?
I'm not sure it's a secret but it's more important than ever to get the basics right.

For me, the basics are firstly making sure we are delivering results for our clients and are easy to work with. There aren't too many clients right now with time on their hands and budgets for luxury marketing!

Second, we need to make sure we look after our people. Clearly there isn't the same money to invest as in better times but good communication, listening and clarity of purpose cost nothing. I'm not saying we are perfect in this regard but we do try very hard.

Finally, we have really focussed on cash flow. We made an investment hire in accounts receivable - Joelle Gage from KPMG - to make sure we get paid on time and our working capital position is pretty strong now. Our clients have been very cooperative. After all, it's in their interests that we weather the recession strongly too.

The bottom line is that this is a simple business. If you make your clients a ton of money and ensure that you're an easy agency to deal with, you won't go far wrong.

Q: When you say, ‘look after our people' do you mean bringing back bonuses?
I expect to be able to reward outstanding performance this year with some bonuses. This is likely to be of more interest to Auto Trader than Aston Martin though!

We have had a pay freeze. It seemed like the sensible thing to do given the circumstances. Our people aren't stupid, they watch the news - they know there's less cash around and that a pay freeze is a long way from the worse-case scenario for any of us.

That said, I obviously want to remove that freeze as soon as it makes sense to do so. When we do, I expect us to start with the deserving cases among the lower paid members of the team first. It's important that management go last in this regard and that is how we have managed the salary rises in recent years.

Q: What new business is in the pipeline?
We've won two significant pitches in the UK in the past month or so - a multinational retailer and a domestic utility company. We've also just been appointed by a telco in Kuwait so it's been a strong end to the year across the region and the pipeline is pretty robust too.

I'm not sure I want to call the end of the recession but there is clearly significant interest in both loyalty marketing and direct/data/digital briefs - both of which are right up our street - so we're cautiously optimistic about 2010.

Q: What did you make of Omnicom pulling its direct agencies out of the long list for the Post Office pitch, because of an unlimited liability clause?
It didn't strike me as strange at all. To be honest I thought it must have been a light news week for you guys.

I think it's sensible for Omnicom to avoid subjecting its business to unlimited liability. Normally, it's possible to negotiate a cap on liability, perhaps a low multiple of revenue but in circumstances where it is not, I absolutely understand people walking away.

We declined a pitch this year over contractual terms we couldn't live with and another from a client with a poor reputation for paying bills on time.

It's not fair to paint The Post Office as villains though. If they can assemble a shortlist of sufficient calibre who are willing to sign up on those terms, it's clearly working for them so why would they change?

Q: You've been nominated in the DMA Awards for the Department of Health and Lurpak. Do awards still matter?
I can think of only three agencies that have more nominations than us this year and I'm really proud of the progress that Piggy [Lines, executive creative director] and Scott [Bedford, digital creative director] have made in a relatively short period of time.

Awards are important for recruitment and retention. If they were worthless why would agencies spend time and money entering them? Awards have their place, but they're not any kind of silver bullet.

Q: Speaking of recruitment, what hires have you made in the past year?
We've tended to hire more digital staff because there's greater growth in that area. We have a great head of digital called Jed Murphy and have hired Scott from Syzygy as digital creative director. He has made a big impact; he really understands how to use the various media creatively.

We've also just hired Steve O'Connor as business director from VCCP and Tina Christison as data strategy director from OgilvyOne, who are both doing really well.

Last year we hired Guy Culshaw from EHS Brann to lead the planning department. As media gets more complicated and fragmented, you need more planning input to make sense of it and keep the consumer as a stakeholder in the work. We also appointed Piggy as our ECD from DLKW. Both of them have been outstanding for us.

Q: How has digital changed the way you work at Carlson?
Projects are more complex now - as well as creative integration, technical integration is very important. There are a number of models for making this work but the key thing is that consumers get a seamless experience and clients get to sleep at night.

So, for instance, we partner with Sapient, YOC and Fair Isaac on Coke, which works well.

Agencies didn't own printers when direct mail was the main channel and we don't own TV production. You have to put it together in the way that makes sense for clients.

When a new media is pioneered, it's always going to be a specialist territory, so it's important for agencies to be good at working with other agencies.

Q: Do digital staff rule the agency roost these days?
Digital wage inflation has been an issue in previous years but that has definitely lessened during the recession. I'm not sure they ever ruled the roost; it's important that no discipline dominates if they only focus is to be client business results. No matter how talented someone is, we don't have roles here for people who can't work in teams.

Q: Does Carlson operate like a network, in that a proportion of your work is handed down from the centre?
Historically, almost all of our work has been won locally. We now handle a few multi-national accounts and we see this as a significant growth opportunity.

The UK is largely autonomous - I normally visit our HQ in Minneapolis around twice a year - but there's a high degree of cooperation between the various offices, in terms of knowledge transfer, for instance.

I think it's a real differentiating point for us because clients will tell you that the issue with global networks isn't how many dots you have on the map; it's how well personally connected the individuals within the offices are.

Q: You go to the US a lot. Do you get the sense that the US still leads in terms of DM techniques?
In the 1990s I was a keen student of US financial services direct marketing. It was a kind of guilty pleasure!

I think the ways we create communications for clients today are much less about techniques and more about customer journey context, brand experience, channel choice and relevance.

This puts data firmly at the heart of what we do now and there are definitely a few interesting things coming out of the US in that regard.

We have just completed a mobile usage segmentation that informs us on how different people use their devices and the implications of that for the decisions marketers make. I'll be sharing that with a conference in Dubai next week.

Another example is our RSX tool that measures relationship strength which we have been able to apply to other markets around the world. We used this to help an airline understand which of their product and service benefits were most valued by various kinds of flyers. When you know that, you can help a client decide how to invest in catering, cabins, and check-ins etc. That's sexy stuff in my eyes...

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