Dixons boss issues warning to ad agencies to change

LONDON - John Clare, the chief executive of the Dixons, Currys, and PC World retail group DSG International, today called on the advertising agency world to find new business models and a new kind of creativity suited to the rise of new media.

Clare, who is also the president of the Incorporated Society of British Advertisers, used his speech at today's ISBA conference to reflect on the rise of new technology and its impact on advertisers, agencies and the media.

He illustrated how the internet had disrupted traditional advertising by referring to the experience of his company, which has a constant presence among the top 10 press advertisers in the UK.

"The role of press in our media campaigns is dying rapidly," Clare said, but warned that new media advertising was having little positive impact on store sales.

"Our ad agency needs to think very carefully about how to use the internet to drive customers to our stores. The internet is playing a role today, but more by accident than by design. It's playing that role with little or no input from our ad agency."

Clare avoided naming and shaming M&C Saatchi, which holds the 拢100m advertising account for all DSG brands, which also includes mobile phone store The Link.

He drew a comparison between the 1970s, when 65% of people used to come into DSG's stores having researched prices using press ads, and now, when that figure is now 15%. In contrast, 60% of customers coming into stores have looked at the store's website first, although only 3% of DSG sales are made over the internet.

Clare's message was the world is changing faster than many think, and agencies had yet to appreciate this. Ofcom's predictions for the growth of digital technology uptake over the next few years were too conservative in his opinion.

The news, however, for advertisers was not all bad with Clare pointing to the opportunities they increasingly have to improve cost effectiveness by exploiting the competition among media owners for spend.

DSG chain Currys last year slashed its 拢37m advertising budget, and the group has turned to alternative approaches such as selling MP3 players loaded with music from unsigned bands, which were chosen by the audience of satellite and internet radio station Pulse Rated.

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