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As the UK's number one broadband player, it is perhaps no surprise that BT is also the country's biggest online advertiser. It spent a whopping £15m online in 2005, about 17 per cent of its total budget, and the web is its third-biggest ad medium after TV and press.

But it is not how much the company spends online that sets it aside from other big brands. It is that digital is now truly at the centre of BT's marketing and media strategy. So much so that it is now starting to lead the company's offline communications.

In fact, Rebecca Morgan, head of communications for BT group brand and marketing, says she would give up TV before online. "If you think about the two major parts of our business, namely being a broadband company and developing our credibility in the digital networked economy (DNE) space for major businesses, then actually you can't do either of those things without online being core and being almost the first thing you start with," she explains.

Despite perceptions of BT as one of the nation's toughest clients, thanks to its size and scope, Morgan, who is responsible for marketing and brand strategy for both consumer and B2B products, could claim an easier job than some marketing managers when it comes to integrating digital communications into her strategy. She doesn't have to 'sell' the medium to the rest of her business or convince her superiors that digital advertising works; an internal battle that many of her counterparts at other big brands are still fighting.

"I find it absolutely astonishing that businesses can still be having those sort of conversations about online and digital," she says. "It doesn't really matter what business you're in. If you start from the point of how people use their time and what they engage with, then how can you possibly conclude that online should not be a core part of your strategy?"

She admits that it is easier for BT, being a technology business, to see how digital can work for its brand. Online has been key for many years and now BT is taking it to the next level. As well as continuing to shift spend from TV, it is restructuring its planning process around interactive media.

Jon Ghazi, media strategist at BT, says that planning should start from interactive channels; ones that enable the firm to engage with consumers and start a dialogue with them, rather than simply issue statements. To help make this happen, BT recently brought in Justine Tate as head of digital media from mobile operator O2. Last July, the company also hired Zed as its new digital media agency, replacing i-level, in one of the biggest digital pitches of 2005.

Tate and the BT media team are working with planning and strategy consultancy PHD, as well as Zed, to develop a media strategy for the next few years.

"Online is already a big part of our plans and it's going to get even bigger. We want it to be at the very core of our media strategy and to start with online from the outset," says Tate.

Meanwhile, Morgan has reshuffled her section to fully integrate interactive communications with above-the-line creative (see box, p31). "It didn't make any sense to me to split it (marketing) by discipline because the relationship between our online communications and advertising is really strong," she explains.

With online now at the heart of both the creative and media process, it allows for a more level playing field when it comes to generating ideas.

BT's digital creative agencies Agency.com and Wheel are briefed on campaigns at the same time as above-the-line agencies, and all are asked to provide a response to the brief.

Because online is a core part of every campaign BT does, ideas from the digital agencies often flow into other media. For example, Agency.com recently came up with the idea for a BT broadband promotion in conjunction with Apple iTunes, 'Collect the soundtrack to your life', which ended up becoming a £6m promotion (see box).

"I'm not a matching-luggage fan, so I don't think that the answer for any medium, whether it's online or anything else, is to take an idea that's come out of TV and just slap it into other media," says Morgan. "Each medium is interacted with and has its own characteristics, so integration has to be a bit more sophisticated than just matching luggage. It needs to be integrated around a proposition idea that then carries through."

Cross-media integration

David Eastman, managing director at Agency.com, says BT's creative process is unusual. "Typically, the natural order in the industry is that the above-the-line agencies lead the thinking, and the other agencies have to interpret it. Sometimes, with BT, it works the other way around, and that's had a lot to do with the fact that BT trusts its digital agencies and has faith in the medium of digital."

The web is also massive to a business whose core revenues are genuinely threatened by its rise. As phone services migrate online, so broadband is a potential lifesaver for the country's dominant telecommunications business. "Our strategy for 2006 is to really start changing perceptions of BT as just a telecoms company, and pushing it as a future digital provider for the people of the UK," says Christian Peck, chief operating officer and head of the BT account at Zed.

BT will continue to develop existing channels like search - which accounts for about 20-40 per cent of the company's online budget and is one of its best performing acquisition tools - as well as trialling new ones. "As a technology company, it is really important for us to be seen to be leading in this area," says Tate. "Unfortunately, because we're such a big brand, people sometimes think of us as lagging behind."

The company has a budget set aside for trialling any new online creative or new media platform first. Tate works closely with big online media owners like Yahoo! to make sure she is aware of new creative formats as soon as they are available. She is looking at cross-platform advertising opportunities, for example, being able to advertise through digital radio on the internet, Sky and mobile handsets.

BT is also keeping an eye on cutting-edge media such as podcasting and RSS feeds, as well as new digital opportunities in outdoor advertising, such as digital screens on buses and at Tube stations. "We have a hell of an appetite for trying new things. So, for example, I think we were the first people to try the roadblock format online when we launched the DNE campaign," says Morgan. "It's all about testing and learning."

The media strategy is also moving from acquisition to brand building.

"Our key emphasis will be building up the brand and bringing it to life online," adds Tate.

Maintaining consistency

But the scale of BT's marketing, including online, is daunting. The company has been criticised for having so little synergy of strategy and tone across its advertising that it could easily be from different brands. As we speak, Tate is managing 24 online campaigns for a range of different products and propositions. She says the challenge is to gain consistency across its online activity. "We're such a big company with so many different products, but we need to make sure we tie it all together," she explains. "It's not going to happen overnight, but it will happen."

The firm has already started the process of tying together its offline communications, launching a single TV campaign for all its consumer services, created by Abbott Mead Vickers BBDO, which demonstrates how modern families can interact using BT's services. Morgan's team is now working to develop a similar all-encompassing creative concept for online.

Because BT was the former national telecoms provider, Agency.com's Eastman says there's still a generation of consumers that see it as belonging to the people, "as opposed to seeing it as a nimble, young company that understands its consumers inside out and offers the things they need and want to use on a daily basis". He adds: "Over the past five or 10 years, BT has done an incredible job of re-invigorating its brand but, because it has such a lot of history, it's very difficult to change people's perceptions."

Morgan accepts the legacy. She says her single, biggest challenge is getting people to reappraise the BT brand. "The challenge going forward is to try and find innovative ways to use online and to do fresh things because that's a big part of helping people to feel differently about what BT's doing. The best thing about digital is that it's a very agile medium and that suits us because we're moving to become a much more agile business."

BT'S NEW MARKETING STRUCTURE

To reflect BT's increasing focus on digital marketing, it restructured its marketing department last year.

The firm previously had its marketing communications function split into three teams: above-the-line advertising, interactive communications and BT.com, and direct marketing.

All three teams reported to Rebecca Morgan, who joined the company as head of marketing communications from advertising agency BBH in September 2004.

She has since taken the interactive communications team out of BT.com and merged it with the above-the-line advertising and direct marketing teams.

A single team is now responsible for marketing and brand communications across all media channels for the entire BT group, both business-to-business and consumer products.

BT.com is still managed by a separate team that reports to Morgan, but it works closely with the advertising team and is involved in the development of both online and offline communications.

The advertising team also works very closely with the media team, which is headed up by Steve Huddleston, and includes several media strategists and a head of digital media, Justine Tate, who is responsible for BT's digital media buying and strategy. Morgan and Huddleston report to marketing and brand director Tim Evans.

BT retains a number of advertising agencies on its roster of suppliers.

BT LOVE MUSIC CAMPAIGN

BT's 'Love Music' campaign, which kicked off in August 2005 with the strapline 'Collect the soundtrack to your life', is an example of how digital creative ideas are leading offline communications.

BT joined forces with iTunes to promote Broadband from BT by offering up to 40 free tracks with its purchase. The brief was to communicate this offer to 25- to 45-year-old narrowband users, with the ultimate aim of migrating them to Broadband from BT.

Agency.com's main challenge was to build a connection between BT Broadband and music. By understanding the role of music in consumers' lives, BT was able to connect, with credibility, to consumers. The agency's web executions backed the message that, with BT Broadband, customers could indulge in their love of music by getting free down-loads. As online users are task-orientated, visualising the benefits clearly and simply was key.

Impressive results and quick clues to BT Broadband's benefits made the online work perfect for press media also. Abbott Mead Vickers BBDO used Agency.com's creative execution of a hedge cut into musical instruments to feature in their leading press execution.