European-Style Leadership

By Paige H. Muller

Many ERA members got their first glimpse of Branimir Brkljac, the newly elected chairman of ERA Europe, on stage during the interactive opening general session at ERA’s 16th Annual Convention. The passing of the gavel from outgoing chair Gilles Labouyrie to Brkljac took place officially this past September at ERA’s Board of Directors meeting in Las Vegas.

While he may be a new face to some, Brkljac is a veteran ERA member and industry professional. As President and Partner of Budapest-based Studio Moderna, he manages over 60 hours of direct response airtime on almost 50 television stations daily coving a combined market of 250 million people. He also had a significant role in the establishment of the modern direct response television industry in the region.

One of Brkljac’s main objectives as chair is to reach out across the region to other industry professionals and demonstrate why it’s so important to be a part of an organization that represents their business interests. As a member of the ERA Europe’s Communication & Education Committee, he recently launched The News Shop, a monthly e-newsletter to share ERA and industry news, and trends from around Europe with peers in other countries.

ERA posed a series of questions to Brkljac to find out what else is on his agenda.

ERA: Why do you think you are the right person to lead ERA Europe?
The Board felt that the new chairman should be someone who had been a Board member since the beginning. We felt this was important to maintain continuity over the key projects that we have open. I was one of a few members who had been active for a few years in the Board’s agenda.

The chairman really can’t do anything by himself though-what’s most important is to have a synergy across all Board members, and this is something that we’ve had in the last three years. That’s why I felt the Board extension from six to 14 members was actually more important than the individual identity of the chairman.

But, of course, this is still a great honor for me personally!

ERA: What do you see as priorities for ERA Europe to accomplish this year?
The major achievements of ERA Europe in the last two years have been:

• Completion of the self-regulation program, and
• Defining a solid industry position in regard to the expected changes of the EU Directive on Television Without Frontiers (TVWF).

This directive will become law in all EU member states after 2007 and is one of the most important pieces of legislation for the TV shopping industry in Europe today. We’ll continue to explain our position to opinion leaders within the EU institutions.

These two initiatives will define for the most part our priorities going forward. On the government affairs side, the self-regulation program is already giving our industry much greater credibility, and we are currently heavily focused on implementing enhancements to further improve industry business practices and increase consumer confidence. Other priorities include growing the number of association members and expanding beyond the core DRTV market to reach other types of e-retailers.

ERA: I understand that DRTV in Europe is regulated by the Television Without Frontiers Directive. Give me an overview of this legislation and its impact on the European DRTV industry.
Essentially, the TVWF Directive concerns broadcasting as a whole in the EU, dividing it into two categories: 1) linear services for traditional television with controlled schedules); and 2) non-linear services, such as web television content or programming for mobile phones. The core of the current proposal is to establish that the EU’s 25 member states ensure that no audiovisual media incites racial hatred, and takes appropriate measures to protect the physical, mental and moral development of minors.

In terms of advertising, the recently updated directive aims to clarify existing EU rules surrounding product placement advertising, which is banned outright in the UK, Germany and France, but is legal in the U.S. Advertisers could pay for their branded products to appear in television shows, with the exception of news and children’s programs, according to the updated directive, but advertising sponsors must be identified at some point during the show.

There still are many grey issues surrounding different types of content, different platforms and so on, but this is why it is extremely important for ERA to be closely involved in the ongoing consultative process with the EU.

ERA: What are some of the latest trends impacting the European direct response industry?
One very important trend is the increasing number of TV channels. Most of them are thematic cable channels, but there is constant growth of local terrestrial channels, as well. Due to technological developments we are seeing the first IPTV platforms and channels (Internet protocol television) and further growth of digital television platforms. If you add to that the steep increase in the number of Internet users across the continent, you have more media available than any time before.

Another important global trend is the shifting focus of large advertisers and marketers from general advertising models based on 30-second spots toward more measurable models of marketing campaigns. It brings us to the situation where big ad spenders are looking for more relevant commercial messages for their consumers and more and more they are looking for direct response tools. All that brings the direct response industry in the focus of multichannel strategies which we read about every day.

ERA: The U.K. is the current “hot spot” for DRTV. What other European markets do you see emerging and why?
Russia is an emerging market because of its size and the expected development of satellite and cable platforms, provided that contrary regulation on media access does not annihilate these opportunities. Creating a unified broadband network in Moscow and the Moscow region is a key project for Central Telegraph, one of the area’s largest telecommunication companies providing the full range of telecommunication services. In three years, it is expected that the network will grow from its current base of 700,000 apartments across 25 districts in the city to connect 2.8 million apartments.

Italy, Poland, Romania and Ukraine are developing the fastest, technologically speaking, however, this doesn’t necessarily mean that they will be the largest markets. Germany remains the biggest market but with limited growth.

ERA: Direct response marketing is enjoying significant interest in the States from traditional marketers who are looking for demonstrable ROI for the investment of their marketing dollars. Have you seen similar interest in Europe? Why or why not?
Generally speaking, advertisers are finding that “traditional” advertising models are becoming less effective. Due to increasing segmentation of the marketplace, they are looking for measurable returns on investment, and that’s why they are testing DRTV. However, while at the moment they are still victims of the old model, it is just a question of time until we’ll have them as competitors.

It is becoming increasingly true that DRTV is moving closer to traditional image-based advertising but, even more significantly, it is true to say that traditional advertising is increasingly using and making more prominent what are recognized as traditional DRTV techniques, such as testimonials, calls to action, and of course, a clear and demonstrable ROI.

ERA: Why should U.S. direct response marketing companies stay informed about what happens in the international marketplace?
Today, there is only one market-the global one. We all impact each other.

ERA: What trends in the European DRTV market do you think will translate to the U.S.?
Satellite television is already doing well, and interactive “point and buy” television will increase in both territories. Mobile marketing is going to become bigger in the U.S.; in Japan and Korea it is already massive.

ERA: Some ERA members may think that at 60 members, ERA Europe is not large enough to affect industry change in a meaningful way. How do you respond to that?
It is true that we are always trying to encourage greater membership, but for the health of the organization, and the industry, it’s certainly much more important for us to have honest marketers than a lot of them.

ERA: ERA’s Counterfeiting Fact-Finding Program was launched at the annual convention in September. How big a problem is counterfeiting to direct response retailers in Europe?
This is one of the biggest problems across the industry today, and in Europe it’s no different. So I welcome the program, and we in ERA Europe look forward to doing all we can to counter the threat.

Paige H. Muller is ERA’s vice president, marketing communications. She can be reached at (703) 908-1020, or via e-mail at [email protected].