He joined AT&T in January, after a 16-year agency career, most recently as senior VP-managing director for D'Arcy Masius Benton & Bowles' Latin America region.
Mr. Burnett is managing a major consolidation of AT&T's agency lineup, both general advertising and direct marketing.Advertising Age Senior Reporter Gary Levin at AT&T headquarters in Basking Ridge, N.J., about -
Advertising Age: As the long-distance market has grown more competitive, what role is direct marketing playing?
Mr. Burnett: It really gives us direct access into the home to build a relationship with our customers. And therefore it is a major way in which our customers learn about what we have to offer. It's part and parcel of the total range of communication vehicles. We use both inbound and outbound calling, direct marketing and, obviously, paid media-television-and public relations ...in the marketplace.
AA: Would you say direct marketing's role has increased in the wake of increased competition, or has it remained about the same proportionate to other forms of communication?
Mr. Burnett: Actually, I would say that direct marketing has increased disproportionately to the other vehicles that we use. And, really, it is not as a function of the increased competitive environment, but because direct marketing has some unique strengths.
We want to segment our market more; we want to learn more about individual customers; we want to really serve our customers by giving them very specific products and services. Direct marketing is probably the most effective way in which we can reach customers and establish a relationship with them.
AA: How is AT&T moving to integrate what it's doing in direct marketing with other areas like advertising and sales promotion?
Mr. Burnett: One of the most visible things we've done is how we've termed my job. [Previously] the direct marketing and advertising functions were separated. What we've done is integrated from a job function standpoint all the advertising media and direct marketing functions.
AA: Do you have a progress report on reaching that goal?
Mr. Burnett: So far, so good. I believe we have made progress. Partially because we're asking the question, and we're really thinking about it when we do advertising campaigns, or direct-marketing work. We're saying how do those relate to each other?
I ask that question when I review materials; my people ask that question-because we understand that integrated communications is extremely important and it's something that is part of the role of what we do here at AT&T.
AA: Can you give me an example of integrated direct mail and advertising, where before you may have handled it in a parallel way?
Mr. Burnett: We've used animation very successfully in TV [advertising] and the direct-response TV portion of our campaigns. Normally when people respond to DR TV we have to send them direct mail, what we call fulfillment....
Before, from a creative standpoint, the creative materials in the response fulfillment bore no relationship to the TV that generated the response in the first place. We've now integrated the same characters in animation that we use in television into our direct-response fulfillment. So the same sort of characters you see that generated the call in the first place will show up in the package material you receive two to three weeks later in response to your call.
AA: What is the value
Mr. Burnett: Honestly, I think it is simplicity and clarity. There are a lot of messages going out in this industry, there's a lot of competition; simply the fact that a consumer will see not only the same message content but message vehicles from one part of communications to another ... makes it easier for them....
That is one of the goals of integrated communications, because in this complicated world, adding complication on top of the competitiveness is really not in our customers' interest.
AA: How has integration affected your agency relationships?
Mr. Burnett: It has done two things. The more we look at integration, the more we feel we should consolidate our agency relationships into a small number of strategic partners. And you've seen this, in the fact that we've gone through a series of reviews in the last year in order to select a much narrower group ... of more important partners to deal with. The second is it affects us in the way we brief agencies. Now when we talk to an agency about a project, we talk to them about how their answer to that brief will affect other marketing vehicles. And so they have to think more holistically when they think of a creative assignment....
AA: On the direct-marketing side, you've named Bronner Slosberg Humphrey and Wunderman Cato Johnson to handle the vast majority of your needs. How do those two companies alone manage the vast business AT&T has in this area?
Mr. Burnett: Both have tremendous depth and range of resources. I think the other thing that allows them to handle it versus the multiple agencies we used to have is that we are increasingly-again for the purpose of simplicity and clarity with our customers-really changing the nature of the project work that we conduct.
It used to be that we would do a large number of projects. Today, we are narrowing that down to fewer projects with many more constituent parts.
So therefore our agencies deal with much bigger programs in terms of size, but fewer programs.
AA: Any other differences?
Mr. Burnett: The nature of their relationship with us is a strategic one, and that's extremely important. I believe that in the past AT&T [dealt] with direct marketing agencies as suppliers of project material. And we've really changed that. We're letting both of these partners [get] much more information on our company; having them think more broadly about the strategic issues we're dealing with....
The important part is that they're part of a small list of strategic partners and they'll be doing a variety of projects without simple labels.
AA: How is AT&T using strategic databases and other marketing information Our intent in using databases and information is really very simple, and that is in a more competitive marketplace we need to satisfy the customers better than our competitors.
And one of the ways we can do that is by understanding more about what our consumers want. And as the range of products and services expand in this category because of technology, we need to know more and more about what people want, and what kind of range of products and services they need.
So we're really using those databases to better understand the range of needs of different segments of the market, so we can tailor offers to them that they want, and that are frankly superior to our competitors.
AA: You mentioned tailored offers, It's fewer offers to any individual customer. That doesn't mean the range of offers might not be greater, across the board.... So, instead of just doing a range of products now, we'll probably do fewer categories of products even though the way we mix and match those products for an individual segment, that complexity would probably go up.
AA: Does that mean less overall volume in terms of mail activity?
Mr. Burnett: It's hard to forecast. Our intent is to have individual customers get less mail, across the year. And to get mail which makes more sense, in terms of the sequence in which they receive it..*.*.
We believe, or hope, that the amount we would mail would go down. But what were really looking for more than anything is a change in the character of how we communicate with our customer. Again, really focused toward building a relationship with that customer instead of just trying to sell them a series of products.
AA: Has the notion of loyalty marketing become a more crucial one to AT&T?
Mr. Burnett: We introduced "True Rewards" because we want to reward loyal customers and have them build relationships with us over time.
Churn is really where customers go out and come back from different companies, and that is a concern in our industry. It's really not good for any of us to have excessive amounts of trading between companies, and we hope we provide products and services which will have our consumers want to stay with us.
AA: Your background isn't in the telecommunications business. How does your background as a general agency strategist help in terms of bringing new perspective to the business?
Mr. Burnett: Hopefully I'm learning the telecommunications business by immersion, which is what I think you get here at AT&T. But really it's a combination of two things.
Coming from the agency side and from working with different clients gives me a broad perspective on a variety of markets. And I think that is helpful; I'm used to competitive markets.... And being used to competitive markets, and consumer markets, gives a healthy and good perspective when you come into the "real league" competitiveness that we have here in telecommunications.
But by the same token, ... this is a very complex industry and it is very important for me to reach out to all the professionals who were at AT&T before me, and who really know this industry.
I have a personal belief, and that is that the combination of people like myself, who come in with a fresh perspective from the outside, and the terrific people within AT&T, who know this business in all it's complexity-the combination is extremely effective....
The combination is dynamite. I think our marketplace, as we've experienced in the last year, is showing how good it is.
AA: Would you say the core long-distance service is being marketed differently, almost like a packaged good now as opposed to a service?
Mr. Burnett: It's hard for me to have a long historical perspective. I think there is an increasing recognition-I don't know if it's a packaged good but it is definitely a consumer good. And not to make a distinction between products and services, there is no doubt that the consumer is king in the telecommunications category....
The emphasis on the consumer is becoming greater and greater because the consumer is more and more in control of these decisions.
AA: As a relative newcomer to AT&T, what's your view of how the long-distance wars have changed over the last several years?
Mr. Burnett: They've changed in the extent that we're winning in a way we haven't previously, and I think that is very good. And certainly heartening from our perspective.
The big change ... in terms of the structure of the industry [is that] technology is going to open a world of consumer choice.... That opens up a tremendous opportunity in terms of developing products and services and giving the customers a lot of new capabilities that they haven't had.
So while the day-to-day fight is tremendously competitive, I look out into the future. The real competitiveness for the industry is ... coming in the future. So if you haven't gotten enough sleep yet, watch out, because it's going to be a bigger battle. And frankly, I think the consumer is going to win.
AA: AT&T has been active with interactive TV tests. And consumer choice is an issue, consumers themselves deciding what they want to do and what they want to respond to. Does all this portend a greater importance for direct forms of communication?
Mr. Burnett: Absolutely. The competitive advantage in this market will come from people who really understand direct communications, and who have the information ... to build relationships with customers.
We're really in an exciting time, and a lot of these interactive trials are in their infancy. ... I don't think there is any question that a lot of the things that we talk about today will [get to] full bloom.
The question really for all of us in our working lives is, does it come in the next five years, in the next 10 years, or in the next 15? But I don't think that there is any doubt that it is going to come. It's just really a question of how quickly the technology develops, how quickly people really understand not the technology, but ... what they want. And how quickly we get a rate of adoption among them....
The world of interactive, the world of direct communication to the customers, is really going to be the world of the future.
AA: Has the issue of consumer privacy been raised by customers, and is this something AT&T is addressing?
Mr. Burnett: The issue of consumer privacy is always an issue when you're in the telecommunications business.... As we get into the future which we've talked about, which is into an interactive age, into a "smart card" age, with more and more information on the consumer going through single sources ... new levels of how we deal with customer privacy are going to be very important....
Part of what these interactive tests are about are not only consumer acceptance but how we treat the information we learn about consumers.M