Can 02 provide the Dome with a future? Don't bet against it

Marketer supreme Peter Erskine took a defunct telecommunications brand and turned it into a massive commercial presence. He tells Ian Burrell how he plans to pull off an even more unlikely coup
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After the toe-curling experience of the Millennium Dome - with its escalator rides up the elbow of a giant model of the human body - why would any media brand want to be associated with such a notorious turkey?

And yet O2, one of the great media branding success stories of recent years, is rushing to tie its colours to the ungainly yellow masts of Britain's most famous white elephant.

The Dome will be known from next summer simply as "The O2". This remarkable tie-up has been signed off by O2's chief executive, Peter Erskine, one of Britain's master marketers, who has taken fusty old BT Cellnet and turned it into cool O2, outstripping rivals in terms of customer growth.

What is Erskine playing at? "One of our core values is, be bold," he says, admitting that O2 had needed a lot of convincing that the Dome had a viable future. "Not irresponsible, but be bold. What we're going to see with the Dome when it launches next summer is a very powerful venue for music - loads and loads of bands coming there."

The phone company will send music and pictures from gigs direct to the handsets of customers. In addition to the feelgood factor of being associated with music, O2 also hopes to gain kudos from hosting cult sports such as volleyball and ice hockey in the building.

Erskine, 54, named last month by Marketing Week as "Marketing CEO of the Year", has the golden touch. No sooner had he clinched the deal to brand the Dome than London landed the Olympics and his new acquisition had been identified as an ideal venue for some events.

This is someone with an eye for a promotional opportunity. A Tottenham Hotspur supporter, Erskine's sense of brand values meant he had no hesitation in aligning O2 with the club's arch-rivals. "Arsenal did beautifully for us because they won a lot of stuff and were a clean team," he says, admitting that, just like with the Olympics, he had got lucky.

"As well as them being extraordinarily successful, the last year at their [Highbury] stadium coincided with our last year of sponsorship and was an enormous opportunity, with new O2 shirts being made and lots of pictures published of the old stadium." Even though Arsenal has switched its shirt sponsorship to Emirates, O2 continues to be the club's mobile phone sponsor.

At Twickenham yesterday, spectators following the efforts of the England rugby team were absorbing the other key strand in O2's sports marketing strategy. This deal is another example of Erskine's astute positioning, or his good fortune, coinciding as it does with England's first-ever reign as world champions.

"One of the cleverest things we ever did was on the day England came home, when the bus had O2 everywhere. It was the return of the victors."

Erskine comments that, with the company's various partnerships (it also backs the European Ryder Cup golf team), it is very rarely that the sports pages do not carry some free O2 imagery.

The contract runs until the World Cup at the end of next year and when England play Ireland on 24 February both teams will be wearing the O2 logo. "I'm very proud that we have made the O2 customer quite privileged at these rugby events. There's an enormous hospitality place for all O2 customers, not just Mr Big Fat Corporate. All you have to do at Twickenham is show your phone is O2 and you can go in and get a free sausage and mash and a free pint. They love that."

These smart tricks - the privileged "blue spaces" for O2 customers at the Hyde Park Wireless music festival, the downloads from Dome gigs, bangers and mash at Twickers - epitomise the lessons in customer relations that Erskine has learnt in a lifetime of marketing.

After graduating from Liverpool University in psychology Erskine started his career selling Polyfilla to hardware shops before moving to the marketing centre of excellence that is Colegate-Palmolive.

He switched to selling vending machines for Mars, a company that has produced some of the great marketers in British business, such as John Clare (CEO of Dixons) and Allan Leighton (chairman of Royal Mail).

He moved into mobile communications in 1990, when he was headhunted by Unitel (later T-Mobile) and moved three years later to BT, where he really performed his magic after being put in charge of Cellnet in 1998. "Only grey hairs bought Cellnet, young people would not be seen dead with this brand," he remembers.

When Cellnet reemerged as O2 in 2001, nobody in the City gave Erskine a hope. It is now the UK's fastest-growing network with 17 million customers.

Erskine brought in ad agency VCCP, which has produced a series of campaigns using calming imagery of air and water.

By the time O2 was sold to Spanish company Telefonica last year its value had risen to £18bn from £6.5bn when it demerged from BT four years earlier.

Meanwhile Justin Timberlake has been confirmed as the first performer at The O2 next July. "Anyone will tell you, we are the company with the most momentum," says Erskine. "We really are on a roll."

Peter Erskine will speak at The Power of Brands, The Marketing Society conference, sponsored by 'The Independent Media Weekly', at the Grosvenor House Hotel, London on 21 November.