LIVE ISSUE/BUPA: Bupa seeks personal touch from smaller agency - The medical insurer aims to adopt product-led ads, Francesca Newland finds

By FRANCESCA NEWLAND, campaignlive.co.uk, Friday, 04 December 1998 12:00AM

Bupa has rounded off a year of transition by parting company with the Ogilvy Group. The move appears as much a reaction to pressures within the healthcare insurance market as it is to dissatisfaction with Ogilvy & Mather’s work.

Bupa has rounded off a year of transition by parting company with

the Ogilvy Group. The move appears as much a reaction to pressures

within the healthcare insurance market as it is to dissatisfaction with

Ogilvy & Mather’s work.



It is believed that the company is intending to replace O&M and its

’you’re amazing’ campaign with a smaller agency and product-led

advertising. And the pounds 4.7 million adspend will probably be reduced

as financial pressure hits the marketing department.



Bupa is the biggest player in private medical insurance with a market

share of about 39 per cent, but its lead over the number two private

medical insurer, PPP, is narrowing.



Since PPP was acquired by Guardian Royal Exchange last year, its market

share has risen to about 33 per cent.



The narrowing of the gap between the two players has occurred against a

backdrop of static subscription numbers of about six million, which have

characterised the market for the past ten years.



As a result, the management at Bupa has had a call to arms, spearheaded

by the new chief executive, Val Gooding. She has instigated a

restructure which will see the company’s business separated into five

distinct units - insurance, hospitals, care homes, Sanitas (its Spanish

subsidiary) and new businesses such as dental insurance.



She also appointed Pat Stafford, then managing director of the marketing

consultancy, Corporate Positioning Services, as marketing director a

year ago.



Under Stafford, promoted to group marketing director in July, the

marketing team has grown substantially. New appointments include Simon

Sheard as brand director, Eileen Folan as head of marketing planning and

intelligence and Elaine Greenwood as director of UK membership.


Bupa is looking for advertising, media buying and direct marketing

agencies, opting against the centralised approach it took with the

Ogilvy Group.



The new above-the-line agency will have a much-reduced role compared

with that of O&M. Strategy and brand development will no longer be

handled by the agency. Instead, the greatly expanded Bupa marketing

department intends to take more control of its brand.



Creating a strong brand may prove difficult when there are so many

marketing directors - a lot of them new - pulling it in different

directions. As one advertising executive says: ’I am rather alarmed at

the number of people in the marketing department.’



According to a spokeswoman, the company has a shortlist of ad agencies

in mind, but they have yet to be contacted. However, it seems Bupa is in

talks with several agencies. As one agency boss says: ’It is such a big

marketing department, and each of them will have two or three pet

agencies.’



The spokeswoman says: ’We want an agency whereby we are an important

client to them.’ This highlights a certain dissatisfaction with O&M’s

treatment of Bupa, but it also hints that the company is looking for a

smaller agency - outside the top 20 is the most regularly quoted size

indicator. One agency source puts it another way, saying Bupa is looking

for an agency it can ’beat up’.



The review out of the Ogilvy Group is widely believed to have come out

of a desire to cut advertising expenditure. The enlarged marketing team

must be costing the company more than it is accustomed to, and the

looming recession is likely to have instilled fears of reduced

margins.



But Bupa risks a false economy by using three separate agencies for

media, advertising and direct marketing as it could lead to an

overlapping of tasks, not to mention inconsistent branding.



Its predicted shift to product-led advertising will not lend the brand

the support it is used to. One observer says: ’I fear Bupa may end up

spending a lot less on the brand. If you are going to advertise it as a

major player, you need to spend pounds 5 million on the brand. The true

solution is to spend pounds 10 million.’



Bupa’s relations with O&M have been strained for more than a year. The

former marketing director, Bruce Tranter, left the company in October

1997, soon after news leaked that he was talking to several London

agencies - news which Bupa vehemently denied.



His was not the only review: Stafford began talking to agencies - BMP

DDB and TBWA GGT Simons Palmer - in the spring and after three months

reappointed O&M to the business.



This chequered history leads some observers to conclude Bupa is a

’nightmare client’. But it also highlights that the review out of O&M

has been a long time coming and is not just a whim of Stafford’s.



Put against the background of losses this year - Guinness, Ford, Ryvita

and Warburton’s - it seems fair to assume O&M is doing something to

alienate its clients. One source close to Bupa accuses O&M of

’arrogance’. He says: ’It doesn’t seem to communicate to its

clients.’



O&M was appointed to Bupa’s account in 1992, but it wasn’t until 1996

that the company launched the ’you’re amazing, we want you to stay that

way’ drive. It appeared one year after Peter Owen, the chairman of PPP,

unveiled plans for a relaunch of the PPP brand.



Creatively, the campaign was successful. It kept Bupa at the forefront

of consumers’ minds at a time when PPP was spending three times as much

money on its relaunch through M&C Saatchi.



Patrick Collister, the executive creative director at O&M, says: ’I was

thrilled to be associated with producing distinctive, award-winning

advertising, which built a brand. Bupa has become an eponym. We have

been responsible for changing the market.’



His opinion is seconded by Steve Henry, the creative partner at HHCL:

’It was a beautiful branding campaign. It was distinctive and applicable

across a range of media. It had power. It will be a real shame if it

isn’t continued.’



The agency the company eventually chooses will have a tough task ahead.

It will be confronted with a newly formed, multi-faceted marketing team

and a very restricted brief.



This article was first published on campaignlive.co.uk

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