Close-Up: Live Issue - No sign of slowdown in turnover of top marketers
campaignlive.co.uk, Friday, 06 August 2004 12:00AM
Churn rates have a negative impact on brand strategies. Emma Barns finds out why. Mike Moran hit the headlines last week when he exited as the worldwide director of marketing and strategy at Thames Water, a post he had held for just 18 months. Meanwhile, Zoe Morgan announced her defection from HBOS to the Co-operative Group (after 15 months) and it emerged Simon Waugh was leaving Centrica.
And that was just last week. Orange, the BBC, BT and Sony PlayStation have also experienced upheaval recently as their respective marketing directors - Jeremy Dale, Andy Duncan, Amanda Mackenzie and David Patton - either departed or moved on through promotion.
So what is the effect on agencies and how much does it damage a brand's consistency? Each time a marketer moves, uncertainty is felt by the agencies of the new and previous client company. Agencies, naturally, fear a review.
Andrew Harrison's first step when he moved from Nestle to Muller earlier this year was to call a pitch. And Jerry Wright promptly reviewed out of McCann Erickson when he arrived at Birds Eye last summer.
But even if the new client is not necessarily plotting a pitch, he or she will be targeted aggressively by a stream of hungry new-business directors.
They pour over Ammo, a weekly list of outgoing marketers, in search of fresh opportunities. For instance, the rumours surrounding the prospect of reviews at Orange and Sony, which both have new marketing heads, are reaching fever pitch.
Client changes are a wobbly time for the incumbent agency on the account - huge efforts are required to court a new marketer and to fend off the advances of their competitors.
Peter Cowie, the new-business director at J. Walter Thompson, likens this to having to repitch.
"A huge part of the agency job is building your client's trust and respect. A happy client means a secure account and it takes a while to earn your stripes," he says.
There is the distinct possibility that the work will suffer during this uncertain period. As one source says: "The agency can lose confidence and, to please the client, may not push as hard or do such challenging things." He cites Mother's current output for Orange as an example.
However, there can be advantages for the incumbent. Andrew McGuinness, the chief executive of TBWA\London, says: "A new marketing director will have a clear, objective view and churn means there is constant reassessment of the brand and new energy is injected into it."
He adds: "If the agency is strong and is adding value to the business - and if the marketing strategy is on course - then a new marketing director may not change things."
Martin Jones, the director of advertising at the AAR, believes most new clients will not call a pitch for the sake of it. He says: "Choosing a new agency is not something the vast majority of clients want to do. It can waste time and costs money - and it takes their eye off the ball."
Another more important question for companies is what sort of effect does marketing-director churn have on their brand?
Problems arise over time if marketing directors change frequently. The absence of a long-term brand guardian leads to a gradual decline in marketing coherence and an inconsistent message.
Malcolm Earnshaw, the director-general at ISBA, says: "Marketing demand is often for short-term action but brands need gradual, gentle nudges and plenty of thought in order to change. Lots of knee-jerk changes in direction by different marketing directors will trash the long-term brand and won't sustain long-term growth."
However, Tom Knox, the joint managing director of Delaney Lund Knox Warren & Partners, counters: "Brands don't change much in 18 months. They are more robust than marketing directors."
So with all the obvious disadvantages, why do marketing directors change so regularly?
"Often it is not the marketing director's choice. The company and the chief executive make the change," Cowie says. Earnshaw agrees and explains: "Marketing directors are often hired in the context of a publicised crisis and the demand is for a quick fix. They need to be given time to invest in a big idea but shareholders want immediate results."
The cycle continues when the marketing director fails to make a significant impact after 18 months and moves, or is moved, on.
The ease with which these staff changes can be made has been facilitated by the greater mobility of marketing directors. One source says: "Marketing has become a portable skill, rather like finance. No-one raises an eyebrow if a marketing director goes from Rentokil to Diageo to Bristol Zoo. This has led companies to think they can easily fix their troubles by firing their marketing director and hiring a new, high-profile one."
It is no coincidence that some of the most successful and highly regarded advertising is the result of long-term marketing strategies, implemented by marketing directors who have been with their companies for long periods.
Tim Mason has been the marketing director of Tesco for nine years, while Andrew Marsden has led Britvic's marketing department since 1997. Unilever, Procter & Gamble and PepsiCo all have strong marketing departments with stable strategies.
Despite the drawbacks, few people hold out any hope that the turnover of marketing directors will slow. "It's a spiralling thing and as one marketing director leaves there is the obvious, knock-on effect that that company will have to look elsewhere for another one," Cowie says.
Agencies, however, cannot take the moral high ground when it comes to staff churn because senior advertising managers and creatives experience their share of employee turnover.
McGuinness believes such levels of mobility are part of a wider social trend. "It has much to do with the fact the leadership of companies is getting younger," he says. "This fuels people's ambition and everyone is scurrying upwards to get to chief executive positions by their mid-forties."
So as long the City requires companies and brands to deliver immediate results - and while a marketing director is only as good as his or her last ad campaign - this trend looks set to continue.
NAME FROM TO WHEN (2004)
Simon Waugh Centrica n/a July
Zoe Morgan HBOS Co-operative Group July
Mike Moran Thames Water n/a July
Andy Duncan BBC Channel 4 July
Amanda Mackenzie BT HP June
Jim Hytner ITV Barclays June
Jeremy Dale Orange n/a June
Simon Gulliford Barclays consultancy May
David Patton Sony PlayStation Sony March
Andrew Harrison Nestle Rowntree Muller Dairy January
This article was first published on campaignlive.co.uk
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