LIVE ISSUE/NATWEST: NatWest throws down the consolidation gauntlet But can one agency solve the troubled bank’s image problems? By John Tylee.
By JOHN TYLEE, campaignlive.co.uk, Friday, 29 May 1998 12:00AM
At the beginning of 1996 NatWest swam against the tide by splitting the bulk of its business between two agencies. Now it has indicated its readiness to go with the flow.
At the beginning of 1996 NatWest swam against the tide by splitting
the bulk of its business between two agencies. Now it has indicated its
readiness to go with the flow.
Not only is the bank putting its pounds 50 million-plus above- and
below-the line business up for review, threatening the joint tenure of
its two principal shops, Bartle Bogle Hegarty and Ammirati Puris Lintas
(Campaign, last week), but it is not ruling out channelling the entire
account through one agency.
The only surprise about the move is that it hasn’t happened before. The
fad for a la carte - picking marketing specialists and co-ordinating
their work yourself - belongs firmly in the 80s. In the UK, and the
world at large, consolidation is the name of the game.
’The move towards the global consolidation of agency business seems to
be unstoppable and all agency networks are acknowledging the fact by
becoming more flexible and innovative,’ Harry Reid, FCB’s international
president, says. ’It’s reached such an advanced stage that many clients
would find it almost impossible to unpick such arrangements.’
Sholto Douglas-Home, head of advertising for the consumer division of
BT, Britain’s biggest advertiser, agrees. ’The trend is towards
centralisation and there’s a growing appreciation of its
In part, the momentum towards the centralisation is a by-product of what
is happening in the commercial world in general. With 500 companies now
controlling 80 per cent of the world’s manufacturing output, it’s
logical to expect the trend to be reflected in agency arrangements.
That NatWest is in urgent need of getting its advertising act together
is beyond question. The smallest of the Big Four high street clearing
banks, it suffered a terrible year in 1997 with a 10 per cent drop in
pre-tax profits. Its decline set in during the recession of the early
90s since when it has been an under-achiever, prompting speculation
earlier this year that it might merge with Barclays.
’NatWest is being outplayed by the opposition, its brand awareness
levels are low and its advertising is all over the shop,’ an agency
’It’s very concerned about the situation.’
But whether or not the bank decides to follow the path of Abbey
National, which dumped Barker & Ralston 15 months ago to centralise its
entire pounds 40 million account within Euro RSCG Wnek Gosper, remains
to be seen.
It’s not merely a question of whether such a move would save money. Such
considerations may have kick-started the centralisation movement in the
early 90s, but they are far less relevant today.
’There’s no pressure to save the odd pounds 50,000 any more,’ says Derek
Ralston, the former Barker & Ralston managing director, now a partner at
Mountain View. ’In a growth economy, the aim is to attract the right
kind of customers.’
Consolidation’s big attraction is that it brings consistency to an
organisation’s communications while lessening the burden on its
Dealing with one agency makes it easier for a client to build a
dedicated team which thoroughly understands what can be very distinct
According to Reid, global clients are also increasingly lured to the
idea of consolidation because they feel better able to control their
local subsidiaries if one agency network is ’policing’ their advertising
across the world. Not that it’s a universal panacea. As Ralston says:
’The agency that can produce press ads for you quickly won’t necessarily
be the right one to do your corporate campaign.’
In the case of NatWest, the pros and cons of consolidation have to be
weighed alongside other more specific concerns. The bank operates a
highly devolved structure with business units which have profit
’Once the bank created those units it had to give them the freedom to
create those profits,’ an agency executive familiar with the NatWest
business, explains. ’The result is that the bank now has a number of
agencies working directly to those units and advertising which may bear
the bank’s logo but does nothing to communicate NatWest’s brand
The conundrum facing the bank is how to reconcile the demands of
shareholders, who believe the brand message to be crucial, with the
short-term marketing requirements of the business units.
’The bank is coming round to the view that it needs greater central
control even if it pisses off the business units,’ an industry source
says. ’But in putting its business into one agency, will it necessarily
get the direct marketing and sales promotion services it wants?’
So what is the likely outcome? The smart money is on NatWest drawing
back from a single agency appointment while carving up its advertising
cake differently. That could mean a lead agency with responsibility for
the core brand strategy which it will interpret in print and on
But that agency will also have to ensure the other specialist shops sing
from the same hymnsheet.
This article was first published on campaignlive.co.uk
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