CLOSE-UP: LIVE ISSUE/INTEGRATION - Agency giants decide the future is through the line/O&M, Bates and M&C have different integration plans Report by Eleanor Trickett.

By ELEANOR TRICKETT, campaignlive.co.uk, Friday, 30 April 1999 12:00AM

Typical. You wait for ages for a big advertising agency to come up with an exciting direct marketing story, and then three come along at once.

Typical. You wait for ages for a big advertising agency to come up

with an exciting direct marketing story, and then three come along at

once.



After months of silence following last year’s flurry of start-ups and

mergers, three giants - Ogilvy & Mather, Bates Dorland (or Bates UK as

it is now known) and M&C Saatchi - have radically shaken up their

through-the-line offer (Campaign, last week).



And just to irritate the would-be pundits that love spotting a trend,

they have each done it in a completely different way.



In a nutshell, O&M uprooted OgilvyOne from hip ’n’ happening Clerkenwell

and dragged it kicking and screaming to Canary Wharf (though loyal

staffers claim it’s a ’good thing’); M&C Saatchi put us out of our

misery after months of speculation and announced it was setting up a

direct marketing agency and Bates Dorland bought the below-the-line

consultancy, Blue Skies, merged it with its existing below-the-line

operations, Bates Communications, Bates Interactive and the sales

promotion shop, 141, and put Blue Skies’ Graham Green on the main

board.



All three moves have an element of expediency about them. O&M’s global

reputation for 360-degree thinking will be well served by having its

above- and below-the-line operations together in one building. M&C

Saatchi needed its own solution because its ’village’ relationships with

Craik Jones and Claydon Heeley were on the wane, and Bates’s

below-the-line interests appeared to be doing better than its

above-the-line ones.



O&M’s incoming chairman, Paul Simons, explains: ’Ogilvy Worldwide has

been moving towards an increasingly integrated model - New York is a

great example. Having everyone in place is central to our core strategic

thrust.’ He then adds, wearily: ’Once the Jubilee Line extension is up

and running, that will be the end of the debate.’



For M&C Saatchi, it is about time. The agency has dithered for ages

about its below-the-line plans and has been in discussions with all and

sundry - agencies and industry players - for some months. Right up until

the venture was announced, it was still unclear whether it would simply

buy an existing shop or try to form something from scratch.



With the model it has chosen - a DIY approach with Craik Jones’s Lisa

Thomas at the helm - it would do well not to follow the example set by

BMP DDB and its first attempt at direct marketing in 1997, when it

half-heartedly recruited a handful of (admittedly top-whack) specialists

to sit in a spare corner of the office.



M&C Saatchi must also be hoping that the two people overseeing the

operation, the joint chief executives, Nick Hurrell and Moray MacLennan,

have learned from their previous foray below the line. While at Saatchi

& Saatchi, they were instrumental in setting up Saatchi & Saatchi Direct

in 1986, which soon became an industry joke. MacLennan now admits: ’Our

heart wasn’t in it.’



M&C Saatchi is on the back foot to start with as an embarrassing leak

forced it to announce the operation before all the partners had been

recruited.



Nonetheless, Thomas’s reputation in the industry - and especially her

history with Rover - is obviously very appealing to the agency, which

has yet to win a car account.



’The combination of our brand, the right people and identifying the need

in the marketplace gives us a good chance of success,’ MacLennan boasts,

while admitting that the way it develops will be left almost entirely up

to Thomas.



Much has been made of the demise of M&C Saatchi’s ’village’ relationship

with Claydon Heeley. However, only three significant accounts are shared

between the two: Bradford & Bingley, the Millennium Experience and the

London Tourist Board. Moreover, the contracts Claydon Heeley holds with

those clients are entirely separate from M&C Saatchi.



And it is unlikely that Claydon Heeley and M&C Saatchi will be working

together for much longer. Hurrell’s comment that sales promotion

business could be referred to Claydon Heeley appeared to infuriate the

below-the-line agency: ’We won’t be hanging around in the village any

longer - we’re not a sales promotion shop!’ one senior employee

bristled. And it can safely be assumed that Bill Muirhead’s position as

a non-executive director of Claydon Heeley will be short lived.



Bates’s move is the one most under the microscope - not least because of

the furore it has sparked in its below-the-line shops, whose senior

management are aggrieved at the abrasive Green being brought in over

their heads.



The Bates party line is that a large number of clients want an

integrated offering and merging the London agencies will create a

one-stop shop.



But a slightly less positive reason has been mooted by observers. While

separate profit and loss figures for Bates’s component agencies are

unavailable, it is widely contested that the performance of Bates

Communications and 141 has far overtaken that of Bates Dorland.



Like M&C Saatchi, Bates has been charged with not knowing anything about

below the line. One observer says: ’The only way an integrated offering

will work is if the personalities are right and there is commitment from

the top.’



It would be presumptuous to question the commitment of Dorlands’

chairman, Graham Hinton, but the strategy has a whiff of rearguard

action about it. And as for the personalities involved, the ones that

have been running a successful below-the-line show for some time are

beating a path to the headhunters. Hinton remains tight-lipped over the

merger but it’s a dead cert that this one will run and run.



This article was first published on campaignlive.co.uk

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