Close-Up: Live issue - A noticeable lack of high-points in a Lowe year
campaignlive.co.uk, Friday, 05 December 2008 12:00AM
Leaderless and haemorrhaging clients and staff, Lowe London is in desperate need of a change of fortunes, John Tylee says.
It seems as though nobody wants to be up close and personal with Lowe London these days. Not the former staffers who excluded anybody who wasn't involved in the agency's perceived golden age from its recent reunion at a pub in Knightsbridge.
Not those one-time clients who have exited in dismay at the power struggles and perpetual senior management changes that have bedevilled Lowe in recent years.
And not even Ed Morris, its executive creative director, who is reverting to a consultancy role because he is said to want to move away from direct involvement in an agency decimated by huge account losses and sustained mostly by globally aligned business.
Others argue that Morris' altered status is simply a reflection of the extent of the changes at Lowe since he accepted a three-year "golden handcuffs" financial package worth more than £1 million for not following the £50 million Tesco business into Sir Frank Lowe's The Red Brick Road in 2005.
That agreement, described as "madness" by one ex-Lowe senior manager, expires at the end of the month, leaving him free to effectively do what he wants.
The most pressing priority for Morris in his new position will be to try to stop the £20 million John Lewis account, currently up for pitch, from leaving the agency.
This will be far from easy. Not least because the retailer is known to be very close to Morris and wants affirmation of his continued presence at the agency - something his new title doesn't offer - but because it is also concerned about the agency's instability, its infighting and its lack of clear leadership. It hasn't even had a chief executive for the past year after it parted company with Amanda Walsh.
Recently, an insider says, focus on globally aligned clients such as Unilever and Johnson & Johnson has caused UK businesses such as Twinings to pull the plug, fearful that their business was no longer seen as sufficiently important.
Steve Gatfield, the outgoing Lowe Worldwide chief executive, even said in a piece in Campaign earlier in the year that the real money was in the network clients, so it's hardly surprising if domestic business felt undervalued.
Vauxhall, owned by the troubled General Motors, the Rugby Football Union and modest amounts of COI work - which will come up for review in February - are the only domestic accounts remaining at the agency.
It has also been the victim of its often vicious internal politics with the infighting reaching a crescendo in the fractious relationship between Walsh and Tony Wright, the network's chairman and the pivotal link with Unilever. "The two took an instant dislike to each other," an insider says. Another claims Walsh "underestimated the sensitivity of the global set-up".
Much of the friction is believed to have been sparked by the power of the Unilever global account directors reporting directly either to Wright or Gatfield and not the London management team.
"We operated as two agencies in competition with each other," a former senior staffer recalls. "Those running the agency who thought they were responsible for business actually found that they weren't."
This sort of thinking has led to loss of talent. Another ex-Lowe staffer adds: "They just get chewed up by the system and spat out."
Many see the management revolving door of recent years and the lack of clear leadership as the main reasons why talent and business have left the building.
Sharing the front-of-house roles between Morris and Rebecca Morgan, the agency's planning chief, does not, it is claimed, make up for the lack of a chief executive to act as the clients' lightning conductor, while persistent rumours of their plans to launch a start-up have done nothing to steady the ship.
Despite all of its problems, Lowe network chiefs are indicating that the managerial gap will be filled early next year in a raft of measures to restore Lowe London's equilibrium. However, they insist that the agency will be re-engineered to regain its key role in what is now a profitable network eager to win domestic business as well as service globally aligned clients.
"We're committed to having a successful and creatively strong agency in London," Wright says. "In the first quarter of next year, we'll unveil plans to that end."
This could coincide with the announcement of Gatfield's successor. Two candidates are understood to be in the frame for the role.
With a host of names already said to have turned the job down, it seems filling it is proving more problematic than initially thought.
For the moment, the London agency's future looks to be shaped by two events. One is the John Lewis pitch. The other is the contest for Unilever's £100 million worldwide Knorr business.
Lowe sources claim that were the network to capture Unilever's biggest global brand, which would be run out of London, the revenue would fill the hole created by the split with Stella Artois and the catastrophic loss of the £100 million Nokia N-Series business to Wieden &Kennedy.
Whether or not Morris will remain to see all this through is open to question. He has admitted to friends that he is asking himself serious questions about his future in an agency whose global clientele hold little interest for him.
"Ed is a talented creative but he's not a creative director," a Lowe source says. "He doesn't like working on global accounts or complex pieces of local business."
Another ex-Lowe senior staffer questions whether there is room for him at all now. "Ed is an outstanding creative but if John Lewis goes, you have to wonder if there will be a role for him. The global management teams do a difficult job and would have liked more help from Ed.But he's of no value to them and he hates travelling."
The big question is what will happen to the agency if no client offers a "Get out of jail" card.
One intriguing idea being considered by the top brass is to take the London agency back to its hotshop roots and have it focus on domestic business, while a separate network operation in London services the global accounts.
This new "old" Lowe, not dissimilar to Lowe Howard-Spink, would have the same emphasis on creativity as its predecessor, insiders explain, but be more attuned to a communications world much changed since its heyday.
However, there seems little likelihood now of a merger between the agency and its Interpublic stablemate Draftfcb, which was rumoured strongly.
Bringing the two together under one roof could save between £3 million and £4 million a year, according to one estimate. What's more, Draftfcb has the digital expertise that Lowe lacks.
But there are also drawbacks. Could Unilever and Johnson & Johnson share an agency with SC Johnson, Kraft and Biersdorf, all big Draftfcb clients?
There are several options for Lowe London. But, as events of the past year have proved, doing nothing isn't one of them.
January: Amanda Walsh is forced out as the chief executive after 15 months. Rebecca Morgan, the chief strategy officer, and Ed Morris, the executive creative director, take over in the interim.
February: Innocent moves its £4 million account out.
March: Twinings reviews its £3 million above-the-line account out of the agency.
August: Mother beats Lowe to launch the new 4% Stella Artois variant in the UK. Stella Artois reviews its main ad account and Lowe doesn't repitch.
September: Lowe announces eight redundancies across its creative and production departments.
October: Steve Gatfield confirms he will quit as the worldwide chief executive next April.
November: Lowe loses £100 million global account for Nokia's N-Series to Wieden & Kennedy. John Lewis reviews its £20 million account out of the agency. Morris agrees to a new contract working four days a week in a consultancy capacity.
This article was first published on campaignlive.co.uk
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