Annual: Review of the year - 2008: the year advertising toughened up

By John Tylee, campaignlive.co.uk, Friday, 12 December 2008 12:00AM

2008 saw the sale of BMB, the birth of Adam & Eve and some long-term partnerships fail. It was also the year advertising officially became part of the creative industries.

Perhaps the most poignant news to emerge during 2008 was that the name Collett Dickenson Pearce, a fixture on the UK adscene for almost half-a-century, would be gone by the year's end.

It wasn't that CDP was still an agency powerhouse. Nevertheless, the disappearance of the CDP moniker (part of a rebranding by its Dentsu parent) was deeply symbolic. Mainly because it marked the end of adland's remaining link with its 60s high summer, an altogether more innocent, simpler and far less corporate age.

Fast forward to 2008, where events have shown just how much old demarcation lines have blurred and how old certainties are no longer certain. Not long ago, it would have been inconceivable that a digital specialist would take command of a mainstream agency's creative department. Yet Grey picked Jon Williams, the head of digital creative at Beattie McGuinness Bungay, to be its creative chief.

And who would have believed that two "mainstream" agencies - BMB and Bartle Bogle Hegarty - would have walked off with the digital golds at the first Campaign Big Awards?

Suddenly it seemed as though everybody was doing everything. Mother went as far as to co-produce a feature film, Somers Town, for Eurostar as well as Pot Noodle The Musical, which ran as part of the Edinburgh Fringe Festival. BBH, meanwhile, launched its own ready meal range.

How effective such initiatives are in building brand or selling product is an open question. Nevertheless, they were symptomatic of an industry alarmed by its wretched financial performance during the year and desperate to exploit new revenue sources.

Nearly two-thirds of the 19 public companies in the marketing services sector monitored by the now defunct research newsletter Marketing Services Financial Intelligence saw their share prices halved during the year.

Even WPP saw a 31 per cent cut in its share value during September, prompting Sir Martin Sorrell, its chief executive, to order a hiring freeze and to predict no lifting of the economic gloom until 2010.

Meanwhile, Michaelides & Bednash, the media planning consultancy, was absorbed into Mindshare, a move financial analysts interpreted as having been driven by M&B's diminishing prospects as an independent.

Bob Willott, the Marketing Services Financial Intelligence editor, said: "Share prices in the sector have not only been depressed by the general market conditions but also have underperformed the market as a whole."

The unease was just as acute among media owners, who cut back and restructured amid warnings about further hard times ahead. The question many were asking, though, was: would this be cyclical with traditional media spend bouncing back in 2010, or also linked to a structural shift in consumer and media habits?

Traditional media owners came to the conclusion that it could be a bit of both as the likes of ITV and News International made swingeing cuts to their commercial departments and continued to put greater emphasis on cross-platform, cross-media trading.

Elsewhere, Publicis bit the bullet on group trading, launching its VivaKi trading arm, under Starcom Media-Vest's Chris Locke and ZenithOptimedia's Chris Hayward, to lead deals with media owners across the group.

The star new-business media performers of the year were Mediaedge:cia and OMD, the former adding the £80 million Orange UK business to a number of other wins to continue its impressive growth, while the latter added the £45 million Boots business to some strong international wins. Nevertheless, 2008 drew to a close with the industry waiting in trepidation to know how the impending storm would impact on jobs. The year had begun with IPA figures showing that the industry's 19,000-strong workforce was it its highest level since the days when CDP was at the top of its game.

Now the fear was that the trickle of redundancies might turn into a flood as agencies wait until the new fiscal year to wield the axe. At the start of the year, things looked very different. One takeover of note happened in February, when The Engine Group, the WCRS parent company, acquired the direct marketing agency Partners Andrews Aldridge and Fuel, its data arm, in a deal worth around £18 million.

Three media agencies also did the business before the economic downturn made it impossible. The first to sell was BLM to Havas in a deal worth around £20 million that saw the agency renamed as Arena BLM. In February, Naked Communications sold to the Australian marketing services group Photon for an initial upfront cash payment of £16.5 million, and then the digital independent i-level was acquired by the private equity group ECI for £45.5 million in May.

Other proposed deals proved more problematic. The private equity group intending to acquire a controlling stake in Creston withdrew from talks having decided to conserve resources during the unstable market conditions.

Similarly, takeover talks between Omnicom and BMB, which had topped the new- business rankings throughout the year, collapsed at the 11th hour. The plan was to merge BMB with TBWA\London, but speculation was that Omnicom chiefs took fright at the $12.5 million lawsuit filed in the US against Carling's parent, Coors, over BMB's iPint application.

Still, by December, BMB had found itself an ambitious partner in the form of the South Korean marketing services group Cheil, which took a 49 per cent stake in the UK agency and laid plans to export the BMB brand first into New York and then key markets around the world.

Quite where Omnicom's aborted acquisition attempts leave TBWA's London outpost remains to be seen. The agency had already said goodbye to Steve Henry, who quit as the executive creative director in July because he thought it wasn't paying sufficient attention to newer forms of advertising.

The paucity of start-ups was no surprise, although Argentina's Santo as well as Arnold and The Brooklyn Brothers from the US opted to try their luck in London. Home-grown ventures included Audacity, launched by the former Nitro executives Bruce Crouch and Liz Addis, and High Five O. The brainchild of the former agency creative chief Robert Campbell and the ex-newspaper marketing director Toby Constantine, High Five O represented adland's stab at connecting brands with a burgeoning over-50s market.

Most of the buzz, though, centred on Adam & Eve, the much anticipated launch by the former management team at Rainey Kelly Campbell Roalfe/Y&R. And the formidable line-up didn't disappoint, capturing Cadbury Biscuits (£3 million), the budget airline AirAsia, the Westfield shopping centre (£5 million) and Lloyds TSB's £10 million brief to promote its sponsorship of the 2012 London Olympics.

However, the year saw some stressful agency-client relationships finally blow apart. Lowe and Stella divorced after 26 years. Nationwide and Leagas Delaney also went their separate ways, before starting talks again after the sudden departure of the marketing director, Peter Gandolfi. But Halifax, Nationwide's troubled rival, opted to keep its £18 million account with Delaney Lund Knox Warren & Partners.

Meanwhile, Maurice Levy, the Publicis Groupe chairman, helped persuade Cadbury to move its £100 million global account out of Publicis in order to bolster Saatchi & Saatchi and Fallon's SSF Group. Alas, it coincided with the not-so-sweet news that Juan Cabral, the Fallon creative partner behind Cadbury's much-lauded "gorilla", was switching his base from London to his native Argentina.

Cabral was one of three leading creatives involved in dramatic change during the year. Political machinations within the Ogilvy Group culminated in the departure of Malcolm Poynton, whose executive creative director role was scrapped. Four months later, John O'Keeffe ended an 18-year relationship with BBH, ten of them as creative chief, to become WPP's worldwide creative director.

More predictable, perhaps, were some other departures. Nigel Jones quit the presidency of the less-than- scintillating Draftfcb London for the chairmanship of the Publicis UK group; Alison Burns, whose future as JWT London's chief executive had been the subject of much speculation, will take a key role at the agency's New York office; Steve Gatfield, the Lowe Worldwide chief executive, steps down next April after a challenging two years spent sorting out Interpublic's problem child.

There were some significant personnel changes among media agencies too. MediaCom, the UK's largest, reshuffled its team as did its parent Group M in a series of related moves. The promotion of the Group M UK chief executive, Stephen Allan, to the MediaCom global chief executive role saw Allan replaced at Group M by Nick Theakstone. Allan subsequently hired the MediaCom UK chief executive, Nick Lawson, to run MediaCom in Europe. Jane Ratcliffe, the managing director at MediaCom, stepped up to replace Lawson.

The merger by BBDO of its Craik Jones and Proximity operations also sparked a number of senior changes within the direct marketing industry. First, the Craik Jones chief executive, Mike Welsh, took on an equivalent role at Publicis Dialog. Then Amanda Phillips left her role as Proximity's chief to pursue other interests. She was soon replaced by the OgilvyOne chief executive, Mike Dodds.

Amid so much change, some of the industry's challenges remained the same. Nevertheless, it showed more proactivity than usual in confronting them, not least in tackling the obesity issue. In July, Baroness Peta Buscombe, the Advertising Association's chief executive (who later quit to join the Press Complaints Commisson), won Gordon Brown's blessing for a £200 million industry initiative to reduce Britain's collective waistline.

But just as obesity doesn't lend itself to an easy solution, neither do the other matters that 2008 showed the need to address. One is how to achieve a more socially and racially diverse workforce at a time when the business, overwhelmingly white and middle class, is in real danger of missing out on the brightest young talent from ethnic minorities who are drawn to medicine, the law and accountancy.

The other is how advertising is supposed to benefit from the Government's apparent love for the creative industries. Some sceptics argue that aligning with other parts of the creative sector under the Creative Britain banner makes no sense for an industry with very different fish to fry. Adland's best chance lies in amplifying this creative stature but aligning it more closely than ever to proven effectiveness.

This article was first published on campaignlive.co.uk

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