DIRECT: Client conflict: Chinese walls are a poor defence - Below-the-line shops can no longer afford to ignore the client conflict debate. Robert Dwek investigates

Here’s a question: how is it that below-the-line agencies sometimes (often?) have client conflicts when ad agencies are usually (always?) forced to demonstrate their loyalty to a client by granting it sector exclusivity?

Here’s a question: how is it that below-the-line agencies sometimes

(often?) have client conflicts when ad agencies are usually (always?)

forced to demonstrate their loyalty to a client by granting it sector

exclusivity?



It’s a simple question but one that doesn’t appear to have taxed many

marketing minds over the years. Things, however, are changing. As above

and below the line converge and the latter continues its transformation

from a tactical-only weapon to one that is tactical and strategic,

voices are being raised about this state of affairs.



Brett Gosper, chief executive of Euro RSCG Wnek Gosper, which resigned

the Guinness account before taking on Bass, believes there has to be a

reappraisal of what conflict means so that ad agencies aren’t

disadvantaged. ’It’s less an issue of confidentiality than of sending

the right signals,’ he says.



Ad agencies, he argues, have been regarded by clients more as partners

than suppliers, hence the ’more emotional’ nature of their

relationships. While this, on balance, is a plus, it can easily become a

negative if ’clients overstate the similarity’ between themselves and

other, existing clients.



Abbott Mead Vickers BBDO has just acquired its second direct marketing

agency, Craik Jones Watson Mitchell Voelkel. The AMV joint chairman,

Peter Mead, denies this was an acknowledgment that Barraclough Hall

Woolston Gray, AMV’s existing direct marketing agency, was becoming

hindered by client conflicts. But he concedes that easing that problem

’might be a long-term by-product’ of the deal.



Mead believes the main reason why clients have insisted more on

exclusivity with ad agencies is because traditionally there have been

’more quality offerings’ above the line than below. Simple supply and

demand economics, you might say.



Others agree. John Ingall, the managing director of the direct marketing

agency, Evans Hunt Scott, whose clients include Legal & General,

Prudential Bank, Royal SunAlliance and Tesco Personal Finance, says such

companies need ’big resources’ - such as planning, targeting and

database management.



’In an industry that is supposed to be booming, you could name on the

fingers of one hand the agencies properly equipped to meet their

needs.’



Until this sorry state of affairs is remedied, Ingall claims, clients

will have to put their faith in Chinese walls and assurances that their

competitor’s account relates to a very different kind of product from

their own. Even so, Ingall has had to turn down at least four financial

services pitches recently because ’we don’t want to rub our existing

clients’ noses in it’.



Some of the younger below-the-line agencies, understandably irritated by

the concentration of so many clients in so few agencies, believe their

only way of competing is to offer ad agency-style exclusivity. Jon

Claydon, a director of Claydon Heeley International, thinks client

conflict ’is going to be the big issue over the next few years’. He sees

it as a legacy of direct marketing’s ’functional’ roots but finds

perception lagging behind reality. ’Direct marketing has, in many cases,

been turned into a weapon of competitive advantage, and is, therefore,

on a par with advertising,’ he asserts.



Clients seem to find above- and below-the-line comparisons invidious,

which may boil down to the fact that advertising and direct marketing

managers have never really compared notes.



Peter Dean, brand manager of the direct and retail division of Royal

SunAlliance, says: ’We think about conflict when hiring a below-the-line

agency. But it’s not vital.



’What’s important is to have the right talents and specialist knowledge.

I don’t believe anything is truly exclusive - people have conversations

within industries just as easily as they can within an agency. You have

to enter any relationship with a high degree of trust. Chinese walls do

work.’



But sceptics beg to differ, pointing to the likes of WWAV Rapp Collins,

the UK’s largest direct marketing agency. It is pitching for an Eagle

Star account, which, if successful, might adversely affect another WWAV

client, Commercial Union. Both clients have been keen to reposition

themselves.



WWAV, whose clients also include Lloyds TSB, Nationwide, Bradford &

Bingley and the Coventry Building Society, rejects any suggestion that

its Chinese walls are not rock solid.



’We have very, very separate account teams who literally don’t know what

the others are doing,’ a WWAV spokesman says. He admits, however, that

some clients do insist on sector exclusivity and ’the bigger we get, the

more of an issue this will become’.



The good news for peeved ad agencies and smaller below-the-line shops is

that almost all the client conflict occurs within the financial services

sector. Traditionally, this operated as a kind of cartel, with all

members of the club united in their desire to screw the consumer. But

things have changed enormously since the bad old days, with the dramatic

inroads made by Virgin, the supermarkets and retailers like M&S.



So, at least in theory, the cosy world of financial services should

become just as sensitive to client conflict as everyone else. In the

meantime, however, a new debate about the nature of exclusivity may well

be under way within agencies of all hues. One thing seems clear: if

below-the-line folk want to be taken as seriously as their advertising

brethren, they must accept that when it comes to client conflict, they

can’t have it both ways.



Conflict or complement?

Selected direct marketing agencies and their clients

Aspen Direct

Barclays, Midland, Alliance & Leicester

Barraclough Hall Woolston Gray

Legal & General, Prudential Brann

Allied Dunbar, Clerical Medical, Barclays, Halifax, Midland, Family

Assurance, Friends Provident, Norwich Union

Clarke Hooper Consulting

Jacob’s Bakery, Manor Bakeries

Holmes & Marchant

Lloyds TSB, NatWest

WWAV Rapp Collins

Coventry Building Society, Nationwide



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