Telefónica's U-turn poses unanswered questions
A view from Claire Beale

Telefónica's U-turn poses unanswered questions

There must be a story behind the story of Telefónica's media agency shift. I doubt it's one that will show our industry in a good light.

Here are the facts. Three months ago, Telefónica concluded a six-month review process by handing its global media planning and buying business to Publicis Groupe.

Cue well-deserved celebrations and tangible relief at Publicis’ ZenithOptimedia, the incumbent on the £50 million UK business. Zenith has had a rough run and securing O2 was a welcome return to form that will have meant much to them. Not only was the win a significant vote of confidence in the agency, but O2, through its earlier incarnation as BT Cellnet, had worked with Zenith for well over 20 years. This was emotional.

The £200 million booty will be welcome at Havas Media, but I can't imagine it has been a particularly satisfying coup

Except that this week Telefónica changed its mind and handed the entire account to Havas Media as part of a "global strategic appointment of Havas Group".

So what’s the story behind the story? The only thing we really know is that Telefónica recently acquired Brazil’s GVT broadband operation from Vivendi for $9.3 billion; Vivendi’s chairman is Vincent Bolloré, whose family owns a 36 per cent stake in Havas (run by his son Yannick) and has just filed a share exchange offer that could see that stake rise to more than 50 per cent.

There’s nothing that says the two events are connected. But some things are very clear. Moving big media accounts around like this does nothing to enhance the view that media is anything more than a commodity purchase driven by price, or easily bundled alongside other "strategic" alliances; quality doesn’t come into it.

The Telefónica marketers who made the original decision either don’t know what they’re doing, or they’ve been overruled by their board, neither of which is likely to make them a happy client for Havas. And the U-turn shows an astonishing disregard for the effort – and cost –incurred by pitching agencies. To declare a winner then change your mind makes a farce out of the entire process.

Of course, Havas may very well be a good home for the Telefónica account. But clearly it wasn’t deemed the best back in July, having competed for the global business alongside Zenith in the original pitch. Sure, the £200 million booty will be very welcome at Havas Media, but I can’t imagine it has been a particularly satisfying coup.

The truth is, in searching for any logical, respectable explanation for the change of mind, there are few straws to clutch. One thing that’s easier to conclude is that Telefónica hasn’t primarily chosen its new media agency based on the added value that brilliant media thinking (properly costed and fairly paid-for) can bring to its business. And that’s not good for them or our industry.

Claire.beale@haymarket.com @Clairebeale

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