As general manager of Colgate Palmolive, Karen Guerra has rather
more pressing issues on her mind than advertising. Working out the
implications of recession, streamlining computer data-bases under the
company’s new SAP information system and persuading her bosses of the
need to implement a number of unbudgeted projects that could prove
critical to future growth all take a higher priority.
But as a former Colgate marketing director, you can be sure that
Guerra’s detachment springs neither from lack of interest nor
understanding. Rather it is a testament to the company’s long-standing
and increasingly successful relationship with its global advertising
partner, Young & Rubicam.
It’s a relationship endorsed by Colgate’s triumph in the Campaign poster
awards the evening before our interview, where Y&R picked up the
effectiveness prize for its Colgate ’red’ work. Proof positive, a proud
Guerra insists, that advertising toothpaste, shower gel, deodorant or
any of the other brands in the Colgate portfolio needn’t be an exercise
in trite and boring creative work.
’Definitely, we can be very creative. It’s about two things, it’s about
quality of impacts and it’s about relevance, and if you can make a
campaign impactful but still relevant, you’ve cracked it.’
Over recent years, Colgate has been pushing back the boundaries of
advertising in ways that may seem minor to the likes of a Tango or a
Volkswagen, but which have helped break the mould of traditional fmcg
advertising.
The company’s bold yet simple poster work for Colgate, which slashes the
walls of Guerra’s office with vivid stripes of blood red, is just one
example. But Soft & Gentle’s sponsorship of the Louise No Sweat tour
last year, and developing partnerships with media owners such as Sugar
magazine, have helped take its brand communications well beyond the spot
and space norm.
’Some of our advertising is seen by my corporation as very avant-garde,
though within the UK advertising market that’s probably not the
case.
For us it’s definitely cutting edge,’ Guerra says.
And as we hurtle towards recession, we can probably expect more creative
innovation from Colgate. Guerra is not one to shy away from the
challenges of economic downturn and while budgets are sure to come under
the spotlight, innovation will not be compromised. ’You’ve actually got
to push the boat out in a recession. It’s easy to wind yourself up about
doom and gloom, but recession is an opportunity to be a bit different,
to take more chances, to push at the edges. You have to, particularly if
your competitors are cutting back on spends.’
Other business issues may have the edge when it comes to boardroom
debate, but advertising is a subject Guerra has strong views on. In
fact, advertising gave her her first job, as an account executive at
Wasey Campbell-Ewald and, through her roles as Colgate’s sales and then
marketing director, she’s kept a passionate interest in the
business.
Yet ask Guerra what motivates her, and the answer is as far from luvvie
land as it’s possible to get. For all the advances Colgate is making in
its creative and media strategies, Guerra is very clear that advertising
exists to serve a purpose. ’The ad agency gets its buzz from producing
great creative work, but my buzz comes from seeing the sales, the
margins and the profitability that the brand and the company can deliver
from wealth-generation. I guess that’s why they’re doing their job and
I’m doing mine.’
As managing director she’s happy to leave the job of advertising to her
marketing department, but as marketing director she also keeps a careful
watch on advertising effectiveness.
With ad budgets of pounds 16 million a year, spread across brands
including Colgate, Palmolive and Soft & Gentle, advertising is, of
course, a huge investment and one that is carefully monitored and
regularly appraised.
It’s a clear focus on value for money that forms the basis of Colgate’s
relationship with Y&R.
Back in 1982, Colgate struck what was then the largest ever global
agency deal, appointing Y&R as its agency of record around the world,
forcing it to dump Procter & Gamble at home, and later consolidating its
entire portfolio into the agency in 1995 when it dropped FCB from its
roster.
At the time, the appointment was something of a talking point in
London.
Rumour had it that for the global prize, Y&R had pledged to handle the
business for nothing, with all remuneration based solely on
performance.
Well, it doesn’t work quite like that. But payment by performance is
clearly an important part of this client/agency relationship. Y&R is
reviewed twice a year and those appraisals are taken to New York to
assess what the agency has delivered to the business on a global basis.
Guerra has her UK perspective but, in terms of overall payment by
performance, that’s measured on a worldwide basis.
In the UK, over recent years, a carefully regulated system has been
developed to measure both the agency and Colgate’s own communications
manager, Linda Wallace, against set targets based on the cost and
quality of what’s delivered.
And it’s a two-way street. Y&R is also encouraged to report back to
Guerra on Colgate’s marketing team and how the company performs as a
client.
’Now we are confident of getting value for money,’ Guerra explains.
’Five or six years ago if you’d asked me for an honest answer, I’d have
said I hope so, but I wouldn’t hand on heart have been able to say I
think we’re getting extremely good value from our agency.’
At the same time, Colgate is now developing its own armoury to begin
tackling the Holy Grail of eliminating advertising wastage. The engine
for this will be external data - from tracking studies by Epos and IRI
research - which will be used to model the impact of each area of the
marketing mix. According to Guerra, the answers lie just a couple of
years away.
Such reassurances are vital if, like Guerra, your agency is imposed upon
you through a worldwide deal. ’It’s an interesting issue,’ Guerra
admits.
’Having to work together because of this international relationship has
actually made both of us really work at it. Both Colgate and Y&R have
their own chequered histories in the UK, and I think it would have been
very easy for either party to throw the towel in if we’d only been
operating on a local basis.
’But because we’re not, this has been like a marriage with almost
unbreakable vows. You really have to work hard to keep the relationship
going. Since Toby (Hoare Y&R’s managing director) and Charlie (Wrench,
the head of the Colgate account in Europe at Y&R) came on to our
business, it’s genuinely been a very happy marriage indeed.’
Even so, ask Guerra if she sees her agency as a true business partner at
the broadest level, and her answer is unequivocal. ’How could they be?
How could Toby Hoare have an input into our strategy for getting SAP up
and running around Europe? I wouldn’t expect him to, just as I wouldn’t
expect to know all about Y&R’s new-business strategy.’
She clearly draws a line between the role of the advertising agency and
that of the management consultant. One is about brand communication -
externally and even internally, the other, where necessary, is about
broader business issues. ’We do manage brands and we do manage
categories, but the business is about a whole host of complexities to do
with our customers, our distribution and so on. I spend a lot of time on
human resource issues, for example.’
Nevertheless, Y&R has been critical in helping redefine the strategy for
Soft & Gentle. When tracking data showed that the brand was beginning to
date and move into the older age demographic, Guerra says Y&R was
invaluable in analysing the brand strategy and working out how best to
communicate with a younger, and notoriously difficult to reach, female
market.
’If you’re looking at communication across the spectrum, that’s where a
true partnership with an agency can be enormously challenging and
enormously rewarding,’ she explains.
Guerra is clearly demanding of her agency when it comes to understanding
advertising’s role in such broader business issues. The adman she most
admires is Y&R’s own Wrench, who works very closely on Colgate around
Europe. And why does he elicit such praise? ’Because Charlie is someone
who is very passionate about advertising but who’s also an all-round
businessman.
When I first met him he was passionate about advertising as an end
product in itself and I’d tell him, ’you’re just a bit of the process’.
Now he’s very strategic, very creative. I guess I admire him so much
because I’ve seen him change so much and I think he’s a better adman now
for being a more rounded business person.’
Agencies themselves, though, haven’t adapted enough to meet the changing
needs of clients, Guerra warns in her parting shot. ’A lot of the basic
structure of the advertising agency is the same as it was when I worked
in the industry in the late 70s and, as we move into the 21st century, I
think that agencies will have to change a lot of their working practices
and skill bases because mass advertising is going to be very difficult
to achieve.’
Guerra says agencies still tend to favour approaches that look good on
their showreels and, while TV is not the be-all-and-end-all any more,
agencies must wake up to the fact that manufacturers and retailers
increasingly want to talk to consumers on a one-to-one basis.
She cites in-store loyalty cards as one example of how retailers are
developing a new language with their customers. ’As manufacturers,
unless we understand that and manage it, life could become very
difficult. Advertising agencies are part of that whole communications
issue but I’m not sure how many have really understood it and have a
clear strategy in mind about how they’re going to deal with it.’
THE GUERRA FILE
1996: Promoted to Colgate’s general manager for UK and Ireland
1992: Becomes marketing director
1986: Begins a two-year stint at Pepsico before returning to Colgate as
European projects director
1983: Joins Colgate Palmolive
AGENCY/SPEND
Colgate Palmolive’s annual adspend is pounds 16 million through Young &
Rubicam
MOST ADMIRED ADMAN Charlie Wrench, ’a passionate adman who’s become an
all-round businessman, with a little help from us’
FAVOURITE AD Tesco Dudley Moore campaign
BUSINESS GURU Archie Norman, ’because he can be anything he wants to
be’.
