It's no secret that Charles Dunstone enjoys working with people
that he knows. As the chairman and chief executive of Carphone
Warehouse, his agency roster includes three advertising honchos that
he's known for years. There's Johnny Hornby, the founder of Clemmow
Hornby Inge, who handles TV advertising, Mike Hellens at Matters Media,
who sorts out buying, and Andy Tilley at Unity, who advises on planning.
Add to that Radioville, which has handled his radio advertising for
years, and Carphone Warehouse marketing summits begin to take on a very
old boy air.
This shouldn't really come as a surprise. Dunstone has always done
things this way and who can blame him. He started his first business
with two school friends - both of whom have gone on to be big successes.
One of them was Johnny Vaughan. The other, David Ross, opted to work on
Dunstone's second business - a two-man operation selling mobile phones
that has since made them both multi-millionaires.
Carphone Warehouse is arguably the UK's greatest business success of the
past decade - and Dunstone is its most spectacular entrepreneur. The
irony is that his brand has become one of the most recognisable in the
country despite no longer describing what his company actually does.
Dunstone's European operation, which now extends to 15 countries, is
branded the Phone House, but there's no question of making that change
in the UK.
"I'm not sure what we'd get out of rebranding," he says with typical
self-assurance. "They're inappropriate words but when we do research
people don't think carphones or warehouses. It's just a name. It's very
expensive to do it and for me there's always been something better to
spend the money on."
Refusal to splash out on a Consignia-style rebranding is far from the
only area in which Dunstone flies against latest marketing trends. It's
not that he sets out to break any advertising rules per se. It's just
that he's relentlessly shaped the way his company is sold around his own
personal judgments. His confidence in these has defined the agency
arrangements he's put in place - and those he plans for the future.
"I've always been cynical of people who said they could do everything,"
he says of his refusal to appoint a single, integrated shop. "So when we
started using radio I quite quickly worked out that if you went to a big
agency and asked them to do a radio ad for you, they didn't actually
write it. They gave it to a com-pany that wrote it such as Eardrum or
Commercial Breaks or someone that basically made them for the agency. So
immediately I cut out the middleman."
Carphone Warehouse's success is, of course, intimately linked with
radio, where it advertised at first through Eardrum and since with
Commercial Breaks, now rechristened Radioville.
It's been a profitable relationship for all concerned. The Radio
Advertising Bureau still uses the company as a case study for building a
brand on radio and Dunstone continues to enthuse about the medium's
value to his operation.
"The thing about radio that I like is that it does two jobs," he
"We used it very effectively to drive immediate sales but, at the same
time, it was working hard with the Stereo MC's sonic logo to build a
"People think we're a bigger advertiser than we are because we dominate
a particular medium and don't spread ourselves too thin. We own radio
now and we know from research that if our competitors advertise on
radio, people just think it's Carphone Warehouse. We own the
Given such domination of the traditional airwaves, it's tempting to see
Dunstone's move into TV advertising as the prestige icing on an already
wholesome marketing cake. He agrees - up to a point. "Traditionally it
has been because we've always had more effective radio ads than TV ads,"
he says. "But I think that's probably changed this time because what
we're running on TV at the moment is propelling us into a different
position in the marketplace in a way that radio perhaps couldn't have
done. For the first time it's really at the heart of what we're
This strategic move towards TV brand ads has come in response to a
fundamental shift in the mobile phone market itself. The category's
sales are down approximately 40 per cent year on year in the UK, with
operators such as Vodafone squeaking under pressure and forced to admit
that many of their customers no longer use their handsets.
Amid this general gloom, Carphone Warehouse recently saw its own share
price drop sharply, despite an impressive leap in market share from 12
to 18 per cent over the past six months. Dunstone doesn't appear overly
"The City gives you a tick for what you should have done in the past six
months and that's a reasonably brief conversation," he says. "What they
want to know is what's going to happen in the next six months and the
next year. Quite a few people want to take a view over Christmas, which
is fair enough. It's a very important trading period for us."
Dunstone's confidence stems from a belief that his brand positioning has
readjusted to the changing market in time - just. "For someone like us,
the majority of our business is replacement sales, people who already
have a mobile but want a new or different one. We've repositioned our
business to work in that environment rather than a race for acquisition
and that's very much what we're trying to articulate in our present
advertising," he says.
"The new campaign is about your ongoing relationship with the phone. For
young people especially, the mobile represents everything about their
control of their own personal life. It's taken on an amazing importance
emotionally, because of what it allows them to do. It has taken us a
long time to realise this."
Dunstone is commendably frank about the time it has taken for his TV
advertising to hit the right notes - and noticeably generous when
allocating responsibility for the delay. After making it a point of
principle to be involved at every stage of a campaign's development, he
won't consider shifting responsibility for previous ads that haven't hit
the nail on the head.
"Even with us all working amazingly hard, it's still effectively taken
us two years to get to something that really works," he admits.
"But we've been integrated with the process so when we went the wrong
way that was as much down to us as to the agency. It wasn't them saying
'we've looked at the research and this is what you need to do,' it was
much more collaborative than that."
The experience of struggling to crack a brief is unlikely to put
Dunstone off the idea of advertising itself. He doesn't question his
media spend and points out that his agencies' fees represent a tiny
proportion of the overall budget.
"The reason the advertising world can be the way it is is because, as a
proportion of the media spend, it's still relatively small," he
However, there's no doubt that Dunstone, whose workaholic habits are
well documented, views the industry as a whole with a bemused
It's a view that's only been intensified by his own experiences of
taking his brand into TV. He first appointed Young & Rubicam back in
August 1999 before the arrival of Virgin Mobile saw his account dropped
because of conflict reasons.
"I think advertising is the most competitive area of business I've ever
seen in terms of how people fight but it's also, in many ways, the most
wasteful and least responsive business in terms of how agencies run
themselves," he says. "The way they spend on expenses and do all these
other things is absolutely astonishing to people who work in a business
like ours. We just watch slightly astonished at times."
To Dunstone, an agency shouldn't be trusted to simply get on with
He believes in devoting time and effort to getting the most out of his
"Sometimes the process doesn't seem to work if you get a really big
client which is quite hands off and leaves things to the agency," he
"You've got to put as much effort in yourself as they do if you want to
make sure that they understand the marketplace and what matters to you
and what you're like.
"It's no good having some management consultancy work out what you
should do and then somehow flick that to an agency and have them make an
ad," he continues, proving that his cynicism about marketing services
applies to adland's rivals as much as to itself.
In many ways, Dunstone sees his own sector as having specific needs that
traditional account handling structures might struggle to
"The problem was that the market was moving very quickly and there was
very little understanding of who was buying mobile phones and why they
were buying them," he says.
"If you did some research it would probably be out of date in six months
because it was such a fast-changing category. If you just applied
traditional thinking about selling jeans or cars, then it wouldn't
Dunstone's suspicions about agencies' ability to come to terms with his
brief ensured that he would seek out an account handler that he already
knew. Hornby, the then joint managing director at TBWA/London, was the
beneficiary. "We never really had a pitch or anything," Dunstone
"We just got to know Johnny and Simon (Clemmow) and because of that
personal relationship, I had the feeling we wouldn't be slipped down the
TBWA organisation. They displayed a sense of personal ownership."
That sense of personal ownership was doubtless increased by the decision
of Clemmow and Hornby to break away from TBWA in April - starting
Clemmow Hornby Inge in an office space above Carphone Warehouse's
Marylebone Road store, with Dunstone as a member of the agency's
The move would seem to fit perfectly with Dunstone's model of working
with smaller, dedicated shops. However, he firmly denies that he
encouraged the split.
"I think I said to Johnny that I was very worried about the economy and
that it was probably the most dangerous time to do a breakaway," he
says, laughing. "But they'd emotionally checked out. They were going to
The advantages of smaller, leaner agencies are not restricted to
creative shops in Dunstone's book. It would be easy to put his choice of
media agencies down to old boy favouritism, but he insists there is
method here too. "I believe that people will do deals with us that they
wouldn't do with a big agency because Mike doesn't have any other really
big clients," he says of the media agency Matters Media. "If they did
such a good deal with a big agency, then they'd expect that for all
Dunstone has succeeded in creating a roster of UK agencies, convincingly
devoted to his business, that overrides his own concerns about adland in
general. But can this cosy set-up survive the expansion of Carphone
Warehouse itself? When I put it to him that a burgeoning international
presence would seem to suggest the need for a traditional network, his
sides almost split.
Dunstone will adapt work produced in London to foreign markets, but
he'll do it with agencies recommended by his operations in those
countries - not with shops recommended by a network account handler in
"I think I'm just a bit cynical about the world of advertising," he
says, putting it mildly. "So we've always fought very hard to try and
get it on our agenda and not get sucked into the whole process in the
way a lot of people do.
"I think the big companies that want agencies to do everything end up
getting the ad agencies that they deserve. They're huge, big
bureaucratic organisations and that's what they're going to get in their
Lives: Holland Park. "Well, it's almost Shepherd's Bush."
Car: Mercedes SL 500. "It's four years old, though."
Family: None. "I'm single."
Favourite TV: The Sweeney. "I saw it on cable TV the other day. It's
Favourite ad of all time: The Apple "think different" campaign with John
Lennon and Gandhi. "There was also a fantastic ad for Saturn cars which
I saw in America where this girl was being patronised by horrible
salesmen who'd only show her the vanity mirror."
Dream job: "On one level, I'd like to be prime minister because there
are several things that don't work that I'd like to put right. I'm quite
a big fan of the current one, though."