CLOSE-UP: LIVE ISSUE/CLIENTS ON GLOBALISATION - Will clients suffer as agencies look to form global alliances? Francesca Newland talks to senior marketers about the effects of globalisation

Clients are generally wary of the immediate effects of agency consolidation.

Clients are generally wary of the immediate effects of agency

consolidation.



They fear insurmountable conflict issues as well as poor service from

agencies that are more wrapped up in redundancies than in account

management.



In the long term, there is the fear that with fewer agencies, the

industry will lose its competitive edge - potentially leading to poorer

quality work and higher prices. The trend also threatens to offer

clients a limited choice of network.



However, most see that a truly global agency better suits the

requirements of a truly global client. And that the bigger the agency,

the bigger its talent pool. Fear of lack of competition as the agencies

merge into a handful of giants is offset by the competition existing

within a single network as its individual outposts vie to be chosen to

develop the next global campaign.



Below are the opinions of some senior marketers, both global and

domestic.





Peter Glynn-Jones, managing director and senior vice-president,

strategic development of SmithKline Beecham Consumer Healthcare



Brilliant consumer communications - through the marketing mix - is one

of the most powerful weapons we have at our disposal. And, frankly, it’s

my experience that larger agencies with global reach attract more

talented people which means we have greater choice of creative.



But large agencies shouldn’t be lured into a false sense of

complacency.



One of the reasons we use global agencies is that it gives us greater

flexibility. We positively encourage internal competition between

different countries’ creative groups - and you tend to find that a

creative team whose work is chosen above any other for global

distribution will take great pride in their achievement.



It means a great deal to them internally and we, the client, get the

best ad for our brands. We’re one of the most significant players in the

global marketplace, so we have an immediate entree to the top people in

our agencies. The system should therefore rarely disappoint on this

basis.





Mike Moran, UK marketing director of Toyota



The most interesting issue for clients is that mergers, particularly

among large agencies, usually throw up client conflicts. Yet I for one

do not think it is acceptable for an agency to say that they can run two

competing clients within the same agency in a separate division.



The whole point of employing a creative hotbed is that you have a core

creative team, but if things get a bit sticky you can involve other

people across the agency. To try to artificially create these Chinese

walls is ridiculous. You only have access to half the agency’s

resources, yet you thought your fee entitled you to the whole thing.



Client handling is another issue. It’s questionable whether you are

better looked after, particularly when a merger results in internal

difficulties such as redundancies.



And yet there are some mergers that are more logical and throw up fewer

client conflicts. They are inevitable to some extent because of the

increasing pressure on costs in business and the economies of scale they

allow. For larger agencies with a high cost base, a merger is obviously

a way of maintaining a competitive position.





Eric Salamon, general manager, corporate marketing of Heinz



I’m not strongly for or against consolidation. We are seeing it among

the manufacturers and the retailers. The advertising industry is doing

it for the same reasons - it’s inevitable.



We as clients are consolidating large pieces of our advertising on

global business. Hopefully this will help agencies to meet our global

needs.



The main pitfall may be that it will get to the stage where there is a

lack of choice for advertisers and a lack of competitiveness between

agencies.





David Patton, European marketing director of Sony Computer

Entertainment



Both of the mergers we went through with TBWA GGT Simons Palmer were

conducted with the utmost efficiency. What was important was having a

point of continuity and this was provided by Carl Johnson who was very

proactive in keeping us informed of all the developments. Any concerns

we had were addressed immediately and we felt that it was a very smooth

transition.



There are three important things to consider as a client. The first is

culture. TBWA and GGT particularly shared a similar philosophy to Simons

Palmer so the merger was perceived as a positive move both internally

and by clients, evinced by the fact that the agencies lost few of their

clients.



Second, conflict of interest has to be taken into account. However,

there was no real business conflicts for Sony PlayStation, so in that

respect we were unaffected.



Finally, there has to be some stability throughout the whole process.

Our account team was relatively unaffected and so we were able to

continue with all our work for PlayStation.



It was really business as usual.



The merger was important for the development of PlayStation as a brand,

however. During the past five years, we have gone through tremendous

growth, and our advertising needs have changed. We have become a major

international brand and if Simons Palmer had not gone through the two

mergers, we probably wouldn’t have continued working together.



As a result of the mergers, we now have dedicated creative departments

and account teams within 13 of TBWA’s offices around the world. This

infrastructure has clearly contributed to the success of the brand,

enabling us to produce a large volume of work - 25 TV commercials and

200 press executions. We couldn’t have done that with Simons Palmer.





Additional reporting by Lisa Campbell.



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