Last week WCRS pulled off what could well be the coup of the year in landing the pounds 41 million Vodafone UK creative account. Extra points were earned for Robin Wight's bullish promise, after WCRS lost Orange to Lowe Lintas last year, that WCRS would win another mobile account within six months. Those who were waiting for a wave of redundancies at the agency are now busy taking off their hats to the WCRS chairman.
As far as Vodafone is concerned, the appointment heralds the start of a new UK advertising strategy but it is also part of the company establishing a truly global brand.
Vodafone was formed in 1983 and held one of the two UK mobile licences (Cellnet had the other). When the number of UK licencees was extended to four in the 90s, Vodafone successfully maintained its leadership of the domestic market. However, its huge growth in recent years to become the world's largest mobile company (based on numbers of subscribers) has been driven by an aggressive acquisition strategy. In 1999, it staged a takeover of the US giant AirTouch and followed this with an audacious hostile takeover of the German operator Mannesmann, which owned the rival UK operator Orange (which was later sold on) and D2, the market-leading network in Germany.
In addition, Vodafone has been building a presence in other countries including Japan, Italy, New Zealand, Mexico and China. The aim of its chief executive, Chris Gent, is to build on its 65 million subscribers worldwide and to create a global company with services in all major markets.
This is bringing great change in Vodafone's outlook. In branding terms, it is starting to think globally and wants to create a brand with recognition as high as Coca-Cola. There's a long way to go. Vodafone lacks any real global brand, with many of its services having retained their local network identity (D2 in Germany, Omnitel in Italy).
This is now set to change, meaning that Vodafone has to consider how to use advertising and other communications channels on a global basis.
Two key players in driving this new strategy are David Haines, Vodafone's recently appointed global brand director, and Paul Donovan, its managing director of the UK commercial division. Both are experienced marketers.
Haines has joined from Coca-Cola, where he was the deputy chairman and president of Coca-Cola Germany. A former European marketing director of Mars, he will oversee the roll-out of the Vodafone brand on a global basis.
Donovan is a former One2One marketer who joined Vodafone just over a year ago. He takes up a key position in the UK operation of the company, with responsibility for the largest division as well as for driving Vodafone forward as a consumer-facing operation.
The appointment of WCRS is only the start of a number of changes around the Vodafone business. The company is simultaneously running a pitch for its global advertising account. Wieden & Kennedy, McCann-Erickson and WCRS are pitching, with W&K tipped to win.
In the UK, WCRS replaces BMP DDB, which has worked for Vodafone since 1996. Media buying remains with OMD UK. 'We have decided that it is time for a fresh approach,' Donovan says.
'WCRS has in-depth experience of our market and an outstanding reputation for creativity.'
BMP's work for Vodafone, featuring the Scottish actor Hamish Clarke, has not been as creatively lauded as the consumer branding work that WCRS created for Orange. As a result, it's hard to argue with the logic of switching to the telecom sector's most highly rated agency once it became available.
However, some observers feel Vodafone must shoulder some of the responsibility for its advertising's lack of impact in the past.
One agency source says: 'Vodafone are a bunch of go-getting entrepreneurs who drive the business hard and fast. The culture seems to be one of getting the bottom line higher rather than focusing on what the customer wants. Orange is very interested in getting customers on side and feeling good about the brand, Vodafone has shown few signs of doing this.'
BMP is obviously disappointed to have lost the business, and its group chairman, James Best, is quick to point to the agency's achievements on the account. 'It's sad that a five-year relationship can be ended so suddenly,' he says. 'But we're proud to have helped Vodafone grow from two million to 12 million UK customers and hold the number one position. Hats off to WCRS, but now it's our turn to say 'watch this space'.'
Sources say that Vodafone is undergoing a 'commercial realignment' process to focus more on its existing UK customers as the chase for new subscribers dries up. Part of this takes the form of a four-fold increase in direct marketing to around pounds 18 million, one source says. The company is also reviewing its direct marketing roster.
Haines and Donovan will be focusing their attention on building Vodafone's consumer brand both globally and in the UK. The prospect for WCRS is an exciting one. While Vodafone is the market leader in the UK, there is clearly ground to be gained on Orange in terms of understanding customers. One source says: 'At the moment, Orange has the high ground but this is up for grabs because of the third-generation licences and data-through phones. The heart of the market is about people building relationships and communicating with one another - nobody has seized this yet.'
Whatever WCRS's approach to seizing this ground in the UK, its work will be closely linked to a global approach. Sources close to Vodafone say that there will be a global brand strategy developed from the centre with an agency in each market implementing this strategy on its own terms.
Vodafone has already embarked on developing its first global corporate branding campaign. Last October it appointed McCann-Erickson to help develop its worldwide brand. However, since the arrival of Haines, the size of the task has clearly been reappraised, leading to the new global pitch. McCann's one-off branding assignment, due to run this spring, will be followed by the winning agency's sustained global strategy as Vodafone attempts, according to one agency source, to become 'a brand like Nike or Coca-Cola'.
Agencies pitching for the global account believe there is no obstacle to this. One agency source says: 'It's an historical accident that there is no global telecoms brand. The situation of there being a duopoly (Vodafone and Cellnet) meant there was little pioneering spirit or determination to grow. But mobile customers have a need to communicate, so why not create a universal brand?'
In advertising and brand terms, Vodafone seems to be getting the right building blocks in place to create this global entity. However, its aggressive plans to maintain and grow its lead as the world's number one mobile operator will not go unresisted. It only has to look as far as Orange, now backed by the huge resources of its new owner France Telecom and funds from a partial flotation, for tough competition. But at least Vodafone seems finally to have realised that building a great brand is more than a numbers game.