CLOSE-UP: NEWSMAKER/LEITH BREAKAWAY - Tennent's fame tempts Leith staff to break away

Leith breakaway Newhaven is launching into a harsh market, Jenny Watts writes.

Opening an agency in the healthiest of economies takes guts, while opening one in the depth of recession in a market ignored by global advertisers seems like madness. Nevertheless, the temptation to handle what is arguably Scotland's premier advertising account, Tennent's, has led four individuals at The Leith Agency to quit their cozy jobs and open up shop.

When Leith resigned the business in August, the news was covered extensively in the Scottish consumer press and on the radio, such is the kudos surrounding the Tennent's brand. The chance to continue working on that brand has lured Gareth Howells, Leith's deputy creative director, Zane Radcliffe, a senior writer, Jonathan Shinton, a board director, and Ken Dixon, the head of account management and associate planning director, into forming a new agency, which will open its doors on 1 January 2003.

As Leith's chief executive, John Rowley, says: "In their shoes I would have done the same thing."

The agency, to be called Newhaven, will be privately funded by the four equal partners and there will be no financial backing from Tennent's.

One industry expert says: "The cost of entry for an ad agency is minimal. The important issue is how healthy is the market in which you are fishing."

And Jill Taylor, the head of account management at the new Edinburgh agency Family, which launched earlier this year, warns: "It's tough. Clients are looking to justify every penny being spent. We're tending to find that a lot more agencies are going for the pitches. Everyone's going for everything because there are not enough opportunities available."

The four partners come with a lot of agency experience. Shinton began his career at BMP DDB, working on Alliance & Leicester, Johnson Wax and John Smith's. During his seven years at Leith he's worked on Honda, Henkel, Bank of Scotland and Standard Life.

Novelist Radcliffe joined from HHCL & Partners, where he'd worked on Pot Noodle and Egg. Dixon has worked at St Luke's, Leo Burnett and Ogilvy & Mather. Howells has been at Leith for eight years, working on its successful Irn-Bru campaigns, as well as Atlantic Telecom, Daily Record, Bass Ireland and Beat 106.

Their move sees the Scottish business remain in Scotland, despite the best efforts of numerous London agencies. Leith was extremely reluctant to lose the business, which it had handled for 13 years. Dixon says Leith looked into funding a start-up to handle the £2 million business but realised this was unlikely to go down well at the rival brewer and fellow client Coors Brewers.

The breakaway will be operating out of Leith until the Tennent's contract expires at the end of the year, at which point it will open its own doors. And while many agencies can't kick out those deserting them for a start-up quickly enough, Leith seems pleasantly placid about the news of the imminent departure of four key senior members of staff.

Some sources say their departure is poorly timed for Leith. It has only just persuaded its £6.5 million Standard Life client to cancel pitch plans. But Rowley refutes suggestions that their departure could damage relations with Standard Life, saying none of the four are key to the business.

"That's absolute rubbish," he says. "None of the people who are leaving us were in any of the review presentations." Nevertheless, Shinton, Radcliffe and Howells all worked closely on the account.

Coincidentally, several people in account management have also left recently, leaving the department looking thinner than usual.

But Rowley maintains the strong management team structure will weather the blow. "Emotionally, it's always difficult when someone leaves. But because of the strength and depth in the company, we've got the opportunity to bring in flesh blood."

The four partners appear a little bewildered. They are not yet ready to talk about their plans going forward or what kind of agency they are planning to launch. Without independent backing, the team might find it hard to set up when they leave the bosom of Leith at the end of the year. Dixon responds: "There's a network of people who've been in touch offering those facilities."

Launching with the prize of Tennent's will get them off to a good start in the market. But, like London, it's a market where only the strongest survive. Barkers and McCann Scotland have both closed, victims of the recession.

And what is a worse prospect for the Scottish agencies than even recession is that Scottish clients, traditionally pumped with patriotism for their local agencies, are drifting south of the border. An industry expert explains: "Historically, Scottish-based clients would look for Scottish agencies for geographical and possibly political reasons. Trouble is they are now looking south. Take Baxters, for instance. It's currently talking to London shops."

Royal Bank of Scotland, a Faulds client, has put its advertising account into play, shortlisting London's big networks.

Radcliffe still thinks it's an exciting time to be launching in Scotland.

With Tennent's on side, the new agency has the comfort of a guaranteed income and the promise of a high profile that will catch prospective clients' eyes.

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