Here’s a question: how is it that below-the-line agencies sometimes
(often?) have client conflicts when ad agencies are usually (always?)
forced to demonstrate their loyalty to a client by granting it sector
exclusivity?
It’s a simple question but one that doesn’t appear to have taxed many
marketing minds over the years. Things, however, are changing. As above
and below the line converge and the latter continues its transformation
from a tactical-only weapon to one that is tactical and strategic,
voices are being raised about this state of affairs.
Brett Gosper, chief executive of Euro RSCG Wnek Gosper, which resigned
the Guinness account before taking on Bass, believes there has to be a
reappraisal of what conflict means so that ad agencies aren’t
disadvantaged. ’It’s less an issue of confidentiality than of sending
the right signals,’ he says.
Ad agencies, he argues, have been regarded by clients more as partners
than suppliers, hence the ’more emotional’ nature of their
relationships. While this, on balance, is a plus, it can easily become a
negative if ’clients overstate the similarity’ between themselves and
other, existing clients.
Abbott Mead Vickers BBDO has just acquired its second direct marketing
agency, Craik Jones Watson Mitchell Voelkel. The AMV joint chairman,
Peter Mead, denies this was an acknowledgment that Barraclough Hall
Woolston Gray, AMV’s existing direct marketing agency, was becoming
hindered by client conflicts. But he concedes that easing that problem
’might be a long-term by-product’ of the deal.
Mead believes the main reason why clients have insisted more on
exclusivity with ad agencies is because traditionally there have been
’more quality offerings’ above the line than below. Simple supply and
demand economics, you might say.
Others agree. John Ingall, the managing director of the direct marketing
agency, Evans Hunt Scott, whose clients include Legal & General,
Prudential Bank, Royal SunAlliance and Tesco Personal Finance, says such
companies need ’big resources’ - such as planning, targeting and
database management.
’In an industry that is supposed to be booming, you could name on the
fingers of one hand the agencies properly equipped to meet their
needs.’
Until this sorry state of affairs is remedied, Ingall claims, clients
will have to put their faith in Chinese walls and assurances that their
competitor’s account relates to a very different kind of product from
their own. Even so, Ingall has had to turn down at least four financial
services pitches recently because ’we don’t want to rub our existing
clients’ noses in it’.
Some of the younger below-the-line agencies, understandably irritated by
the concentration of so many clients in so few agencies, believe their
only way of competing is to offer ad agency-style exclusivity. Jon
Claydon, a director of Claydon Heeley International, thinks client
conflict ’is going to be the big issue over the next few years’. He sees
it as a legacy of direct marketing’s ’functional’ roots but finds
perception lagging behind reality. ’Direct marketing has, in many cases,
been turned into a weapon of competitive advantage, and is, therefore,
on a par with advertising,’ he asserts.
Clients seem to find above- and below-the-line comparisons invidious,
which may boil down to the fact that advertising and direct marketing
managers have never really compared notes.
Peter Dean, brand manager of the direct and retail division of Royal
SunAlliance, says: ’We think about conflict when hiring a below-the-line
agency. But it’s not vital.
’What’s important is to have the right talents and specialist knowledge.
I don’t believe anything is truly exclusive - people have conversations
within industries just as easily as they can within an agency. You have
to enter any relationship with a high degree of trust. Chinese walls do
work.’
But sceptics beg to differ, pointing to the likes of WWAV Rapp Collins,
the UK’s largest direct marketing agency. It is pitching for an Eagle
Star account, which, if successful, might adversely affect another WWAV
client, Commercial Union. Both clients have been keen to reposition
themselves.
WWAV, whose clients also include Lloyds TSB, Nationwide, Bradford &
Bingley and the Coventry Building Society, rejects any suggestion that
its Chinese walls are not rock solid.
’We have very, very separate account teams who literally don’t know what
the others are doing,’ a WWAV spokesman says. He admits, however, that
some clients do insist on sector exclusivity and ’the bigger we get, the
more of an issue this will become’.
The good news for peeved ad agencies and smaller below-the-line shops is
that almost all the client conflict occurs within the financial services
sector. Traditionally, this operated as a kind of cartel, with all
members of the club united in their desire to screw the consumer. But
things have changed enormously since the bad old days, with the dramatic
inroads made by Virgin, the supermarkets and retailers like M&S.
So, at least in theory, the cosy world of financial services should
become just as sensitive to client conflict as everyone else. In the
meantime, however, a new debate about the nature of exclusivity may well
be under way within agencies of all hues. One thing seems clear: if
below-the-line folk want to be taken as seriously as their advertising
brethren, they must accept that when it comes to client conflict, they
can’t have it both ways.
Conflict or complement?
Selected direct marketing agencies and their clients
Aspen Direct
Barclays, Midland, Alliance & Leicester
Barraclough Hall Woolston Gray
Legal & General, Prudential Brann
Allied Dunbar, Clerical Medical, Barclays, Halifax, Midland, Family
Assurance, Friends Provident, Norwich Union
Clarke Hooper Consulting
Jacob’s Bakery, Manor Bakeries
Holmes & Marchant
Lloyds TSB, NatWest
WWAV Rapp Collins
Coventry Building Society, Nationwide
