Like snowmen in a glass globe, the financial services sector is
being given a thorough shake. Out go personal equity plans (PEPs) and
TESSA savings programmes and, with the new tax year, in come individual
savings accounts (ISAs). The result, as the City tries to persuade
investors to put their cash into one or more of these schemes, is a
veritable blizzard of mailshots and direct response advertising.
That makes it a busy time for direct marketing agencies, most of which
are beavering away on behalf of several financial clients. Omnicom’s
WWAV Rapp Collins group alone has 13, spread across its main London
office and its satellite agencies in Edinburgh, Leeds and Bristol. There
are out and out specialists, too, such as DMB&B Financial and Camp
Chipperfield Hill Murray.
This is a puzzle to many traditional ad agency people. How is it
possible to work for several companies in the same field? What happened
to conflict of interests? Do clients have one standard for
above-the-line, and another for below?
It’s not that the conflict question never arises. Towards the end of
1997, Lowe Direct had the chance to pitch for pounds 12 million worth of
business, but its existing client, Lloyds TSB, ruled it out.
’Then, last year, we had a similar approach,’ says Lowe Direct’s
managing partner, Tony Watson. ’We chatted it through within the Lowe
Group, and decided to set up a new outfit, Lowe Plus. Tess Doughty was
returning from maternity leave. She was transferred to the new unit,
with a handpicked team, to handle the new business - Prudential’s Egg.
Everyone got what they wanted.’
Lloyds TSB’s marketing services director, David Lewis, says he expects
all of the bank’s agencies to inform him when they are pitching.
’I’d say ’no’ to other clearing banks in particular, and to some others
as well,’ he adds. ’But even an organisation of our size and budget
would meet resistance to a blanket veto. We work with the bigger
agencies like WWAV and Lowe Direct, and want them to believe in the
value of our business. A total ban would be an unreasonable restriction
on their growth.’
It’s the handful of high street clearing banks and credit cards that are
touchiest about conflict. Elsewhere, simple confidentiality is the
greater issue, and client concerns can usually be set to rest through a
system of Chinese walls.
The fact is, financial services are a special case, even in direct
’Renault wouldn’t countenance us working for another car manufacturer,
and nor would Rothmans let us work for another tobacco firm,’ says Mark
Sheard, founder and joint managing director of the DM and sales
promotion agency, Stretch the Horizon. ’There is more flexibility in
many of the financial areas, where, in the end, it comes down to
Supply and demand is one of three main reasons why financial clients are
more pragmatic. Basically, there aren’t enough good DM agencies to go
While the Campaign DM league table (30 October, 1998) listed just 40
agencies, the Building Societies Association has 71 members and the
Association of British Insurers has around 440. To drivethe point home,
the Direct Marketing Association estimates that almost a quarter (24 per
cent) of the DM sector’s revenue comes from financial services.
The second reason why clients are prepared to share agencies is that
financial services demand expertise, in understanding the regulatory
framework, and in knowing what motivates the customer. ’You really,
really, really need to know the products and the sector,’ says Lesley
Mair, managing director of WWAV Rapp Collins, London. ’Anyone who does
can see when it’s done badly.’
Mike Horne, managing director of Brann’s Bristol agency, and a former
pensions marketing manager with Eagle Star, agrees. ’As a client, I took
the view that pensions were a very complex product, and therefore you
needed agencies who understood them, and how they worked with the
Thirdly, there’s a distinction between what above-the-line and
below-the-line agencies do for their clients. Multi-million pound plans
for a new breakfast cereal or confectionery bar could be sabotaged by
competitors if word leaked out too soon. A lot of DM work is not like
that. In financial services in particular, it’s frequently an on-going
and evolving programme, targeted at the client’s existing and
’If Barclays knew we planned a loan mailing in two months’ time, I don’t
think it would bother them or us very much,’ Lloyds TSB’s Lewis
What’s more, the nitty gritty of how a campaign is designed reflects the
positioning and objectives of the individual client, and may not be
relevant to rivals. ’The Prudential is driving leads for its sales
force, and that’s very different from Marks & Spencer, which is
primarily selling to its own customer base,’ WWAV’s Mair points out.
’Personalising the brand experience for the customers of those two
clients is not at all the same.’
For all these reasons, clients seem prepared to accept agency structures
that keep work confidential, without insisting on a ban on
For bigger groups, it’s easier. Lowe set up a new agency for the right
client. Brann runs its three offices as separate agencies, ’and there’s
140 miles of motorway between Bristol and London,’ Horne points out.
WWAV has three agencies in the provinces, while in London there are
eight client service directors and 180 account management staff.
Others point out that if clients can glean sensitive details about their
rivals’ plans from their agency, they’ll assume their own secrets are
being passed on, too. Mair sums it up when she says: ’If you let them
down on confidentiality, you’re dead.’