Bupa has rounded off a year of transition by parting company with
the Ogilvy Group. The move appears as much a reaction to pressures
within the healthcare insurance market as it is to dissatisfaction with
Ogilvy & Mather’s work.
It is believed that the company is intending to replace O&M and its
’you’re amazing’ campaign with a smaller agency and product-led
advertising. And the pounds 4.7 million adspend will probably be reduced
as financial pressure hits the marketing department.
Bupa is the biggest player in private medical insurance with a market
share of about 39 per cent, but its lead over the number two private
medical insurer, PPP, is narrowing.
Since PPP was acquired by Guardian Royal Exchange last year, its market
share has risen to about 33 per cent.
The narrowing of the gap between the two players has occurred against a
backdrop of static subscription numbers of about six million, which have
characterised the market for the past ten years.
As a result, the management at Bupa has had a call to arms, spearheaded
by the new chief executive, Val Gooding. She has instigated a
restructure which will see the company’s business separated into five
distinct units - insurance, hospitals, care homes, Sanitas (its Spanish
subsidiary) and new businesses such as dental insurance.
She also appointed Pat Stafford, then managing director of the marketing
consultancy, Corporate Positioning Services, as marketing director a
year ago.
Under Stafford, promoted to group marketing director in July, the
marketing team has grown substantially. New appointments include Simon
Sheard as brand director, Eileen Folan as head of marketing planning and
intelligence and Elaine Greenwood as director of UK membership.
Bupa is looking for advertising, media buying and direct marketing
agencies, opting against the centralised approach it took with the
Ogilvy Group.
The new above-the-line agency will have a much-reduced role compared
with that of O&M. Strategy and brand development will no longer be
handled by the agency. Instead, the greatly expanded Bupa marketing
department intends to take more control of its brand.
Creating a strong brand may prove difficult when there are so many
marketing directors - a lot of them new - pulling it in different
directions. As one advertising executive says: ’I am rather alarmed at
the number of people in the marketing department.’
According to a spokeswoman, the company has a shortlist of ad agencies
in mind, but they have yet to be contacted. However, it seems Bupa is in
talks with several agencies. As one agency boss says: ’It is such a big
marketing department, and each of them will have two or three pet
agencies.’
The spokeswoman says: ’We want an agency whereby we are an important
client to them.’ This highlights a certain dissatisfaction with O&M’s
treatment of Bupa, but it also hints that the company is looking for a
smaller agency - outside the top 20 is the most regularly quoted size
indicator. One agency source puts it another way, saying Bupa is looking
for an agency it can ’beat up’.
The review out of the Ogilvy Group is widely believed to have come out
of a desire to cut advertising expenditure. The enlarged marketing team
must be costing the company more than it is accustomed to, and the
looming recession is likely to have instilled fears of reduced
margins.
But Bupa risks a false economy by using three separate agencies for
media, advertising and direct marketing as it could lead to an
overlapping of tasks, not to mention inconsistent branding.
Its predicted shift to product-led advertising will not lend the brand
the support it is used to. One observer says: ’I fear Bupa may end up
spending a lot less on the brand. If you are going to advertise it as a
major player, you need to spend pounds 5 million on the brand. The true
solution is to spend pounds 10 million.’
Bupa’s relations with O&M have been strained for more than a year. The
former marketing director, Bruce Tranter, left the company in October
1997, soon after news leaked that he was talking to several London
agencies - news which Bupa vehemently denied.
His was not the only review: Stafford began talking to agencies - BMP
DDB and TBWA GGT Simons Palmer - in the spring and after three months
reappointed O&M to the business.
This chequered history leads some observers to conclude Bupa is a
’nightmare client’. But it also highlights that the review out of O&M
has been a long time coming and is not just a whim of Stafford’s.
Put against the background of losses this year - Guinness, Ford, Ryvita
and Warburton’s - it seems fair to assume O&M is doing something to
alienate its clients. One source close to Bupa accuses O&M of
’arrogance’. He says: ’It doesn’t seem to communicate to its
clients.’
O&M was appointed to Bupa’s account in 1992, but it wasn’t until 1996
that the company launched the ’you’re amazing, we want you to stay that
way’ drive. It appeared one year after Peter Owen, the chairman of PPP,
unveiled plans for a relaunch of the PPP brand.
Creatively, the campaign was successful. It kept Bupa at the forefront
of consumers’ minds at a time when PPP was spending three times as much
money on its relaunch through M&C Saatchi.
Patrick Collister, the executive creative director at O&M, says: ’I was
thrilled to be associated with producing distinctive, award-winning
advertising, which built a brand. Bupa has become an eponym. We have
been responsible for changing the market.’
His opinion is seconded by Steve Henry, the creative partner at HHCL:
’It was a beautiful branding campaign. It was distinctive and applicable
across a range of media. It had power. It will be a real shame if it
isn’t continued.’
The agency the company eventually chooses will have a tough task ahead.
It will be confronted with a newly formed, multi-faceted marketing team
and a very restricted brief.
