McCann-Erickson is not going to bow out of Scotland gracefully.
The network is clinging on north of the border and, unlike the defeated
Ogilvy & Mather and Saatchi & Saatchi, McCanns refuses to cut its losses
and leave.
McCanns is looking for a deal that will secure its future in Scotland -
and the Leith Agency has been named as the front-runner (Campaign, last
week). McCanns has been at such pains to keep the discussions quiet that
it has deliberately used Faulds Advertising as a smokescreen to keep the
press off its scent.
But now its motives have been discovered, employees at the Leith are
said to be in revolt. Why would employees of a creative hotshop want to
become part of the impersonal McCann-Erickson network? Apart from a
couple of shareholders in the agency, who would benefit from a deal?
And what about the clients?
The Leith’s acclaimed Irn-Bru relationship could be elbowed out by
McCanns’ Coca-Cola business - a possible repeat of what happened between
the same clients at Bartle Bogle Hegarty a few years ago. The
Dunfermline Building Society would, equally, not fit with the Bank of
Scotland.
Financially, of course, there could be benefits for the Edinburgh shop
which, despite a good creative reputation, has never been as financially
sound as its arch-rival, Faulds.
If McCanns bought out 3i’s 45 per cent share in the Leith business, that
stake would then be owned by people prepared to keep ploughing money
into the agency rather than by a venture capitalist looking for a return
on his investment.
Why is McCanns so determined to stay on? Despite high-profile client
losses - a prized place on the Scottish Courage roster was lost with the
pounds 2 million Theakston’s account in June - McCanns Scotland still
has a handful of clients worth hanging on to - particularly Highland
Spring and Wimpey Homes.
There is also the network’s policy of having an office in every major
region. Following devolution, Scotland is even more likely to be seen as
a country in its own right, especially from as far away as McCanns’ New
York headquarters.
No-one at McCanns returned Campaign’s calls, but other Scottish agency
bosses are prepared to voice their opinions. ’It is to McCanns’ credit
that it sees Scotland as such an important market,’ Jim Faulds, the
chairman of Faulds Advertising, says. ’It definitely needs to do
something, but I would say it is 50/50 whether this particular deal
comes off.’
McCanns Scotland’s existing clients must be looking for some reassurance
that the agency will thrive, and news that a deal may be forthcoming is
likely to keep them happy. Ian McAteer, the managing director of the
Union, says: ’A new managing director would take five years to turn it
around, but McCanns hasn’t got that much time to resurrect the agency,
so it needs a merger.’
Aubrey Malden, McCanns Scotland’s managing director, was asked to leave
the agency in June, but is still caretaking until a replacement is
found.
Malden has a creative background, and has found it difficult to assemble
a top team to run the agency. Consequently, the stronger branches of
McCanns outside London - in Manchester and Birmingham - have had a hand
in the running of the Edinburgh shop and in taking decisions on its
future, despite having little direct experience of the Scottish
market.
’The instincts and ways of operating are different in Scotland,’ McAteer
asserts. ’It is a lot less flashy and more down to earth and it’s a tiny
village compared with London. Relationships are closely knit among both
agencies and the client community.’ Creativity is also at more of a
premium than in Manchester and Birmingham, where most prized accounts
are in the high-turnover retail sector.
It is generally thought devolution will have a distant but positive
effect on the Scottish advertising industry. ’In rational ways it won’t
make a difference, but it will give a greater sense of ’Scottishness’
and may subconsciously strengthen the feeling that things should remain
in Scotland,’ McAteer says. ’As long as we can provide the quality,
Scottish clients may be more inclined to stick with local agencies.’
And Scotland is far from stagnating, despite its limited size. Faulds
managed to triple its business from pounds 10 million to pounds 30
million in billings between 1992 and 1995. Start-ups, particularly the
Union and 1576, have done very well in the past couple of years. The
Union is working with Scottish Courage and recently won the pounds 3
million launch of Standard Life Bank; while 1576 has Direct Line
Financial Services and has won a place on the rosters of IDV and British
Bakeries.
As with any market, the key to success is a strong management team but,
in Scotland, local roots seem almost equally important. The Saatchi
network owns what was the most flourishing Scottish outpost, Hall
Advertising, which grew up as a local agency with a thoroughly Scottish
identity before being bought, and has been the training ground for many
of the region’s current big players.
McCanns is still trying to overcome a period of instability. As an
indifferent agency with some decent clients and the might of the
Interpublic Group behind it, we can be certain that whether or not the
Leith deal comes off, McCanns will try everything possible to save face
and maintain a presence in Scotland.
