The German cut-price supermarket, Aldi, has split its pounds 3.5 million
advertising account into three, appointing a separate production company
and media agency to work alongside its incumbent creative agency in a
bid to cut costs.
Aldi’s decision means that Lansdown Conquest, which has handled the
supermarket’s full-service account since it launched in the UK in 1990,
will lose significant chunks of commission.
The media account will move from Lansdown Conquest into Media Campaign
Services. Print production will be handled by the studio, Carney
Richardson, using computer-generated advertising, which is thought by
Aldi to be more economical.
Bill Patterson, Lansdown Conquest’s chief executive, insisted his agency
will still have a big chunk of Aldi business. ‘We will continue to do
its strategic, creative and design work,’ he said.
Patterson added that Aldi’s decision to handle production and media
services separately was cost-based. ‘I understand its decision. Aldi is
geared to buying bananas at so much a ton. And it wants to buy
advertising at so much a ton as well. That doesn’t necessarily fit with
the way our industry works. We have done nice work for Aldi but it
thinks it can do it cheaper.’
Tony Abraham, the former creative director of what was then Lansdown
Euro, won the Aldi business in 1990. Abraham left the agency in December
1994, shortly before Bill Patterson was appointed the new chief
executive of the WPP-owned shop.
The decision to hive off media and production services has been driven
by Trevor Coates, Aldi’s managing director.
The food discounter has more than 200 stores in the UK and is set to
increase its presence in the market over the coming year. Founded amid
the austerity of post-war Germany, Aldi has developed into one of
Germany’s major food retailers with its strategy of rock-bottom pricing,
low staff levels and spartan design.
Brands are mainly obscure and exclusive to the store, with a sprinkling
of better-known lines. The UK stores conform to this approach - the very
few familiar brands include Kellogg’s Corn Flakes, Mars Bars and
Whitbread Bitter, all of which are heavily discounted. Only cash payment