PERSPECTIVE: Playing conflict from both ends is risky for holding companies

This week's news that Reckitt Benckiser has dumped one Interpublic

network because of a conflict with a client held by a separate IPG

network must have brought a tear to the eye of McCann-Erickson, which is

the outgoing agency.



Reckitt's beef is that the Chicago office of FCB handles another large

Interpublic client, SC Johnson, while the London office of McCann is the

centre for the worldwide Reckitt account. The conflict became an issue

when IPG acquired True North Communications, FCB's parent, in July.



Interestingly, Reckitt's actions fly in the face of current

orthodoxy.



Procter & Gamble altered its conflict policy about two years ago to

treat agencies as standalone units from a conflict point of view and not

look through agency holding or parent companies. And where P&G led,

others have followed. Unilever works happily with Bartle Bogle

Hegarty ... which is 49 per cent owned by Bcom3 ... which, in turn, is

wedded to P&G through its D'Arcy and Leo Burnett networks.



The question is, is Reckitt Benckiser taking client demands on agencies

to illogical extremes or is it applying old-fashioned emotional values

worth clinging to that also make for good business?



The fact is conflicts are always more emotional than rational because

agency-client relationships are more emotional than rational. But ad

agencies cannot on the one hand argue that they want to be treated as

partners rather than mere suppliers, and that they need clients'

ultimate trust if they are to do the best possible job, while their

principals report into a holding company that professes to offer the

same for a client's arch-rival. They cannot, in other words, run with

the hare and hunt with the hounds.



It seems to me that this comes down to how the holding company positions

itself. While Omnicom positions itself as the financial centre of a

number of independent operating units, IPG and WPP attempt to control

their operating companies more tightly from the centre.



You could argue, therefore, that IPG and WPP have entered a dangerous

game; playing it from both ends towards the middle. For example, when it

suits WPP to strike a multi-agency deal with Boots, it will. When it

suits WPP to build up Chinese walls because an acquisition throws up an

uncomfortable conflict, it will do that too. For if the Reckitt

principle had been applied to WPP, then Colgate, a Y&R client, would not

have remained with a holding company whose two other networks handle

Unilever when WPP bought Y&R.



So Reckitt's actions are understandable. Agencies need to accept that

there are certain clients in certain categories where conflict is a

visceral thing. PepsiCo and Coca-Cola leap to mind. What a pity,

however, that Reckitt leaves itself free to talk to a roll call of

unconflicted networks that a household cleaning products manufacturer

can count on the fingers of a mitten.



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