WORLD: Analysis: WPP shakes up Australia's ad production scene with Plush

Plush Films reckons it won't take work by undercutting rivals, Mark Sweney writes.

Sir Martin Sorrell has made something of a cottage industry out of ruffling feathers. It's his ongoing mission to get WPP Group's fingers into every revenue-making nook and cranny of the marketing communications industry.

This time he has set his sights on taking a slice of the commercials production industry and has most of Australasia outraged in the process.

WPP's foray into ad production, with the launch of Plush Films in Australia, was rapidly followed by local companies pronouncing the move as sounding the death knell for independents.

The ultimate fear is that the seemingly omnipotent WPP will shoe-in business and operate a scorched earth policy, squeezing local companies out of business.

Ron Taylor, the chief executive of Plush Films, is keen to depict the company as filling a gap in the market and not just a WPP cash cow.

"Plush Films is an independent external television production company with its own premises, board of directors, management and infrastructure," he says.

"Plush was set up to produce television commercials on behalf of the clients of the shareholders Singleton O&M, JWT and Y&R. It offers the three agencies, and in turn their clients, flexibility, speed to market and increased control of the creative process."

Yet Stephen Gash, the joint managing director of the production company Large, is sceptical of WPP's underlying motives and questions its expertise in an area in which it has no experience.

"When it comes right down to it nobody knows the job of producing commercials like production companies - it's what we do," Gash says. "But we don't have a monopoly over the process and if an agency network wants to turn its hand to the task, then they are welcome to try. But I hope they are transparent about exactly who will benefit creatively and financially."

Taylor, one of the architects of the Plush business model, makes no bones about the fact that he feels there is room to do things more cheaply.

However, he is quick to point out that Plush - which has so far produced work for, among others, the fuel brand Caltex and the GlaxoSmithKline painkiller brand Panadol - is no bargain basement operation.

"Plush Films may well be more competitive than another company when submitting a bid and that happens to every company everyday. Plush Films will not undercut another company or sacrifice it's margins just to win the job."

The question of competition is a thorny issue. Reports that WPP was to guarantee a quota of 30 per cent of commercials production to Plush seem to prove the production industry's worst fears to be true. Panic waves of seismic proportions rippled through the industry and the Screen Producers Association of Australia came out all guns blazing threatening to boycott.

Russell Tate is the chief executive of STW Group, the holding company which owns Singleton O&M. This owns 66.7 per cent of Plush alongside the 33.3 per cent held by WPP. He accuses the industry of having a knee-jerk reaction thanks to misinformation.

"To clarify the 70/30 issue, it was a decision by the board that 30 per cent of the total TV production handled by the three agencies is a reasonable ceiling on the amount that Plush should take on," he explains. "But there are no guarantees that Plush will get that amount of work since it will have to win jobs on its merits. There certainly will not be a 'pool' of jobs set aside for only Plush to bid on, any more than there will be a separate 'pool' of jobs from which Plush is precluded."

Critics say that Plush won't attract quality directors and that agency clients will suffer as a result. And that creativity will come a distant second to revenue meaning high-end work will be eschewed in favour of churn 'em out retail stuff.

"No production company is going to willingly 'loan out' their directors to Plush for obvious financial reasons," Gash says. "With assignments increasingly being aimed at the top end or at the startling array of young new talent, then the directors who are going to be most interested in working with Plush are those who are currently not working at all. Is that the type of talent the creative will be hoping to use? I doubt it."

Taylor is keenly aware that a production company lives or dies on its creative merits. To him the idea of putting creativity anywhere other than at the heart of the Plush model would be business suicide.

"There is no issue with 'good directors' working with Plush Films. We have been operating for three months and we have produced commercials at the very top end of production budgets. There has been no problem whatsoever in whether directors will work for us," Taylor retorts.

"Plush Films is absolutely creatively focused. If creativity was to be sacrificed, the agency producers and creatives would be the first to realise this and Plush would therefore fail to win work it was bidding for."

The launch of Plush is reportedly a trial ahead of a global roll-out by WPP. Tate is cagey on WPP's future plans other than to say: "At present the Australian roll-out is being observed and there are no immediate plans or timelines in place."

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