The World: Telefonica lays out its ambitions for mobile TV

The Spanish telecoms giant is banking on the new medium to become its next big revenue generator. Lucy Aitken reports.

Europe's largest all-cash takeover was not orchestrated by a British behemoth or a German giant, but a Hispanic Hercules. Telefonica snapped up O2, Europe's sixth-largest mobile operator, last month for a hefty £17.7 billion.

Thanks to this purchase, Telefonica now has a foothold in the UK, Germany and Ireland, making it Europe's second-largest mobile phone operator after Vodafone. It also gained an extra 24.7 million customers, giving it a grand global total of 170 million.

Jan Lindemann, the global managing director at Interbrand, comments on Telefonica's new status: "If you're in media and you're switched on, you should have an idea of who Telefonica is."

The company's chairman, Cesar Alierta, certainly enjoys a shopping spree.

In 2004, Telefonica snapped up a majority stake in the Czech operator Cesky, as well as BellSouth in Latin America. It is the leading operator in Brazil, Argentina, Chile and Peru, and has been present in the region for 15 years.

But its purchases haven't always made business sense. In 2000, at the height of the dotcom boom, it paid £3.8 billion for Endemol, the TV production company behind reality formats such as Big Brother and Deal Or No Deal.

In November 2005, Telefonica sold off around 35 per cent of Endemol for just £752 million by partially floating it on the Amsterdam stock exchange.

On account of its expensive acquisitions habit, Telefonica has sold off many of its media interests over the past five years. In 2003, it divested its 25 per cent stake in Antena 3 TV, followed by its 5 per cent stake in Pearson in 2004.

Broad geographical reach is pivotal to the future success of mobile operators: the more customers they can reach, the more premium-rate content they can sell them. Operators have pretty much fulfilled their optimum potential in voice services; their future lies in entering new markets, gaining new customers and finding innovative ways to sell them video, text or audio content on increasingly sophisticated handsets. There's extra revenue to be earned if advertisers or sponsors come on board.

Ambitious mobile operators are whole-heartedly welcoming this new dawn.

Last October, the chief executive of 3, Bob Fuller, declared that the mobile operator was "the first truly mobile media company" and announced plans to sell airtime to advertisers on its 3G network. And ntl seems likely to buy Virgin Mobile, which recently announced its intention to move into mobile TV. The link-up would offer mobile and fixed-line phones with broadband and TV services.

"The likes of Telefonica are all about increasing market share and they can do that through offering internet, TV or music services," Nitesh Patel, a senior analyst with Strategy Analytics, comments.

A spokesman for Telefonica Moviles points out that Telefonica's wireless internet service already offers TV. He adds: "Telefonica Moviles Espana has been working for more than three years on video and TV content for mobile. It has worked closely with TV producers to construct new formats that are adapted to mobile, such as short viewing times and small screen sizes." In 2004, it also collaborated with Endemol on the first interactive series created exclusively for mobile, FanTESStic.

Telefonica and O2 are both investigating the potential of mobile TV, conducting trials in Madrid, Barcelona and Oxford. Larger pilots will take place in Germany this year during the World Cup.

Mike Short, O2's vice-president of research and development, promises: "Some major German cities will have the facility to show live mobile TV on a mobile-TV handset. But we don't know yet if there will be an advertising element."

The advertising community is enthusiastic about mobile TV, according to Short, and mobile TV is operational in Korea and Japan. In fact, some Japanese mobile operators have created joint ventures with leading ad agencies and are selling advertising on their portals.

However, there are still a number of hitches to overcome before mobile TV takes off in Europe. It requires capacity on UHF and VHF spectra, which will not be available in certain countries until analogue is switched off. This could pose a problem in Telefonica's native market: digital TV has yet to take off in Spain, even though analogue switch-off is slated for 2010.

Other issues include rights-management. If Telefonica turns to established media owners to create content for its various platforms, who will own the content and earn revenue from advertising?

The titanic telecom may have made a bullish entry into Northern Europe, but it's the detail in the deals that will be its making or breaking.

MEDIA BY PHONE Telefonica's mobile TV content (Spain) Antena 3 Noticias: Mobile news content from Antena 3, Spain's largest commercial TV network. Updated every 15 minutes Lo Mejor de A3 (The Best of A3) A 24/7 channel providing comedy and drama clips from Antena 3 shows MTV: 24/7 mobile music channel CNN+: Live connection to the Spanish outlet of CNN Gran Hermano (Big Brother): 24/7 coverage from the Big Brother house.

Campaign 24/02/2006 The World: Insider's View - Germany Advertising Marketing In a tough market, ad agencies must offer an integrated service and a commitment to creativity if they want to see growth, Klaus-Peter Schulz writes. Last year was again a difficult one for the German ad industry. While other regions such as Asia and Eastern Europe experienced double-digit growth, the German market enjoyed no such success. The result is that only those who were better than the competition were able to gain ground in a tough, highly competitive market. Even though the leading business institutes in Germany can count on a slight growth of between 1.4 and 1.7 per cent this year, and a few are also hoping for a boost brought about by the World Cup, the situation will remain strained in 2006. Against this background, businesses across the board continue to focus on consolidation, mergers and acquisitions. On the industrial side, Deutsche Post took over Excel, the chemical giant BASF snapped up Engelhard and the trade company Edeka took over the supermarket chain Spar. The German media market is also experiencing plenty of movement. Burda Publishing, which publishes the news magazine Focus, took over the publisher Milchstrasse with its lifestyle titles such as MAX and Fit For Fun. The recent attempts of Springer Publishing (the owner of the newspapers Bild and Die Welt) to take over the ProSiebenSat.1 TV group were scuppered by the German cartel office, although the ProSiebenSat.1 major shareholder, Haim Saban, remains on the lookout for a buyer. These developments bring new challenges for German ad agencies, and those in the best position to reap the rewards are the networks. Clients are combining their budgets and using fewer agencies than ever before. Deutsche Telekom, for instance, recently decreased its agency roster from more than 30 to just four. While, a few years ago, clients would look for a specialised agency for each communication discipline, today the trend is very much for one-stop shopping, as clients increasingly expect an interdisciplinary and integrated offer from their agency. These trends will continue to influence the development of the German agency market. Agencies that focus solely on classic communication and refuse to look beyond the German market will find things difficult. The so-called creative agencies have also noticed this. Jung von Matt, for instance, expanded its digital department last year to avoid missing out on the growing sector. Springer & Jacoby also recently announced its intention to offer other disciplines. But they're playing catch-up with network agencies that diversified their services years ago. The biggest growth opportunities will be seen by the agency groups that can offer their customers the best integration concept to work in practice. This ranges from the most compelling content to intelligent channel planning and interactive media to produced brand experiences and events. We here in Germany can look, slightly enviously, at Great Britain, where quite a different spirit appears to dominate - driven less by solely controlling aspects and much more by creative ideas. - Klaus-Peter Schulz is the chief executive of BBDO Germany.
Campaign 24/02/2006 Close-Up: Live Issue - A break with the past could give DFGW a future Advertising Marketing The agency fell to 95th in the UK billings league during 2005. Can DFGW's management rebuild the shop, John Tylee asks. The most remarkable thing about DFGW is that it still survives in its current form. At one time, barely a week passed without speculation about a prospective buyer. Even as recently as three months ago, the agency looked destined to become the sparkplug that would ignite a spluttering Lowe London. But it was not to be. Last week, Michael Finn, having found the lure of life in Italy irresistible, became the third of the four partners, who founded the then Duckworth Finn Grubb Waters almost 17 years ago, to step down. Now the new management front line - Dave Waters, the creative partner, and the joint managing directors Hugh Cameron and Tom Vick - are determined to make the best of the hand Fate has dealt them. In some ways, it is the best hand you could be dealt: things could not get worse. The agency's billings in 2005 fell by 56 per cent to £7 million. It is now only 95th in the billings league, according to Nielsen Media Research. For a long time, DFGW has been in limbo. While it seemed content to wait for a buyer, the world was passing it by. As a result, it has shrunk and its reputation as a strong planning operation was badly damaged by Gary Duckworth's exit in 2003. The agency could use a big shot of adrenalin. For the moment, the team is putting the best possible spin on its situation. By not merging, the agency argues, it is still able to offer a genuinely independent alternative at a time when its peers (Miles Calcraft Briginshaw Duffy, Delaney Lund Knox Warren & Partners and VCCP) have chosen to forgo their fully independent status. Then there is DFGW's reconfigured creative department, where writer/art director combinations were abandoned two years ago in favour of bespoke teams. What began as a cost-cutting move has evolved into a more effective way of working, the agency claims. Meanwhile, optimism has been buoyed by the recent capture of the £14 million creative assignment for Expedia, the online travel brand, which lessens what some have seen as an unhealthy over-dependence by the agency on its BBC business. The winning streak continued this January with the capture of the TK Maxx creative account. The wins go part way to make up for the exit over the past two years of DFGW's once-signature General Motors account. The agency makes no secret of its disappointment at not having the opportunity to replicate the UK launch of GM's Daewoo marque ("That'll be the Daewoo") when it was rebranded as Chevrolet across Europe. "Daewoo was probably the most successful car launch ever into the UK," Cameron says. "It was amazing, considering the product was so appalling at the time." Given the pedigree of its founders, many have found it curious that DFGW never had a profile to match its late-80s contemporaries Howell Henry Chaldecott Lury and Simons Palmer Denton Clemmow Johnson. The reason is that the agency was not born out of a desire to be iconoclastic. It was much more to do with the fact Waters and Paul Grubb, then the deputy creative directors of Gold Greenlees Trott, had been given a taste of autonomy after a spat involving Dave Trott and the GGT board. By the time Trott resumed command of the creative department, the pair had resolved to do their own thing. They were not visionaries, just creatives who enjoyed doing big brand work and wanted to do more. "Gerry Moira called us a bunch of half-entities," Waters recalls. "It was about right because we had no great height from which to fall." In many ways, DFGW has delivered on Waters' hopes. The "hit the hut" line for Pizza Hut entered the national vernacular, while the agency's drugs education campaign for the Health Education Authority captured the IPA Effectiveness Awards Grand Prix. Today, with shareholding split mainly between the three principals (Grubb, now the regional executive creative director of Lowe Asia, remains a silent partner), clients and business prospects will need reassurance DFGW will not try to fatten itself up for a sale. The trio claim all the gossip about an imminent sale never matched reality. The only serious suitors were McCann Erickson about five years ago and, more recently, Lowe Worldwide, they say. Talks were aborted because of the ongoing financial problems at Lowe's Interpublic parent and Lowe London's loss of Tesco. "When we have interviewed people, one of the first things they ask is when are we going to sell the agency," Vick says. "But we've no intention of building the agency only to hand it over to somebody else." Cameron, Waters and Vick make an energetic team that has the potential to build the agency into a market player. Finn's retirement gives the trio the necessary break with the past that could enable them to build something new. So how will a newly energised and focused DFGW fare? "I think it is very well placed," Martin Jones, the AAR's advertising director, answers. "It's the right size for a lot of clients, while the Expedia win suggests it is big enough to handle high-volume business. What it needs to do is to regain its solid, down-to-earth approach with a planning-led positioning." DFGW FROM START-UP TO PRESENT July 1989: DFGW founded by Gary Duckworth, planning director at HCM/Horner Collis & Kirvan, Michael Finn, head of new business at Yellowhammer, and Paul Grubb and Dave Waters, deputy creative directors of Gold Greenlees Trott. August 1989: Wins first business: Lynx Express Delivery account. September 1989: Makes history by running a TV ad to announce its launch. December 1989: Breaks first work for London Fire Brigade. August 1991: Takes steps to set up network of associated European agencies. July 1993: Forms first board of directors. Duckworth moves to strategic role. September 1993: Hires creatives Richard Flintham and Andy McLeod from BDDH. Wins Energis account but expected £10 million spend fails to materialise. August 1994: Wins £7 million Daewoo and launches it in UK. July 1995: Flintham and McLeod join BMP DDB Needham. September 1998: Hired by Mothercare to develop brand strategy. November 1998: Charlie Dawson named managing director. Finn takes over as chief executive. February 1999: Prises Bhs creative account out of Saatchi & Saatchi. July 1999: Announces plans to launch standalone DM agency. September 1999: Dawson leaves to set up management and brand consultancy. October 1999: Rachel Walker, head of planning, quits to launch planning consultancy. August 2000: Hugh Cameron joins from McCann-Erickson as Walker's replacement. December 2000: Added to BBC's roster. May 2003: Duckworth scales down his involvement to start a career in management coaching. Agency buys back his shares. March 2004: Does not repitch for £7 million Learndirect business, which moves to RKCR/Y&R. July 2004: Grubb leaves the agency. February 2005: Cameron, now joint managing director, talks to Coca-Cola about a European advertising role. Wins British Red Cross. May 2005: Lowe in talks to acquire DFGW. December 2005: Talks abandoned after Lowe London loses Tesco. Wins £14 million creative account for the online travel brand Expedia. February 2006: Finn steps down as chief executive. Waters, Cameron and Tom Vick, the other joint MD, remain in charge of the business.
Campaign 24/02/2006 Close-Up: Live Issue - Is the Italian affair harming WPP's reputation? Advertising Marketing Will the ripple effect of the scandal dogging its Italian operation threaten WPP beyond the peninsula, John Tylee asks. National press headlines have made uncomfortable reading for Sir Martin Sorrell of late. "Benattigate takes a new twist as ousted Italian sues WPP" (The Sunday Times); "Sorrell's stumble; how a marketing mogul finds himself in an expanding imbroglio" (Financial Times). In Italy, the coverage has been no less spicy. "WPP-Benatti, the advertising war," La Repubblica proclaimed. As if that has not been bad enough, the WPP chief executive faces more unwelcome PR as a result of a legal dispute with the publisher Richard Desmond over the launch of OK! magazine in the US. Some who know Sorrell say events are weighing heavily on him. "I've never seen him looking less buoyant," a business associate says. For Sorrell, more used to having journalists hanging on his every word about the health of the global communications industry, this is a highly unusual situation. Not since 1992, when recession and high borrowings almost brought WPP to its knees, has the media coverage been quite so questioning. No longer can claims about the alleged financial irregularities at the centre of a legal confrontation between Sorrell and his former country manager, Marco Benatti, be dismissed as "a little local difficulty". While Italy accounts for less than 3 per cent of WPP's profits, the ripple effect of the affair threatens to spread far beyond Milan. Questions are already being asked about how effective an acquisitive organisation such as WPP can be in imposing a corporate culture and whether the group is vulnerable to further scandals. But the events also pose a more fundamental question: should Sorrell, whose energy and ambition has made WPP what it is and who is heavily involved in every part of its activity, retain such a heavy degree of control? WPP now has 91,000 people working in more than 2,000 offices across the world. Some believe Sorrell needs to fill the void created by the death in January 2001 of one of his closest confidantes, the New York lawyer Phil Reiss. As the president of the law firm Davis & Gilbert, Reiss helped broker the agreements that brought JWT, Ogilvy & Mather and Young & Rubicam into the WPP fold. Reiss was not only adept at constructing deals, but was renowned for his candid advice. Onlookers suggest Sorrell could do with having his undoubted strategic brilliance tempered by some wise counsel. "These headlines should be a massive wake-up call to Sorrell to take notice of what's being said behind his back," someone who knows him well says. "He has become to his company what Alan Sugar and Richard Branson are to theirs and there has been no succession planning." A UK media analyst says: "It's like having a personality championing your brand. If Sorrell slips, the WPP brand can be damaged." For the time being, the negative publicity has had little effect on WPP's operating networks. Indeed, there's mild amusement that Sorrell, infamous for being litigious, should find himself on the wrong end of a couple of writs. "Sorrell can get quite emotional when he feels betrayed," a senior manager at a WPP operating company says. "But he's willing to risk the bad headlines because he's aware of what happened to Interpublic and is determined to show WPP is cleaner than clean." - Got a view? E-mail us at campaign@haynet.com campaign@haynet.com CITY INVESTOR - Anthony Fry, head of investment banking, Lehman Brothers "This latest publicity looks like a storm in a teacup whipped up by some of WPP's aggressive competitors. I see no evidence that any of it will strike a chord with investors or that it will impact on WPP clients. It might have been different if this was happening in the political area. But it isn't. "Nor am I sure that this will increase the pressure on Sorrell to change his hands-on management style. You could just as easily say that given the size , reach, breadth and depth of the business, it's a testament to him that a problem like this has never arisen before. That being the case, I don't see questions being raised." CLIENT - Peter Stringham, group general manager, marketing, HSBC "I think the whole thing has become a nonsense and has been blown up out of all proportion. "I know nothing of the investigation in Italy and couldn't comment on it. All sorts of stories have been flying around about Sorrell's personal involvement but, as the chief executive, he has responded positively. "The affair has no effect on us. The appointment of Alison Burns as the chief executive of our agency, JWT, is far more important as far as we are concerned. "If the investigation in Italy turned up something that was a matter of concern for us, that would be a different matter. However, I think it unlikely and feel the matter will resolve itself." CONSULTANT - David Wethey, chairman, Agency Assessments International "In Zagreb there is still a Tito Square commemorating the Croat who held together the Yugoslav federation for 30 years. Now there are five separate republics. Sorrell has created a remarkable British success story: 91,000 people, hundreds of operating companies and thousands of clients including Unilever and Procter & Gamble. "WPP has recently been in the news for the wrong reasons. But does all this affect the way its famous agency brands operate? Is there evidence of client concern? I don't see it. There may yet be a Sorrell Square in London. But it might depend on how he and his board handle the collectivisation of power that must come soon." RIVAL - Maurice Levy, chairman and chief executive, Publicis Groupe "WPP is a very strong group and I don't think the current publicity will seriously affect it in the long term. Clients are more concerned about what's happening in their own agencies than at group level. "What might have to change is WPP's governance. Sorrell is like a spider in a web with all his operations reporting to him. That might have been right during WPP's terrible period during the early 90s when tight control was essential. Today it looks more like a dictatorship. "It's essential that Sorrell should be looking to appoint somebody who will take over from him. I've agreed to stay at Publicis until 2010 but I consider my most important task is to groom my successor." WPP HITS THE HEADLINES 9 January: WPP terminates the contract of Marco Benatti (pictured), the WPP Italia country manager, after a row over Benatti's earn-out clause. Daniela Weber, the WPP Italia managing director, takes leadership of the Italia group; Paul Richardson, the WPP finance director, is named acting country manager. WPP and Benatti appoint lawyers, and Sir Martin Sorrell drafts in the corporate investigator Kroll, and the WPP auditor Deloitte & Touche. 14 and 21 January: The WPP Italia headquarters in Milan are broken into on successive weekends. Benatti's office is the focus of the break-ins, according to sources. 22 January: Reports that two WPP board members - Christopher Mackenzie and Paul Spencer - are understood to be raising concerns over the holding company's corporate governance appear in The Sunday Times. Other board members are believed to be worried by the lack of a succession structure in the holding company. 29 January: Investigations by WPP into alleged fraud in its Italian operation reveal Benatti is a majority owner of Mediaclub, a media agency he introduced to WPP in a deal for which WPP paid him £140,000 in commission. Benatti later claims he was unaware of his Mediaclub ownership interest, which was through an investment fund run by his brother Vittorio Benatti. In a further blow, reports emerge that Weber has had affairs with Benatti and Sorrell. Benatti denies an affair. 30 January: Benatti increases his stake in the Italian marketing services company Fullsix to 41 per cent, triggering a mandatory offer. WPP owns a 26 per cent stake in the company. WPP has alleged that Benatti may have steered WPP clients towards Fullsix, something Benatti denies. 5 February: Sorrell sues Benatti over the alleged Mediaclub fraud. Benatti counter-sues WPP for wrongful dismissal and threatens to bring a personal action against Sorrell, who he says is pursuing a personal vendetta. 12 February: Legal action opens on a second front, with WPP and Richard Desmond (pictured) trading law suits in the US and UK over the Northern & Shell title OK!. WPP alleges Desmond failed to pay £5.7 million for work on the title's launch. Desmond counter-sues for a failure by WPP to support off-air aspects of the launch. 20 February: Reports emerge WPP is widening its investigation into the ownership of TV production company BRW and marketing agency Babila.
Campaign 24/02/2006 Editorial: Diageo's drive a positive start but needs support Advertising Marketing Drink A young man walks into a pub and recoils at the sight of his alter-ego making a drunken spectacle of himself; a girl at a party looks in a mirror to see a double of herself stumbling around the room in a drunken stupor. Both are scenes from a new TV campaign by Diageo. It is aimed at encouraging moderate drinking under the theme: "Make sure you like what you see." The company says it will put up £1.5 million to underpin the campaign and is asking that other drinks manufacturers contribute at least a similar amount. Whether it is altruism or public opinion that has spurred Diageo into action is debatable. What is certain is public attitudes toward excessive drinking and other health issues are changing more rapidly than anybody would have thought possible just a short while ago. The widespread support for a clampdown on smoking in public places and moves by snack-food manufacturers to reduce the sugar and salt content of their products drastically are evidence enough of this. As one commentator recently observed: "Health is the new religion." And woe betide any advertiser who fails to take account of the fact. The drinks industry more than most needs to be seen to be acting responsibly. While rules governing the promotion of alcohol were significantly tightened last year, there were a worrying number of previous incidents when TV ads were allowed to stray across the boundaries of acceptability. The best that can be said of Diageo's latest Drink Aware initiative is that it is a positive start. Even if consumers are receptive to health messages, advertising alone cannot change drinking habits while so many young people still go out with the intention of drinking themselves into oblivion. Campaigns encouraging sensible drinking will only work alongside other measures. Finger-wagging advertising will count for little if nothing is done to curb happy hours, "two-for-one" offers and the proliferation of bars. The drinks industry should support Diageo's drive, if only to protect its own interests - if 24-hour drinking fills the UK's streets with drunken louts this summer, it is a fair bet advertising will take a disproportionate share of the blame.
Campaign 24/02/2006 Editorial: BT and Post Office give incumbents hope Advertising Marketing Telecommunications Business To Business Repitching for business may not be the lost cause everyone thought it was. Last year, AAR research showed just 5 per cent of incumbent agencies retained business in a repitch. Since then, Abbott Mead Vickers BBDO has held on to BT and Sainsbury's. Last week, the Post Office opted to keep £35 million of business with Publicis and Joshua. It just goes to show confidence and tenacity can upset the form book.
Campaign 24/02/2006 Opinion: Perspective - Top 300 shows rebirth of network-aligned giants Francesca Newland, francesca.newland@haynet.com Advertising Marketing Database/Data Solutions There's change in the air. At first glance, you could be forgiven for thinking it's business as usual in the Top 300 rankings. After all, in the creative billings league, the top ten is largely unchanged. But there is some devil in the detail. The most breathtaking activity has come from the mid-sized agencies. Wieden & Kennedy's billings are up by 89 per cent; Clemmow Hornby Inge's by 61 per cent; Miles Calcraft Briginshaw Duffy's and Mother's by more than 30 per cent and Delaney Lund Knox Warren & Partners', VCCP's and Fallon's have all risen by about 20 per cent. For about five years now, ever since the dotcom crash, these agencies have been growing and growing, normally at the expense of the network giants. No change there, you might argue, but two factors are likely to stifle this growth going forward. The first is that three of the growth engines - VCCP, MCBD and DLKW - sold their independence in 2005. This does not go hand-in-hand with a slowdown and, no doubt, their new parents are hoping that ambitious earnout targets will keep the growth coming. However, selling out represents an important cultural change; the principals are now working to enrich their new bosses. The much more tangible threat to the continued growth of these shops is the recovery of the network-aligned giants, however. Abbott Mead Vickers BBDO was fighting fit in 2005, defending its BT and Sainsbury's accounts in pitches and managing a 2 per cent rise in billings. More impressive growth - about 13 per cent apiece - came from DDB and Rainey Kelly Campbell Roalfe/Y&R. Ogilvy & Mather's international clients have delivered it a 10 per cent hike. Expect this to continue. Reading the "school reports", there is evidence that many of the network shops - AMV BBDO, Saatchi & Saatchi and RKCR/Y&R among them - have rethought their positioning and regained a sense of purpose. In their current leaner, fitter and hungrier state, they can look forward to stealing back some of the domestic business lost to the local independents. Meanwhile, the story behind the media billings league is more extreme, although less surprising. Consolidation is much in evidence with the top two buying agencies - WPP's MediaCom and MindShare - pulling ahead of their rivals. Half of the top 20 agencies suffered negative growth, fuelling the seemingly unstoppable rise of the shops at the top of the league, particularly those owned by WPP. This is partly what makes Carat's parent, Aegis, such a hot takeover target. With billings up by 16 per cent in the UK, the acquisition of Carat could counter-balance WPP's dominance. Future revenue growth for the agencies at the top of the league will be difficult, however. Obvious client gaps are few and far between and WPP's agencies in particular have already suffered losses coming as a result of conflict. The pressure will be on to push these replete client bases into buying their respective agencies' direct and digital offers. Life could not be more different for the two heads of WPP and Omnicom just now. While Sir Martin Sorrell awakes daily to a new scurrilous headline (Close-Up, page 19), Omnicom's John Wren can afford to celebrate as his holding company turns 20 (page 24). Wren's Omnicom story is one of consistent organic growth, a low profile and a hands-off management style, a very different recipe for success from that of his WPP counterpart. That Wren has achieved such success while keeping creative integrity intact at his three principal networks is an achievement that will stand him in good stead for the future. It's the best creative work that will stand out and survive in the fragmenting media world. - Claire Beale is on maternity leave.
Campaign 24/02/2006 Opinion: On the Campaign Couch ... with JB Jeremy Bullmore Advertising Marketing Q: I am an advertiser who is a great admirer of my agency, which produces some cracking commercials for me. The thing is, its business model is all wrong and I can't see it lasting the next five years without running into serious trouble. I could, of course, move my business elsewhere if need be. But do I have the right to tell my agency it needs to rip it all up and start again? A: As well as knowing what's wrong, I wonder if you also know what's right? Or righter? Or even less wrong? If so, I'd have thought your agency would have welcomed your diffident intervention. The main thing that's wrong with the business model of creative agencies is that they still haven't worked out how to get paid. The commission system was stoutly defended for 100 years, despite being indefensible. In retrospect, it seems a model of equity. To be paid on the basis of man-hours expended is to reward over-manning and sloth and is totally to ignore the value of invention. Yet invention is what clients appoint agencies in the wistful hope of getting. So it obviously makes more sense to base reward on the commercial value of the creative work delivered: on that we can all agree. However, no-one's yet found an undisputed method of calculating the worth of an idea; and even supposing they do, it will only be possible retrospectively which means that the agency will have to wait ten years to get paid, by which time it will be out of business. If you have cracked this one, do please get in touch with some urgency - not just with your own agency but also with hamish@ipa.co.uk. Q: I'm a youngish creative and I've been quite happy to work at the same agency for the past six years on the same account - but over the past few months I've started to get itchy feet. The problem is that my book is looking really stale and I'm not sure what to do about it. I really want my next move to be a good one, but I'm worried that I don't look an attractive enough prospect to get on to a really creative account. Is it worth quitting my current job and freelancing for a while in an attempt to get a bit of variety back on to my reel? A: You're right to be worried. Six years with the same agency is OK. Six years on the same account (and your only account) is not OK. You might just as well be on the client's payroll and be done with it. Even if you've earned a reputation for being The World's Best Ready-to-Eat Cereal Copywriter, that limits your career options to agencies that also handle ready-to-eat cereals. To be The World's Best Ready-to-Eat Cereal Copywriter is all the evidence that people need that you'd be absolutely useless at writing copy for cars or cosmetics. And the same applies if you're The World's Best Ready-to-Eat Cereal Art Director. Start by talking to your creative director. Don't cut up rough: be disconcertingly reasonable. You're much more likely to get an opportunity to work on a variety of accounts from your existing agency than from a new one: though that depends on how your existing agency rates you. Which you're about to find out. The worst news you can hear is that you've got to go on working full-time on your ready-to-eat cereal account because the client loves you. That means you have already lost your soul. God knows what you do then. I suppose your freelance idea is an option but I'm nervous. With your book/reel as they look at the moment, you'd probably only be of interest to a ready-to-eat cereal account - almost certainly the one you'd just resigned from. Q: My business partner is having an affair with someone in the office. I'm worried the affair could distract him from driving our business forward and that it could damage her career in the long run. I'm reluctant to have a word with him, however, as I don't want to fall out. How should I play it? A: Write the script in your head and see how it plays. "I understand, Nigel, that you're having an affair with Gwendolyn. I'm concerned that this may distract you from driving our business forward. I furthermore fear that Gwendolyn's career may be adversely affected. I'd be grateful, therefore, if you'd desist with immediate effect." To which Nigel replies: "Thank you, Derek. I'm grateful to you for both your courage and your counsel. Consider my regrettable affair to be terminated." Probably not. Your business may be your business but what Nigel and Gwendolyn get up to isn't. Forget it. - "Ask Jeremy", a collection of Jeremy Bullmore's Campaign columns, is available from Haymarket, priced £10. Telephone (020) 8267 4683. Jeremy Bullmore welcomes questions via campaign@haynet.com or Campaign, 174 Hammersmith Rd, London W6 7JP.
Campaign 24/02/2006 Diary: On the QT ... Advertising Marketing Christine Walker, the Walker Media founder, was literally fuming following last week's decision to ban smoking in public places. Agency sources say that the chain-smoking Walker has vowed to relocate from these shores to her home in the South of France when the ban is introduced next year ... Many a plot is hatched (and often forgotten) over a few bottles of Sancerre of an evening. But imagine the surprise of Harrison Troughton Wunderman's creative director, Steve Harrison, when he was reminded by his fellow creative director, Steve Stretton, that during a recent session he had agreed to help him buy The Mortimer, Archibald Ingall Stretton's favourite (and closest) watering hole. Fortunately for Harrison, nothing was signed ... There was much hilarity at ITV's presentation to agencies and advertisers last week. Introducing guest speaker Sir Martin Sorrell, the ITV chief executive, Charles Allen, made a side-splitting "don't mention the war"-style quip about Italy and Richard Desmond. Attempting to enter into this light-hearted banter, albeit through gritted teeth, Sorrell responded with a rib-tickler about OK! launching in Italy ... Allen was one absentee from the ITV commercial team's tables at last week's Brit Awards, although the rest of ITV was there in force. Among their esteemed guests was COI's chief executive, Alan Bishop, who, keen to refute Campaign's suggestion in his A List lowdown that his "party boy" reputation is now behind him, carried on well into the night in the company of Sir Trevor McDonald and a bevy of ladies including Michelle Ryan (aka Zoe Slater in EastEnders) ... Also at the Brits was the Carat managing director, Neil Jones, who is fast turning into the media industry's friend to the stars. As well as hobnobbing with the cream of the music industry last week, Jones was spotted wafting down the red carpet at the Baftas with Hollywood's A-list.
Campaign 24/02/2006 Diary: Daily Mail's MD Zitter turns Chiswick Charles Bronson Advertising Marketing The streets of Chiswick have long seemed a safe haven for the media industry. Normally, there is nothing more menacing lurking around street corners than iPod-packing BBC executives. But this haven of tranquillity is only preserved by the bravery of have-a-go-heroes such as Guy Zitter. A couple of weeks ago, the Daily Mail's managing director was jumped on by young thugs outside his W4 home. While less ferocious media types might have meekly handed over their possessions, Zitter fought back against the muggers and gave chase. As many in the business can testify, the sight of the pint-sized Zitter in full cry alone is an alarming one. He added to the thieves' anxiety by making a 999 call on his unstolen mobile while in pursuit. Simultaneously, Zitter's wife, Julie, having heard the roadside kerfuffle, got in the family car and joined her plucky husband in the chase. They were able to keep track of the robbers and, staggeringly, their actions led to the police arriving and capturing the perpetrators. While the modest Zitter plays down his crime-stopping actions, we now look forward to numerous Daily Mail features on the growing menace of street crime and the need for a mean rottweiler to scare off would-be thieves.
Campaign 24/02/2006 Diary: Publicis fingers German sister's foul Hot Pockets Advertising Marketing Nothing gets agencies more nervous than the prospect of having their work appear in this esteemed organ's Turkey of the Week slot. But remember, Campaign's staff are normal people who, week in, week out, have to trawl through many rough diamonds to uncover the gems. With this in mind, all agencies are fair game. Or are they? One agency is apparently so worried about being credited for an ad by one of its sister agencies, it decided to pre-empt the inevitable Turkey by alerting Campaign to the fact it was not created in London, but Frankfurt. Shame on you Publicis London for dobbing in your Frankfurt office for its Nestle's Hot Pockets ad and for getting your PR company to do your dirty work. After several phone calls to Campaign Towers, the following e-mail arrived from Publicis London's PR agency The Media Foundry: "Just to let you know, I left a message earlier re: Turkey of the Week. Publicis are concerned that you might pick Nestle's Hot Pockets. They just want you to know Frankfurt did it! That's not an invitation to pick it, though, clearly!" Diary doesn't need to pick it now, so thanks for saving us the hassle.
Campaign 24/02/2006 Diary: Haines talks up benefits of quick sleep on the job Advertising Marketing Imagine you are a client visiting Leo Burnett's London offices in Kensington Village. You arrive and are surprised to see two large, egg-like objects in the reception area. You move closer to investigate and surprise turns to alarm when one of the objects suddenly opens and out of it emerges the director in charge of your business, crumpled and rubbing their eyes. While Diary appreciates that this sounds like a rubbish re-enactment of that scene from Alien, there is a strong possibility that these events could actually take place after a news item on BBC1 on Saturday morning. In it, Bruce Haines, Leo Burnett's chief executive, was seen extolling the virtues of the agency's new power-napping policy. While this might sound to some like a typical ad industry gimmick, there is, in fact, an explanation. The sleep pods were created by Burnett's integrated arm, Arc Worldwide UK, as part of a campaign for its client Procter & Gamble. The pods were designed to aid productivity because the body's rhythms start going haywire between midday and 3pm and a short sleep is said to improve staff performance. The pods were such a hit for P&G that Arc introduced the concept for use by its and Burnett's staff. So it wasn't a shameless stunt to garner some TV coverage, then.
Campaign 24/02/2006 Diary: Johnny Hornby's charm can't avert a driving ban Advertising Marketing It is not often that Johnny Hornby - account handler extraordinaire and the co-founder of one of London's fastest-growing advertising agencies - finds himself in a spot so tight he cannot manage to talk himself out of it. However, getting caught speeding last week for the fourth time in six months was a pickle out of which even the notoriously silver-tongued Hornby could not manoeuvre himself. That he was driving his silver Porsche 911, which he only took delivery of last summer, adds to the story's comedy value. According to sources, Hornby's efforts to account handle his way out of the penalty backfired spectacularly: instead of taking pity on him, the judge chose to make an example of Hornby and hit him with a two-month driving ban. On the bright side, it's good news for Clemmow Hornby Inge's taxi company, as Hornby's aversion to public transport is renowned. Watch out for CHI's next win - the advertising account for a chauffeur service, perhaps? - Got a diary story? E-mail us at campaign@haynet.com or call (020) 8267 4656.
Campaign 24/02/2006 Diary: Pick of the Week - Mother/I Can't Believe It's Not Butter Advertising Marketing Claire Billings is cheered by Mother's ad for I Can't Believe It's Not Butter: "Mother has jumped on the Ozzy bandwagon brilliantly with a cracking idea and an even better script. The ad is filled with genuine comedy moments, but the payoff line Ozzy delivers in his unmistakable Brummie drawl upon discovering he's following a fairy cake recipe is genius: 'I'm the Prince of Darkness, I'm making rock cakes.'" The ad was written and art directed by Mother and directed by Danny Kleinman through Kleinman Productions.
Campaign 24/02/2006 Diary: Turkey of the Week - Grey Barcelona/Seat Altea Advertising Marketing James Hamilton is considering selling his TV after catching the latest ad for the Seat Altea, created by the Grey Barcelona shop Atletico Advertising, for the nth time: "I thought it would be some time before a tennis player managed to trump the God-awfulness of Andre Agassi in his T-Mobile spot, but John McEnroe manages to slide below that creative bar with ease. A terrible script, plank-like acting and the underlying insight - that the Seat Altea is a bugger to park - all contrive to serve up a classic Turkey."
Campaign 24/02/2006 Diary: Water-cooler monitor Advertising Marketing