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
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
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
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
Ambitious mobile operators are whole-heartedly welcoming this new
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
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
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.
The World: Insider's View - Germany
In a tough market, ad agencies must offer an integrated service and
a commitment to creativity if they want to see growth, Klaus-Peter
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
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.
Close-Up: Live Issue - A break with the past could give DFGW a
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
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
For the moment, the team is putting the best possible spin on its
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
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
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
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
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
December 1989: Breaks first work for London Fire Brigade.
August 1991: Takes steps to set up network of associated European
July 1993: Forms first board of directors. Duckworth moves to strategic
September 1993: Hires creatives Richard Flintham and Andy McLeod from
BDDH. Wins Energis account but expected £10 million spend fails to
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
October 1999: Rachel Walker, head of planning, quits to launch planning
August 2000: Hugh Cameron joins from McCann-Erickson as Walker's
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
February 2006: Finn steps down as chief executive. Waters, Cameron and
Tom Vick, the other joint MD, remain in charge of the business.
Close-Up: Live Issue - Is the Italian affair harming WPP's
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
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
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
"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 firstname.lastname@example.org email@example.com
CITY INVESTOR - Anthony Fry, head of investment banking, Lehman
"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
"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
"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
"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
Daniela Weber, the WPP Italia managing director, takes leadership of the
Italia group; Paul Richardson, the WPP finance director, is named acting
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
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
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.
Editorial: Diageo's drive a positive start but needs support
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
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.
Editorial: BT and Post Office give incumbents hope
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.
Opinion: Perspective - Top 300 shows rebirth of network-aligned
Francesca Newland, firstname.lastname@example.org
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
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
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
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.
Opinion: On the Campaign Couch ... with JB
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
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 email@example.com.
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
That means you have already lost your soul. God knows what you do
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
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
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 firstname.lastname@example.org or Campaign,
174 Hammersmith Rd, London W6 7JP.
Diary: On the QT ...
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
Diary: Daily Mail's MD Zitter turns Chiswick Charles Bronson
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
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
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
Diary: Publicis fingers German sister's foul Hot Pockets
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.
Diary: Haines talks up benefits of quick sleep on the job
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
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.
Diary: Johnny Hornby's charm can't avert a driving ban
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
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,
- Got a diary story? E-mail us at email@example.com or call (020) 8267
Diary: Pick of the Week - Mother/I Can't Believe It's Not Butter
Claire Billings is cheered by Mother's ad for I Can't Believe It's
"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
Diary: Turkey of the Week - Grey Barcelona/Seat Altea
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."
Diary: Water-cooler monitor