Age may wither them and custom stale their limited variety

I was struck by WPP chief Sir Martin Sorrell’s comment on the marketing services industry at ad:tech this week. “The people who run agencies tend to be of an older vintage – to put it politely,” he said. “They tend to be resistant to change and want to spend the last three to four years of their careers travelling around the world rather than dealing with fundamental strategic issues on a daily basis.”

They should be so lucky to reach “an older vintage” these days. The number of people over 50 who are active in the ad business is a vanishingly small figure, according to Incorporated Practitioners in Advertising (IPA) figures, and it’s getting smaller all the time. One particularly endangered species seems to be the heads, or group heads, of UK network creative agencies.

To take a small but illuminating sample, Gary Leih, group head of Ogilvy (just over 50), and Tim Lindsay, president of TBWA\London (53), have both been put out to pasture recently. We could perhaps add the case of Bruce Haines, group chief at Leo Burnett, who managed to stay the course until the ripe old age of 55. And the comparatively youthful former chairman and group chief executive of Saatchi & Saatchi, Lee Daley, who moved on in his late forties to an all-too-brief spell as marketing director of Manchester United. While we’re there, let’s tie in the long time management void at the top of Lowe, and the problems in filling the top slots at Publicis UK a couple of years ago when the self-same Lindsay left for TBWA.

To go back to Sorrell, I’m not sure anyone – other than himself perhaps – is capable of dealing with “fundamental strategic issues on a daily basis”. Just one or two over a two-year period is usually enough. As far as I can see, that’s exactly what Daley, Leih and Lindsay tried to do. They all instituted fairly far-reaching management changes in an effort to meet the digital challenge subverting traditional agency structures. With hindsight, the problem seems to be that they were judged not to have gone far enough. Or, put another way, they may indeed have embraced a “fundamental strategic issue”, but they were not allowed long enough to savour their triumph. The truth is, if an agency doesn’t bring in enough big business in the first two years of your tenure, you’re likely to be turfed out in the third. The digital challenge may simply have made it a little harder to win that business in the first place.

Lindsay was probably on skid row once his agency lost the advertising accounts for McCain and French Connection to Beattie McGuinness Bungay. He was lucky to survive the subsequent – abortive – attempt to buy BMB. Pinning the Media Arts rebranding fiasco on him sounds like the thinnest of subterfuges employed by a management that had long since lost confidence in him – fairly or otherwise.

Is Kraft’s Crunchie approach going flaky?

Cadbury is not looking such an endangered species after a set of third quarter results from Kraft that failed to wow. Unlike Cadbury’s own sparkling financial performance unveiled the other week. Where was the sucker punch before the knockout blow –  a firm bid on the table by next Monday? Or maybe that was exactly the point: Kraft is seeking to lull Cadbury into a false sense of security before Kraft ceo Irene Rosenfeld delivers the coup de grace. “We remain interested but will maintain a disciplined approach” to the Cadbury bid was her muted gloss on the Q3 results. You bet she remains interested. If she fails to produce a convincing bid, she’ll soon be history. No one at Cadbury is in any doubt that she will deliver.

More Horlicks from Michael O’Leary

I have often thought that Michael O’Leary would be perfectly cast in a Horlicks ad. You know, the ones that star a dastardly traffic warden, bus or taxi driver, with the endline: “How does he sleep at night?”

The rambunctious one has been at it again, manufacturing a public tantrum against Boeing, which supplies Ryanair’s fleet. The US airframe maker has had the audacity to reject O’Leary’s outrageous ‘recession-priced’ discount on up to 200 new jet liners. Once bitten, twice shy apparently. After 9/11, when the industry was on its uppers, O’Leary managed to screw what he himself described as “rapacious” discounts out of the manufacturer. Airbus, the only competitor in the field, won’t touch O’Leary with a bargepole.

His response? “If we don’t get a deal with Boeing before the end of the year we’re going to … begin to run the business from 2012 for maximised profits.”

Whatever has he been doing up to now? Running Ryanair as a charity? If so he’s been the principal beneficiary. Shareholders must be heart-broken to learn they are about to receive a dividend for the first time.

Banking on marketers

This week, EU competition commissioner Neelie Kroes has set in motion profound changes to the UK banking system. As a result of her decree, the big boys – Lloyds Banking Group and RBS – which have been in receipt of so much of our money will be broken up. For much the same reason, the more specialised Northern Rock is being split into a “good” and “bad” bank, with the good part being speedily returned to the private sector.

The net result will be transformation of our high street banks. Three new banks will come on the scene, accounting for about 15% of the market, and they will not be owned by any of the Big Five that currently dominate our system.

That means more competition. But there are other reasons for predicting a better deal for consumers – and better career opportunities for marketers – over the next five years. Shorn of the cartel power that goes with being a part of a global bancassurance operation, retail banks will have to fight harder for their funds. And there’s only one place they’re going to be getting them: from you and me. That means more customer focus, and more scope for marketing ingenuity.

More in my column this week.

Tales of the Recession. Part 2: Sir James Dyson

No blades, no buffeting is the strapline of Sir James Dyson’s latest innovative product, the Air Multiplier fan. You certainly couldn’t accuse its inventor of being like that. Emollient and smooth he is not. But he is very passionate about what he believes in.

And one thing he loathes viscerally is the parasitical financial system that has brought the UK economy to its knees. Wealth for wealth’s sake simply won’t do. Why can’t we make money from actually making things? As we used to, he might have added.

It’s a fair question, and in posing it authoritatively Dyson lays claim to being the latest in a long but thinning line of great British engineers: James Watt, Matthew Boulton, George Stephenson, Isambard Kingdom Brunel and Sir Frank Whittle. When I say “engineers” I mean they were – like Archimedes – far more besides: inventors, fearless contrarians, entrepreneurs and industrialists rather than merely technical experts or industrial designers (though they were certainly that as well).

Somewhere, in the later 19th century, Britain took a wrong turn. It forsook the straight and narrow path of technological innovation, at which it had excelled, for the broad and spacious ways of Mammon. Without thinking, we lionise celebrities; yet, as Dyson eloquently points out, nowhere in Britain will you find a statue of his hero Sir Frank Whittle, inventor of the jet engine. Why is that?

There was finance aplenty, even in the Depression, but almost no one was interested in Whittle’s idea at the time. Least of all the Air Ministry, which fought him tooth and nail until a race against time with Nazi Germany eventually forced them into producing the Gloster Meteor jet fighter.

As with war, so with financial disaster. Both can be accelerants of change. Certainly change is what Dyson hopes will emerge from the current recession. A strong technology sector would have defensive qualities in a downturn, and help to redress the imbalance in our economy produced by flaky financial services. With this in mind, he has already nailed his colours to the mast of the Conservative Party, as leader of a taskforce on innovation.

His own (privately-owned) company is the living proof of Dyson Economic Theory. The foundation of his £500m fortune was the cyclonic vacuum cleaner (USP, it doesn’t lose suction as the drum fills up with dust, unlike conventional cleaners). It was brought to market in the teeth of extraordinary scepticism from the manufacturing and financial communities. Once it proved a best-seller – quickly consigning most conventional cleaners to oblivion – Dyson found himself involved in a seemingly endless legal guerrilla war to forestall his rivals from ripping off the proprietary technology. Today, a triumphant Sir James can afford to smile tolerantly at all this, as he sits atop one third of the market by value in the US and UK. It is achievements like this which have enabled him to grow his profits even during the recession. Not many of us can say that.

Whether Dyson’s achievement lays a template for others to follow I’m not so sure. There have been plenty of failures along the way (as there usually are with pioneers) – most conspicuously the twin-drum washing machine. It takes a particular kind of pig-headed genius to stare disaster in the face and yet remain unalterably convinced that your idea is the right one.

One-off or not, Dyson has already secured a place in history. It may not be the heroic, romantic legacy of a Brunel, with his bridges, tunnels, railways and steamships. But it is one we can’t fail to notice, in our living rooms, utility cupboards and – in the case of the Airblade – our public conveniences as well. And, unlike Brunel, Dyson will never die a near-pauper.

We’re all in the soup now, Luv

Ever tried predicting the future with Alphabet Soup? It’s easy. You just pick up an amorphous piece of pasta, dunk it in the hot liquid and – Hey Presto!  – the emerging letter tells you what’s going to happen in the next few months. Anyone can play and lots of people do, including  leading economists and captains of industry. Some reckon it will be the top-ranking game this Christmas. It certainly beats econometric analysis for fun.

Still not convinced you want to play? Well here’s a simple example to encourage you. Take the letter ‘V’. Spot that in your soup and it means the recession will be deep, but short-lasting, with a steep and symmetrical recovery. If it’s ‘L’ you happen upon, I’d put it back if I were you and leave it to someone else. It’s like the electrocardiogram stopping: meaning, there won’t be any recovery for several years and your business will probably die.

Luckily, ‘L’ is a rare letter. More likely, you’ll hear of people coming up with a ‘W’. Don’t listen to them. They’re reheating last month’s soup in the hope of sounding awfully wise. No one in the swim thinks ‘W’ is going to be the winning letter any more. Some claim to have seen a ‘VW’: either they’re indecisive, or they’ve been spending too much time in a camper van recently. Then there are the clever clogs. They believe the future can be predicted with mathematical precision, and they’ve got the formula to prove it. It’s √. We’ll sort of. The trouble is the look of the square root symbol, which is what they’re on about, depends on the font you use. The plateau bar could be anywhere along an indefinite length of upstroke. So it’s no help to anyone. As I say, clever clogs.

However, the most inscrutable, and probably unbeatable, combination to date is the so-called LUV pattern. Apparently it means: West Europe L-shaped, US U-shaped and BRIC V-shaped. But we only have Sir Martin Sorrell’s word for that, because he’s the only one who’s seen that shape so far (although he has confessed he got the idea from Reuters). Sorrell is a past-master at the Alphabet Soup game. During the last recession, he was the principal backer of the U-shape. When recovery stalled, he hedged his bets a bit and came up with the bath theory, later the corrugated bath theory. Which is simply not playing the game.

Still, we’ all know after Christmas who’s right, won’t we?

Kellogg has the last laugh

When Kellogg announced it was lasering its brand name on Cornflakes, to avoid any confusion with own-label imitators, the reaction was derision mixed with incredulity. Surely even Kellogg can’t be that paranoid? Or, on reflection, maybe they’re having a laugh… In fact, come to think of it, this is a super-sophisticated stunt. They’re not really spending all that money on proprietary laser technology at all; it’s just a clever way of getting journalists to put their ‘pure branding’ message across free of charge…

Well, not exactly. The first thing to know about Kellogg is that it doesn’t do humour or wind-up. They’re deadly earnest over at Battle Creek, Michigan. It turns out they really have been experimenting with laser branding – on Pop Tarts in Canada. But ridicule isn’t the right reaction either. Kellogg just does everything by the book. And as a result, competitors will now be smiling on the other side of their face.

Because Kellogg has just produced a recession-busting set of financial results. And the reason? Religious adherence to the Book of Branding, of course. See chapter two, Advertising During a Recession, in particular. Last quarter, they increased spend by 17%. Next quarter, they plan another double digit rise. “Rather than take advantage of lower rates to reduce the cost of our advertising investment, we see this as a great opportunity to increase our investment and build even stronger brands in the future. Higher spend combined with media deflation and a push on efficiency is driving a significant increase in advertising pressure,” says Kellogg chief financial officer John Bryant. So there.

BBH director defects – but not to WPP

I see the diaspora of talent from BBH has claimed another emigré. This time, it’s from the creative department. Mick Mahoney, a creative director, has quit to become ECD at Euro RSCG – which has been bereft of a creative chief since Mark Hunter went to TBWA\London, back in April.

At least Mahoney didn’t defect to a WPP agency. For a while, it was beginning to look personal; or, alternatively, as if WPP lacked imagination in the talent department.

Is own-label really Miles better? Or Becht simply best?

Who’s right, Miles Roberts, ceo of McBride – own-label purveyor to the likes of Tesco and Carrefour – or Bart Becht, ceo of Reckitt Benckiser and arch-high-priest of the cult of the brand? Both claim to be winning the battle for the hearts and minds of consumers. Both can produce ample evidence to support their conviction.

Roberts is sitting atop a sparkling set of first quarter financial results. He’s had an altogether good year, with McBride earnings well above trend as consumers look more critically at their shopping list in the midst of recession. This particular Q1 set were so good that there will be no need of Tesco own-label teeth-whitener to bring a gleam to Roberts’ smile. McBride’s share price shot up 10% as City analysts jostled to upgrade their underpowered year-end forecasts.

But Becht has been no slouch either. Profits for the maker of Cillit Bang, Vanish, Dettol and Finish were up 40% last year, and the City was just as eagerly awaiting his news and views as Q3 announcement time hoved into view.

And he has not  disappointed. RB has just released its own set of stunning quarterly results: profits were up 25%. A tribute, says Becht, to “our 17 Powerbrands, …. significant investment in media and marketing, and successful new product initiatives.”

“We see no let-up in the demand from retailers for great value and great performing products,” says Roberts. “The only way we you can do that is with own-brand.”

Not so contends Becht: “We are typically market leaders in higher growth categories. We clean dishes not shoes. I don’t have to tell you why. Penetration of dishwashers is going up but shoe polish is not growing because there are fewer people using these products.”

The impression we are left with is that own-label is growing, but RB is taking a larger slice of the high-margin branded sector that remains. It can do this because RB’s powers of innovation in engineering higher-margin products is second to none. Only, it’s not that simple. Part of McBride’s success has stemmed from greater product specialisation and innovation. It would appear that Roberts is no more interested in “shoe polish” than Becht. Instead McBride has been doing exactly the same as RB: engineering higher-margin products such as a five-in-one dishwasher tablet.

So in answer to the question: who’s right?  – it’s neither and both. A case of Frank Sinatra marketing: “I did it my way.”

Trafigura, Pepsi and the Mail buckle before the power of the internet

What links Trafigura’s “super-injunction” furore, Pepsi’s “Amp Up Before You Score” fiasco and the row that has erupted over Jan Moir’s alleged homophobia in the Daily Mail? Answer: all three have found they are no match for the internet and social media.

I have no desire to dissect Moir’s insinuation of “unnatural” causes in her article on the death of Boyzone star Stephen Gately. I have no need to. Baroness Peta Buscombe, recently installed as chairman of the Press Complaints Commission, will find her emailbag full enough with the outpourings of a campaign spontaneously generated through Twitter and Facebook without me adding anything to her workload. Good luck with that one, Peta.

One predictable turn of events in “Moirgate” has been the slippery attitude of advertisers who, the minute the heat was turned on, asked to be dissociated from the article. Marks & Spencer’s reaction was typical: “Marks & Spencer does not tolerate any form of discrimination,” said a spokesman for the retailer. “We have asked the Daily Mail to move our advertisement away from the article. This is a matter for the Daily Mail.” Er, no it’s not, or not exclusively. If you allow your media buyer to buy into a certain demographic, in this case the meat-and-two-potatoes prejudices of Middle England, you presumably know what to expect, and should not be surprised or manufacture offence when the Daily Beast serves them up with trimmings. As for the Beast itself, it has been bloodied by an unwonted confrontation with populist outrage. About the only thing it hasn’t done, amid all the fawning self-exculpation, is to actually withdraw Moir’s article online, although it has neutered the innuendo-laden headline.

But if the Daily Mail is out of touch with digital culture, its ignorance is not a patch on that of Trafigura, the oil trading company which has been doing its damnedest to mount an out-of-date cover-up of its iniquitous dumping operations off Ivory Coast. That it did not succeed is largely due to the long arm of Carter-Ruck, a bunch of overweening libel lawyers only too well known to journalists, being unable to gag the offshore operations of Yahoo and Google. The Minton exposé, which Trafigura dreaded seeing the light of day, then did exactly that. In the process, what was largely an anonymous, clandestine organisation has acquired an unenviable new brand identity as a tyrannical abuser of press freedom, parliamentary privilege and the 1688 Bill of Rights. Pretty good going for a week’s work.

Pepsi’s offence was less in scale, but greater in culpability. As a global packaged goods corporation it will pride itself on its digital nous. The Amp Up Before You Score Apple iPhone app promised to be cutting-edge stuff, but in the event only seemed to prove that the right arm doesn’t know what the left is doing in the cola giant’s marketing department. The app has caused such a torrent of abuse on the internet, on account of its crass, “neanderthal” attitude to women, that Pepsi has had to issue a grovelling apology on behalf of its previously little-known soft drink brand, Amp Energy. It’s well known now, but for all the wrong reasons. More on what went wrong in my column this week.