Shane Warne, Cheryl Cole, Gordon Brown and a spate of bad-hair advertising

It must be national bad hair week and I hadn’t noticed. Nothing else would seem to explain the sudden profusion of hair-related controversies in the media.

Most recent is the shocking case of Australian cricket legend Shane Warne’s hair loss. He and his follicularly-challenged partner in crime Graham Gooch have just been banned. But not, you’ll be glad to hear, from playing cricket. No, it’s much more trivial than that. The Advertising Standards Authority has cracked down on an ad created for trichologist Advanced Hair Studio – promoting its laser therapy and “strand by strand” technology – in whose service our two sporting heroes have been offering their names, and balding heads.

I’m a little at sea over why the ASA has taken two years to reach such a Draconian verdict. After all, the ad doesn’t actually say that AHS cures hair loss.

Which moves me neatly on to hair crisis number two: the case of Cheryl Cole’s false locks. How come that Elvive can get away with plying a palpably false impression of bountiful, bouncing, natural hair, while AHS isn’t even given the benefit of a few reimplanted strands? The answer, as so often, lies in the small print. The ASA found in favour of Elvive because it provided subliminally small disclaimers about Cheryl’s hair not being entirely her own (quite a lot is nylon, I gather). This is not, I’m afraid, a finding which sits happily within the ASA remit of  upholding “legal, decent, honest and truthful” advertising. Though I suspect that such dishonesty is more widespread in cosmetics advertising than we would like to believe.

The third bad hair advertising controversy is not so much a case of fairness as silliness. I refer to the opening rounds of our forthcoming general election campaign and the two stunningly original poster ads it has so far produced: one for the Conservative Party (Euro RSCG) and one for Labour (Saatchi & Saatchi), both pillorying each other as the Jedwards, whose twin misfortunes are to have been evicted from the X-Factor, and to be burdened with a hairstyle that must make Shane Warne think twice about the wisdom of hair implants. The ASA won’t be allowed to touch these ads, more’s the pity.

A&E comes off the critical list

With just days to go before a High Court hearing they seemed doomed to lose, the founding partners of agency hotshop Adam & Eve have settled out of court with WPP.

The predicted grovelling apology was forthcoming and has been prominently displayed on WPP’s website, like some traitor’s head spiked at the Tower of London. In it, partners James Murphy, David Golding and Ben Priest fulsomely acknowledge that they broke the terms of their gardening leave when they quit WPP-owned Young & Rubicam to set up A&E. Further, if “unintentionally”, that they absconded with WPP-owned data.

There was also a price to pay, said to be somewhat under £1m, plus considerable legal expenses: perhaps £1m in all. That is cheap compared with the $10m (before costs) WPP recently extracted from two former George Patterson executives and the agency’s ex-owner, PEP, in Australia. But it is no small change for the embattled A&E partners, who are under personal guarantee. Their only consolation is that A&E has escaped to fight another day.

Cheil’s $10m bid to buy the Barbarians

Word reaches me that Korea’s leading agency Cheil Worldwide is acquiring US interactive network Barbarian Group – which has outlets in New York, Boston and San Francisco – for a mere $10m. That’s a lot less than the $44m it appears to have paid for a 49% stake in UK agency Beattie McGuinness Bungay late last year and some are speculating that Barbarian, a whizzy maverick born in the meltdown of the dotcom boom, has finally run out of money. But I couldn’t possibly comment on that.

What I will say is this acquisition has the finger-prints of Bruce Haines, Cheil’s global chief operating officer, on it.

Bear with me. Haines, who has been prized throughout his career for his managerial skill, quit as group ceo of Leo Burnett London in acrimonious circumstances two years ago. The bust-up was over a restructure he profoundly disagreed with. Burnett is Samsung’s lead global agency, so no great surprise to find Haines being snapped up by Cheil, Samsung’s in-house agency (it owns 18%). It was perhaps more surprising to find Haines, who spoke not a word of Korean, decamping with his family to Seoul.

We’re now beginning to get the fuller picture. Haines has been given a war-chest to help transform Cheil from an introverted Korean giant dominated by one really big client into a global micro-network. Not by accident the deal with BMB – one of London’s hottest creative properties – mirrors the BBH relationship with Haines’ former alma mater, Publicis Groupe, owner of Burnett: the aim is arm’s length creative freedom. It has certainly given BMB the financial freedom to set up shop in the USA.

The Barbarian deal looks like a second leg to Haines’ strategy: the strengthening of Cheil USA. So far, the US end of the network has confined itself to poaching key staff (for example, three senior executives from Draftfcb). Now it seems to be swallowing whole agencies. Might we speculate that part of Haines’ end game is to wean Samsung entirely away from Burnett, by providing a convincing alternative resource? BMB has already picked up a handsome Samsung dividend by taking the Cheil Won.

As for Barbarian Group, strictly speaking it is a digital production company which is as likely to hire out its talents to agencies (including Crispin Porter + Bogusky and BBH) as to clients direct. There are certainly signs that it has, like the rest of the agency world, had to make heavy cuts. Last July, it shed about 15% of its staff. The question now is: will its promiscuous, project-led culture be compromised by being a part of Cheil? It’s a strange one, no doubt about it.

UPDATE: I see Rick Webb, Barbarian COO, has been doing his best to deny the story (not very convincingly). My understanding is that Barbarian has signed a memorandum of understanding with Cheil, which will last a month. The owners of Barbarian will pick up $10m if the deal goes through.

Would you Adam & Eve it?

Where does he find the time? Besides dealing with “fundamental strategic issues” every day of his working life (ie, every day), WPP chief Sir Martin Sorrell has developed a formidable talent for litigation.

The latest scalps are a group of executives who conspired to swindle WPP over the purchase of one of Australia’s most venerable agencies, George Patterson. Briefly, two Patts execs (as they say Down Under), md Anthony Heraghty and ecd James McGrath, were secretly channelled $1.5m by the former owner, Pacific Equity Partners, to stay on for a year, as an inducement for WPP to pay a higher price. They duly did, then quit: which obviously left Hamish McLennan, the group ceo of acquiring WPP agency Y&R, looking extremely vulnerable; if not quite so vulnerable as certain strategic Patts accounts.

That was three years ago. Dogged legal pursuit has resulted in an unreserved apology from Heraghty and McGrath, and well over $10m damages extracted from all the defendants, including PEP. PEP, while admitting it knew about the agreements, has blamed lawyers Clayton Utz for poor advice. Sorrell is now, separately, pursuing Clayton Utz.

And the message is? Watch out for the High Court in London on Monday, November 23rd, when Sorrell attempts to extract a similar package from Adam & Eve, the agency that had the temerity to break away from WPP without asking. I am assured that nothing less than a grovelling apology and a great deal of money will suffice.

Maclaren takes a financial bath, but will it lose the baby as well?

Maclaren, the British baby pushchair brand, has just landed itself in the biggest crisis of its 44-year history after mishandling a recall of its products.

I do not know how much of Maclaren’s sales the umbrella-style stroller models in question account for, but it must be a lot. One million of them are being withdrawn from the US market, after 12 children suffered amputations after getting their fingers caught in the retracting hinges. Given that the pushchairs retail at an average of over $400 each, that the US is MacLaren’s largest market, and that it will have to fit plastic protective coverings to the hinges of each and every one of the recalled strollers, we can easily grasp the financial scale of the crisis.

But money is not the really important issue here. Maclaren markets itself as “the world’s most safe, durable, innovative and stylish baby buggies and strollers”, so the recall is a huge slap in the face. The strollers are an iconic representation of the company, on which its reputation stands or falls. And the way things are looking at the moment, it’s likely to plummet.

Why? After all, taken step by step, Maclaren has done some of the right things. It has clearly assessed the risk issue over a number of years, and found it to be infinitesimally small from a statistical point of view. Once adverse publicity began to affect its sales, it readily co-operated with the US Consumer Product Safety Commission and organised a voluntary recall.

What it has not done is reassure customers in its other markets, particularly its home one, that it will treat them on the same level. It has also failed to communicate its point of view, let alone a comforting message. Instead, we have virtual radio silence. In short, Maclaren has given the impression that it is at once arrogant and timid: not a winning combination for the future.

It’s arrogant, because it seems to be saying that the rest of the world doesn’t matter as much as its US customers. All right, we know the extenuating circumstances. There aren’t nearly as many mangled fingers over here; and trading standards officers have not put the same pressure on Maclaren for a recall. Lastly, and most cynically, we may guess that Maclaren has more to fear from ambulance-chasing shysters in the US than anywhere else in the world.

Even so, the lame suggestion that UK and European customers can make do by contacting the company and acquiring a safety kit free of charge simply won’t do. We should be so lucky. The company website was inaccessible when I tried it and the phone lines are most likely permanently engaged.

In a major brand crisis, a bunker mentality is the last thing you need. Anticipation, not calculated reaction, is the name of the game. Put out a message of reassurance. Let it come directly from the chief executive. Don’t hide behind PR flunkies. Engage with the media personally. Apologise (even if no apology is strictly warranted); and do it in print, with newspaper advertisements (they’ll get picked up on Google soon enough).

That’s exactly what Mars (not a company you naturally associate with humble pie) did a few years ago when it took a wrong turn on one of its key confectionery ingredients. Mars made an careless mistake when it decided, without consultation, to start using animal rennet, so alienating a vocal minority of its customers – vegetarians. After 6,000 people complained, Mars UK md Fiona Dawson personally took charge of a remedial campaign that involved asserting unequivocally “The consumer is boss” and spending millions of pounds on broadcasting an apology. She even gave out her personal email address.

What Mars seems to understand, but Maclaren so far doesn’t, is that small things are everything in marketing. Small things like the minute amount of benzene that destroyed Perrier’s primacy as a mineral water brand; the minor changes to a syrup formula that nearly did for Coke; the minute amounts of salmonella found in Cadbury’s plant; or – even – 12 little fingers. When commercial success relies on something as emotionally charged as a child’s safety, the importance of a caring attitude towards your customers cannot be overemphasised.

Age may wither them and custom stale their finite 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 account for McCain to Beattie McGuinness Bungay. He was lucky to survive the subsequent – abortive – attempt to buy BMB. Nissan had also begun to look shaky. 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.