The end of a riveting tale – BBH resigns Levi’s account

July 15, 2010

It’s probably entirely coincidental that BBH’s resignation of the Levi’s account, which the agency serviced with distinction for 28 years, surfaced about the same time as the jeans manufacturer’s second quarter financial results. A constructive coincidence, all the same. If not exactly dire, the results graphically illustrate how far down in the world the Levi’s brand has come: the company compounded a multi-million dollar loss.

In its day – 15 to 20 years ago – Levi’s was a sobriquet for jeans, at a time when everyone of consequence thought it cool to wear jeans. Now they don’t. Or if they do, it’s 7 For All Mankind for upmarket, Gap for downmarket and Diesel for youff – with Levi’s perched somewhere uncomfortably in between. The market for nostalgic Americana has vanished, probably for ever.

Levi’s iconic status arose, in business terms, out of a structural imbalance. The company’s own retail presence was extremely weak outside the USA – even today it does not own all its outlets, leading to an impression of inconsistency. Advertising supplied the deficit, literally driving people into the shops to buy the stuff. That’s a relatively unusual situation in the rag trade; even more unusual is the idea of trusting the agency’s judgement in these matters. But Levi’s did, with astonishingly productive consequences.

You can view BBH’s contribution as a number of discrete, highly visual campaigns – from Launderette, Swimmer through to the Flat Eric vehicle and beyond. Everyone has their favourite. The magical insight, however, was not so much what they looked like, but what they sounded like. The estates of, among others, Marvyn Gaye, Eddie Cochrane, Sam Cooke and Dinah Washington (Mad About the Boy) have every reason to be grateful to BBH. A few years later, in the mid-nineties, the agency moved on from resurrecting the fortunes of dead artists to making the fortunes of new ones, such as Babylon Zoo in “Spaceman”  and Mr Oizo in “Flat Beat”.

Latterly, however, Levi’s seems to have lost faith in advertising and BBH in Levi’s. It’s not just that the jeans brand is becoming more penny-pinching as it tries to cope with commoditisation; BBH has, these past two years, found it a great deal more difficult (I understand) to get its creative proposals accepted. Even so, it must have been with a heavy heart that Nigel Bogle, BBH group chief executive, composed the letter firing one of his original, and signature, clients.

Marketing ITV – it’s all about content, stupid!

July 15, 2010

Does marketing really belong in the commercial department? Not according to ITV’s new bosses, who have just made it a subset of content creation.

How serious they are about the proposition is, of course, a matter of debate. At one level – the level of employment lawyers – what’s going on looks suspiciously like constructive dismissal. Change the senior reporting structure in a company and you potentially diminish the authority and budgetary power of those who are “reorganised”.

That’s certainly one interpretation of the imminent departure of group marketing director David Pemsel and head of research Chad Wollen, announced yesterday afternoon. Only a week ago, it emerged that marketing and research, hitherto separate and under the control of the commercial department, were to be integrated and rerouted to content czar Peter Fincham (aka director of television, the chief commissioning role).

The conspiracy theory gains traction when we consider what else has been happening at ITV recently: chiefly the sacking of most of the old guard. After commercial director Rupert Howell fell on his sword and was replaced by Fru Hazlitt, we have had a very crowded departure lounge. Studio bosses Lee Bartlett and Remy Blumenfield are queueing at the exit, as is online director Ben McOwen Wilson.

And that’s just scratching the surface. Underneath, a full-scale cleansing of the Augean Stables is underway, as chairman Archie Norman and chief executive Adam Crozier take a pitchfork to the “shambles” (their word) of the Michael Grade regime. Humiliating psychometric tests applied to the 120 senior managers who remain add a defining touch to this melancholy picture. (I bet Crozier wishes he could have applied those self-same tests to the board of the Football Association during his tenure as chief executive – now there’s an organisation that really isn’t fit for purpose.)

Yet none of the above is inconsistent with implementing a strong, alternative, strategic vision; some of it already apparent in the quality of new senior hirings. Hazlitt is widely viewed as an inspired choice to succeed Howell. Her natural enthusiasm and client-servicing skills should help to repair damaged relationships with media agencies. She also “gets” digital (just as well really). Mind you, how she will co-exist with Gary Digby, master of the dark art of  TV trading, is a moot point.

Moreover, vesting more power with strong programme-led talents such as Fincham and Kevin Lygo – poached from C4 and now head of production (or ITVS, as it is called) – surely makes a lot of sense. The Grade regime talked a good game about improving the quality of content, but in reality it was fixated on refurbishing a brand built around yesterday’s trading system.

Witness the amount of corporate energy spent in repealing (fairly unsuccessfully, as it turned out) the Contract Rights Renewal (CRR) regulatory straitjacket encasing its main, analogue, channel – ITV1. Just to put things in perspective, here are a few statistics. When in 2003 Carlton and Granada merged to form ITV, the flagship channel’s share of the commercial television audience was 43%. By the end of 2008, it was 28.5%. Add in ITV’s (relatively neglected) digital channels and the figure rises to over 40% again. And yet, ITV has singularly failed to monetise that digital presence. Last year, online revenues were only £35m, up from £23m in 2006.

I’m not necessarily saying the Crozier/Norman 5-year plan will work– maybe nothing can at this late stage. But at least it represents a reality check firmly breaking with the nostalgia of the past. Superior programmes, especially hit shows that travel effortlessly across the multimedia and geographical landscape, are the only way ahead. In that sense, putting marketing at the service of the creative department is a no-brainer.

Abolition of FSA will give food industry more shout

July 12, 2010

Come on, we all knew a Tory government was going to abolish the FSA. It’s just we got the wrong one in our sights. How devious of them to lead us up the garden path like that!

While the incompetent Financial Services Authority (a watchdog steeped up to its dewlaps in responsibility for the banking crisis) has got off lightly with a root-and-branch reform instead of threatened abolition, the other FSA, the Food Standards Agency, which was threatened with root-and-branch reform but not abolition, is the one that is actually going to get the chop. Health secretary Andrew Lansley, we are told, will shortly announce that the organisation set up in 2000 in the wake of the BSE crisis will have its regulatory remit (safety and hygiene in the food chain) devolved to the Department for Environment, Food and Rural Affairs (Defra), and its responsibilities for advising on public health and diet (primarily the obesity debate) given to the Department of Health (DoH).

The immediate aim is to save about £1bn by breaking up a department with 2,000 people and a budget of £135m. However, commentators on both sides of the food divide have been quick to discern a not-very-hidden ideological agenda.

Nannyism: Out of fashion

With one stroke, Lansley has struck a lethal blow at the heart of nannyism. Even the food industry seems a little taken aback by the suddenness of the blow. And yet it is entirely consistent with Lansley’s promise – implicit in his decision last week to give industry a bigger role in Change4Life – to substitute “nudge” (persuasive technique) for cumbersome and expensive legislative coercion.

A happy by-product of this policy, so far as the food, soft drinks and alcohol companies are concerned, is that it puts them more firmly in the driving seat. We will hear no more of “traffic lights”, the simplistic but consumer-friendly food labelling system which the FSA has espoused with such zeal, much to the annoyance of Big Food. Similarly, I imagine the threat of a TV advertising watershed imposed on certain food and alcohol categories is definitively a thing of the past; and the medical caucus will – for now – be more hesitant about calling for an outright ban on the consumption of alcohol.

Critics of Lansley’s plan will no doubt point to the conflict of interest inherent in placing regulatory control within a department, Defra, which is also responsible for the supply side. One of the reasons for the FSA’s foundation as an independent body was the perceived inadequacy of MAFF (Ministry of Agriculture, Fisheries and Food) – Defra’s predecessor – in dealing with the BSE crisis, thanks to its cosiness with farmers. But that’s one for the critics. For the food and alcohol sectors, the FSA’s abolition marks a famous victory, not least in the communications war.

UPDATE: Some furious back-pedalling by Andrew Lansley’s special adviser has led to the following terse statement being issued on the DoH website this afternoon: “No decision has been taken over the Food Standards Agency (FSA). All Arms Length Bodies will be subject to a review.” Meaning? The electric chair will have to wait, but it’s definitely (or should that be indefinitely?) Death Row for the FSA. Emasculation by innuendo. NICE next?

Cookeing the media-buying goose

July 9, 2010

Outrageous indeed. I couldn’t agree more with IPA director-general Hamish Pringle’s take on Thomas Cooke’s contribution to an increasingly acrimonious global media-buying debate.

The travel operator is reported to be demanding a £1m signing-on fee at the conclusion of its £30m media review – in addition to “a reduction in agency fees currently paid” and “a minimum 10% saving through consolidated media buying” stipulated in the original brief for the 3-year contract.

And yet, the Thomas Cooke affair is only the most egregious example (to date) of a ripple of client practices which are causing stupefaction in media agency circles. It’s the way the world is going.

The principal bugbears in the debate are Unilever and Reckitt Benckiser. It is no coincidence that they are, respectively, India’s number one and number two advertisers. India, land of the cut-price call centre and the $2,500 Tata car, is after all where most of the low-cost action is to be found these days.

By way of background, read (if you haven’t read it already) a column by Les Margulis, an American media veteran – 22 years at BBDO. Promisingly entitled ‘When to walk away from an energy-sucking client’, the content below the headline does not disappoint. It’s a withering diatribe aimed at Rahul Welde – VP of media at Unilever for Asia, Africa, Middle East and Turkey – in particular, and cheapskate clients in general.

What (apart from an arrogant manner) had Welde done to deserve this opprobrium? About a month previously in a keynote speech encompassing the future of advertising, he had had the temerity to suggest that “marketing is all about brilliant ideas”. And one of them, apparently, is screwing down agencies, creative as well as media, to zero costs – if necessary by posting the brief on the internet and doing a bit of on-the-cheap crowdsourcing. See also George Parker on “Vindaloo Rat” and Jim Edwards at bNet.

Reckitt has stoked this controversy to fever-pitch by going one step further. Allegedly, it plans to charge each of the participants in a pitch for its Indian media-buying business up to $10,000. The suggestion has so upset the Advertising Agencies Association of India that it is advising member agencies not to pitch.

This bit may be a storm in a tea-cup, as I am assured by those in a position to know that RB has not actually asked for money (or is that just wiser-after-the-event back-pedalling?). Even so, the proven terms could scarcely be considered lenient: the “winner” will have to rebate volume discounts paid by media owners as well as offer compensation for any drops in TV ratings.

Which brings me back to Thomas Cooke’s modest contribution to the “media, it’s just a commodity” debate. What puzzles me, given that media agencies are being awarded virtually zero compensation these days, and are expected to indemnify the client against loss, is this: how does anyone make any money? It’s certainly not on the overnight interest rate. And yet media agencies continue to queue up and be plucked.

As for Thomas Cooke’s proposal, my only surprise is that it didn’t come from Ryanair first. Now that really would be “rapacious”, to use one of Michael O’Leary’s favourite words.

Changed4Life – policy U-turn puts advertisers in the driving seat

July 8, 2010

For the health lobbyists, it was a rout; for advertisers – and especially those in the food, soft drinks and alcohol sectors – a triumph and an indisputable turning point.

Lansley: A Mars a day may help you work, rest and play

Yesterday’s landmark speech by health secretary Andrew Lansley left not a shadow of a doubt about the government’s future stance on the obesity debate. Nannying – in the sense of strict legislative curbs – is out and “nudge” – the employment of persuasion techniques to mould consumer behaviour – is definitively in.

In practice it means that a fiscally-challenged Government intends to withdraw some public funding from the 3-year Change4Life programme, leaving business to take up the financial slack. Almost without saying, this puts the members of the Business4Life initiative in an unprecedentedly powerful position.

As if to underline the point more graphically, Lansley made specific reference to some of the main consortium members in his redefinition of government policy:

“It is perfectly possible to eat a Mars bar, or a bag of crisps or have a carbonated drink if you do it in moderation, understanding your overall diet and lifestyle. Then you can begin to take responsibility for it and the companies who are selling you those things can be part of that responsibility too.” Companies which include Mars, Coca-Cola and Pepsi Cola (owner of Walkers Crisps).

What this means for the health lobby was bleakly summed up by Tam Fry, the feisty leading-edge of the National Obesity Forum. “NOF is horror-struck at Mr Lansley’s remarks. It sees them as nothing other than a bare-faced request for cash from a rich food and drink industry to bail out a cash-starved Department of Health campaign, ” he says. I might scruple at the “nothing other” bit, but find it hard to disagree with his argument, as far as it goes.

Lansley’s new concordat is at once an opportunity and a trap for the food and drink industry. It’s an opportunity to exercise more responsibility in what it sells, and how it sells it, to an increasingly wary consumer. As Fry points out, many food manufacturers continue to sell products whose salt, sugar, and fat content is well in excess of Food Standards Agency guidelines. There are signs of greater self-restaint, particularly in the area of trans fats, but it is slow and grudging. The science surrounding obesity meanwhile moves on, and with it – if diffusely and haphazardly – the consumer perception of what is acceptably healthy and what is not. Only this week, for example, a study found that children who are obese tend to exercise less, because they are already overweight; rather than because their lack of exercise causes them to put on weight. In other words, from the complex miasma of obesity’s causes – among them poor education, lack of exercise and poverty  – junk food has once more emerged as an all-too-visible spectre.

So, when Lansley advises Business4Life to reach for the till, it should reach for the till. But its members must also remember that what they are doing will lack all public credibility if it is unaccompanied by measurable changes in the behaviour of the food and drink companies themselves. This is not an opportunity for coasting.

Unison lets off steam over sexy nurses, but what about flighty attendants?

July 6, 2010

Our favourite union Unison has been getting into a terrible lather about a Head & Shoulders commercial that supposedly demeans nurses.

The offensive ad features numerous nymphettes, clad in clinging white uniforms and red high-heeled shoes, serenading the bemused male occupant of a steamy shower.

Actually, says Saatchi & Saatchi – the agency responsible for the ad – they’re not nurses at all; they’re “a cross between beauticians and dermatologists”. Mmm, since when have beauticians worn those medal watches? But I’ll let you be best judge of that.

Moving on, I’m not surprised the Advertising Standards Authority has found no grounds for a formal investigation into Unison’s complaints. As far as I know silliness is not a CAP offence.

Besides, where would it all end? Nymphettes, red high-heeled shoes and sexually suggestive behaviour readily recall another, more famous, campaign: last year’s Virgin Atlantic retro ad. Given that flight attendants are a core trade union constituency, should that be blacklisted too?

Mind you flight attendants (or “air hostesses” as we used to insensitively call them) have every right to apoplexy over this raunchy little number from Russian budget airline Avianova:

Cannes you believe it? Those winners in full

July 6, 2010

Now we’ve got the Cannes advertising winners out of the way, let’s move on to the competition that really counts: Who Came Second?

Let me explain. This is an annual grudge match between two players – WPP and Publicis Groupe  – and involves creative arithmetic skills of the highest order. Omnicom is excluded on the grounds that it enjoys an unfair advantage (ie, it is the overall winner every year, usually by a country mile).

So, what’s the form? Well, last year both WPP and Publicis proclaimed they were the winner, which led to some acrimonious email correspondence between their two chiefs, Sir Martin Sorrell and Maurice Lévy.

This year, WPP is trumpeting outright victory. Posted on its website is an exhaustive analysis of the results, which triumphantly underpin its claim. Using the Cannes judging system (10 for Grand Prix, 7 for Gold, 5 for Silver, 3 for Bronze and 1 for all shortlists), those results pan out as follows:
1. Omnicom – 1452 points (187 statues)
2. WPP – 1317 points (177 statues)
3. Publicis – 883 points (118 statues)

Surely Lévy can’t be happy with this tally? Yet, so far, I have searched in vain for enlightenment on the Publicis Groupe site…

Come to think of it, John Wren won’t be very happy either, at the prospect of WPP closing the yawning gap with Omnicom. Must be that John O’Keeffe weaving miracles as WPP global creative director.

ASA rebukes Asda over phony 100-day George clothing range guarantee

July 5, 2010

The Advertising Standards Authority will next week officially reprimand Asda for broadcasting exaggerated and misleading advertising – an ironic counterpoint to the supermarket’s successful challenge to Tesco advertising on one of the self-same grounds last week.

The complaint was about a TV ad – agency Fallon – featuring a 100-day guarantee being offered by the clothing range George at Asda. In the ad, the voiceover states: “At George, we know what makes a difference; the quality and feel of the fabric, the stylish cut, the stitching, colours that stay colourful, extensive testing and the finer details. And that’s why at George, we now offer a one hundred day quality guarantee on all our clothes, so you can enjoy quality that lasts. Yes, that’s George, exclusively at Asda.”

The complainant suggested the ad was misleading because the guarantee was a superfluous gimmick; consumers are already offered a longer period to return faulty items under the Sale of Goods Act.

Asda responded by claiming that the 100-day guarantee enhanced the rights of the consumer beyond the Sale of Goods Act, by covering not only faults but issues with quality. It also argued the guarantee encompassed a 100-day “cooling off” period during which consumers could return any item of clothing if for any reason they did not like what they had bought.

The advertising watchdog found fault with Asda on several grounds. It said the Sale of Goods Act required sold goods to be of satisfactory quality as well as fault-free and, under that legislation, a consumer had 6 years to bring an action for breach of contract; in addition, for the first six months the onus was on the seller if a consumer found fault with quality.

It said the ad failed to make mention of any 100-day “cooling off” period. Asda has been ordered not to show the ad in its present form.

Why Unilever’s Chrysalis was no butterfly

July 5, 2010

“Odd” was how one highly placed Unilever source described the food, toiletries and detergent giant’s decision to scrap its innovative Chrysalis unit after only two years. Odd indeed: its disappearance is as enigmatic as its existence in the first place.

Chrysalis was a kind of wholly-owned incubator, in which Unilever stored some of its most treasured “local jewels”, such as Marmite, Pot Noodles, Peperami, Slim-Fast and Bovril. Altogether, there were 14 of them, stretching across 3 markets: Germany, France and Britain. These brands had one thing in common. Their quirky, national character possessed almost no transborder appeal. On the other hand, put together, they added up to a £500m business – no small change.

Unilever never made the rationale of Chrysalis entirely clear, leaving journalists and City analysts to fill the vacuum with speculation. Unilever’s one categorical utterance on the subject was that the brands were not for sale. Which the City boys (such as Citigroup) took to mean the exact opposite.

Look at the company’s strategy, One Unilever, they said. It’s all about multinational power brands such as Axe/Lynx, Persil, Dove and Wall’s. What possible role could tiddly, if charismatic, brands like Marmite have in this? By way of justification, they pointed to various strategic disposals the company had been making around the world: Boursin in France, a Brazilian margarine company here and an American detergent company there. Second, they pointed to an inherent contradiction in running these highly localised brands out of a central organisation based in Rotterdam; meaning Chrysalis must be a short-term expedient. And third – the clincher – Unilever had deliberately segregated its minor brands into two categories. There were those – like Colman’s mustard and PG Tips – that remained in the main Unilever fold and then the rest – the black sheep so to speak – which had been hived off into Chrysalis.

So much for that theory: all the black sheep have now been herded back into the main fold  – under the name of Incs (Incorporated Businesses) – leading Investec analyst Martin Deboo (for one) to conclude ruefully that rumours of a sell-off were overcooked.

I’m not so sure. The obsession with a brands sale seems to have arisen from a partial misunderstanding of Chrysalis’ purpose in the first place. By the same token, its dissolution cannot be regarded as a guarantee the brands will remain in the long-term ownership of Unilever.

First, the creation and purpose of Chrysalis. Admittedly, in the past, these brands might have ended up in the hands of private equity companies. But by 2008, the date of Chrysalis’ origin, such funding was already becoming very tight. At one level, the unit was clearly intended to keep them financially afloat. It was equally apparent, however, that – put in the hands of semi-detached entrepreneurial managers – Chrysalis would serve as a nifty brand laboratory whose lessons could be imported into mainstream Unilever culture.

The man chosen to lead this alternative operating model was James Hill, who had a considerable track record behind him as first chairman and md of Lever UK, the Unilever detergent arm, and subsequently senior vice-president marketing operations Unilever Europe.

Whether under Hill’s leadership these 14 brands actually made significantly more money for Unilever I have no idea (but some doubts). More evidently, his brands did succeed in making a lot of positive media noise for big, boring Unilever and embarked on some interesting experiments.

Marmite is a good case in point. During Hill’s stewardship, the brand name has finally passed into the English language as a metaphor of sharply contrasted appeal. Marmite led the way (well, co-led it with HMV) in pioneering temporary “pop-shops”. These exploited high-profile retail premises left fallow by the recession to merchandise 100 Marmite-branded products, including food, clothes, art and even Christmas boxes.

I seem to remember Marmite also made skilful use of its brand personality to keep itself front of mind during the late, long-drawn-out, election with a “Love Party versus “Hate Party” campaign featured on a specially devised website,

The Marmite campaign soon amassed some valuable political capital when Nick Griffin, leader of the BNP, decided to do some passing off of the “Hate Party” – complete with hijacked Marmite logo – in his own political broadcast. Threat of legal action by Unilever not only forced a humiliating climbdown by Griffin, but caused him to lose his irreplaceable webmeister in the media furore that followed.

Enough of Marmite. Let’s also consider Peperami. The sado-masochistic salami brand created a bit of a sensation last year when its group marketing manager, Noam Buchalter, fired Lowe – its agency of 16 years – and solicited members of the public to come up with ideas for the next ad campaign. Crowdsourcing, as it is called, is increasingly trendy these days – a kind of marketing analogue of social media. Walkers used it to some effect recently when coming up with a new crisp flavour. What’s far less usual is to fire one’s ad agency in the process. This heinous act sparked an explosive debate in creative agency circles, the gist of it being that Unilever is a cheapskate, seeking to circumvent agency fees with inexpensive ideas sourced through the internet which achieve, at best, tepid success. We have yet to judge, in Peperami’s case. More importantly, however, the Peperami crowdsourcing episode was a first for Unilever which succeeded in capturing the attention of new chief marketing officer Keith Weed. One of Weed’s first initiatives on taking over from Simon Clift earlier this year was to approve a crowdsourcing drive for 13 of Unilever’s biggest brands, including Wall’s, Lynx and Dove involving the same $10,000 “bounty” for the lucky winner.

Weed has subsequently felt the need to back-pedal, and reassure agencies, on the issue of crowdsourcing. In an interesting and wide-ranging debate with WPP ceo Sir Martin Sorrell at Cannes (where Unilever was declared Advertiser of the Year) he had this to say:

“In general, I’m not going to use crowdsourcing as a substitute, with the exception of Peperami.” Consumer-generated ideas, he added, are merely a way of allowing Unilever to “pilot and test things”.

Which brings me to why Chrysalis was eventually ditched. At the beginning of this year, James Hill moved to another Unilever job, that of chairman of Italy. Buchalter has also quit, to become a consultant. It would be easy to surmise ‘writing on the wall’ here. I doubt that is the case, however. There is an exactness about Hill’s two-year term that suggests this was a valued Unilever “lifer” taking up a new turn of duty. More likely the closure has come about because the new top management team, led by ex-Procter & Gamble executive Paul Polman, couldn’t see Chrysalis’ long-term relevance. Indeed, Weed specifically referred during the Cannes debate to Polman’s decisive influence in making lines of communication with the consumer simpler and more direct. A complex hybrid operating system, and a business culture licensed to be irreverent, may have had no place in his thinking.

Does the dissolution of Chrysalis matter? In the short term, no. Matt Burgess, formerly managing director of Chrysalis UK, remains in charge of the Marmite, Bovril, Pot Noodle and Slim Fast brands as md of the new “integrated” unit Incs. I suspect, however, that some of the fizz has come out of the laboratory idea, that the future of the brands will be more pedestrian, and their value more meticulously cost-accounted.

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