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Why Aberdeen Asset Management wants to be the Intel of financial services

May 7, 2013

Piers Currie - Aberdeen Asset ManagementWhat’s the biggest, most successful, company you’ve never heard of? Impossible to say, of course. But a good candidate would be Aberdeen Asset Management.

It’s in the FTSE-100; it’s genuinely global. And it’s very profitable indeed, judging from its latest interim figures. Just to make the point: profit before tax increased 37% to £223m; earnings were up 43%, while the dividend increased 36%. And it manages financial assets of £212bn.

Yes Siree, the people at the top of this company are heading for deferred bonus payments that will make Sir Martin Sorrell’s look like a storm in a teacup. And, do you know what? There won’t be a squeak of dissent from shareholders.

Anonymity – outside the global capital markets – has served Aberdeen well these past 30 years. It has had little need to trumpet its wares through the megaphone of mass-media publicity, since what it does – trade in equities, fixed income instruments, properties and multi-asset portfolios – is mainly aimed at the wholesale financial market (other people sell the product on), and has little resonance with the punter on the street – unless that punter happens to be reasonably wealthy in the first place. True, Aberdeen has spent some trifling amount on a corporate ID (it looks a bit like a mountainous ‘A’) and does dispose of a £20m annual global marketing budget (peanuts for any equivalently-ranged consumer products company). But most of that money goes on getting a word in the right, expert, ear – via the rapier of PR and that trusty old ambush-marketing technique, the roadshow, rather than the blunderbuss of advertising.

Not any longer, however. This week Aberdeen is launching a global corporate branding campaign – its first since 1983. “Simply asset management”, the strap line, may not sound like rocket-science but, in fact, it is shrewdly timed. And for that, presumably, we must thank Aberdeen’s long-serving head of marketing (now group head of brand), Piers Currie (pictured above).

At a time when interest rates on deposit accounts are near zero (after inflation is factored in, you effectively pay the bank, not the other way round), investors are finding it increasingly difficult to gain a reasonably safe return on their financial investment. They must therefore turn to more risky asset classes – fixed income instruments and, more fashionably, shares. Who to trust in this treacherous financial world, however? Certainly not the universal banks – discredited bancassurance conglomerates that were yesteryear’s financial toast – who have comprehensively fleeced us of our savings, through rank incompetence, downright fraud or a combination of both.

Aberdeen’s modest proposition is that it is a narrow specialist; but within a field where it has gained great expertise and evidence-based returns. Stuff that isn’t going to be lost in the miasma of a bank’s balance sheet, and is there for all to see – should you wish to. There’s been an element of luck here, but also a good deal of judgement. When chief executive Martin Gilbert set up Aberdeen (it was a management buyout from an investment trust, which owed its name to its physical location in Aberdeen), he deliberately targeted emerging markets, and in particular the Far East, as the company’s area of fund management expertise. At the time, ’emerging markets’ were the financial equivalent of  the Wild West. Today, they’re mainstream. Anyone without a decent chunk of his or her portfolio in China, Brazil, India, Hong Kong or Singapore is probably suffering from asset imbalance.

Aberdeen’s sweet-spot won’t, of course, last forever. But while it does, it has – on the evidence so far – a reasonable claim to being regarded as the Intel of financial services.

Which is what this corporate makeover seems to be about.

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It’s the Age of Google and Sorrell has no time – or money – for Twitter

April 29, 2013

Martin SorrellThe most interesting thing about WPP Group’s first quarter financial results were not the numbers, but its chief executive’s obiter dicta.

The numbers themselves were a curate’s egg. They beat the revenue forecast, bizarrely enough they delighted in Britain, but they disappointed in the United States. Which is just about the only part of the world economy currently showing signs of dynamism.

The obiter dicta, on the other hand, were curiously memorable. WPP CEO Sir Martin Sorrell used the occasion (well, near enough: he was actually speaking at the FT Digital Media Conference the previous day) to highlight a singular phenomenon. So far as his company is concerned (and it  is, after all, the number one spender of advertising money in the world), Google will soon become a bigger destination for his clients’ money than the biggest traditional media owner in his stable, News Corporation. Google is currently in receipt of $2bn of WPP’s quarterly spend; while NewsCorp gets about $2.5bn. But, given the Google figure represents a 25% increase year on year, it can only be a short time – Sorrell assures us – before the search giant moves into pole position.

I say “search giant”, but that of course is history. Sorrell’s underlying point is that Google – after some initial fumbling – has made the transition from a techie company, peopled by nerds, into a multi-media corporation with global reach. He calls it  “a five-legged stool”: there’s search (of course); display advertising; social media (google+); mobile (via Android and AdMob); and video through YouTube.

Note well where Sorrell places his chips, however. From an advertising point of view, the Age of Google (as he calls it) is primarily defined by video. YouTube has made big inroads into what traditionally would have been television viewing. He’s bullish about mobile, too: Android is now the most popular smartphone platform and in some developing markets, like China, it accounts for two-thirds of all mobile sales.

But social media: Oh dear, what an advertiser’s no-no! Yahoo, though generally lacklustre these days, garners about $400m of WPP spend. Facebook, infinitely more successful with its audience figures, receives only $270m. And Twitter a lot, lot less. What’s the logic? Well, Yahoo “gets” the commercial need for a five-legged strategy (indeed, TechCrunch speculates it is about to buy Dailymotion, a smaller competitor to YouTube). Whereas Facebook and Twitter do not. Facebook, Sorrell reckons, is important for brands – but in a negative sense – absence of criticism, which has little to do with any advertising content. Twitter, on the other hand, is simply a PR medium with almost no value to advertisers.

“It’s very effective word of mouth,” Sorrell told Harvard Business Review last month. “We did analyses of the Twitter feeds every day, and it’s very, very potent…I think because it’s limited in terms of number of characters, it reduces communication to superficialities and lacks depth.”

Maurice Levy, CEO of Publicis, speaks during the Reuters Global Media Summit in ParisThat last may sound a little harsh. And is certainly not a universally accepted view among admen. Significantly, it is not shared by Sorrell’s deadliest rival, Maurice Lévy – chief executive of Publicis Groupe. Lévy has just announced a four-year pact with Twitter which will involve PG’s media planning and buying arm Starcom MediaVest Group committing up to $600m of client money to monetizing Twitter’s audience. Details, at this point, are sketchy.  It is clear, however, we are not just talking “pop-ups” here. Lévy makes specific reference to video links and “new formats” yet to be developed. He admits to there being “some risk” involved in the project, though whether this relates to his own reputation, clients’ money or both is not apparent.


Can Chris MacDonald hack it at McCann New York?

April 26, 2013

Chris MacdonaldHaving, a while back, complimented Chris Macdonald on the improved quality of his tailoring, it would be churlish not to congratulate London’s sharpest suit on landing the hot seat at McCann New York, where he will soon become president.

Macdonald, who combines the position of McCann London group chairman with agency chief executive, is one of several senior executives to be reshuffled in the first significant management changes to be made by Harris Diamond, Nick Brien’s replacement as Worldgroup chief executive. In effect, Macdonald is to take up a position that has been – inexplicably in a creative agency –  left vacant for over a year. His predecessor, Thom Gruhler, quit for Microsoft after – like many around him – coming to blows with Brien over his shoot-from-the-hip management style. The seat had in the interim been kept warm by Hank Summy – a Brien hiring with no traditional agency experience – who has now been elegantly side-shifted to the bafflingly esoteric role of president, commerce at Worldgroup’s digital and direct arm, MRM.

Diamond is evidently throwing away the fairy-cycle stabiliser wheels and proving his own man earlier than expected (or perhaps, more accurately, than I had expected).  When he was picked as McCann Worldgroup CEO last November, McCann’s parent Interpublic hit upon the curious expedient of appointing two “handlers” – hemispheric presidents, Luca Lindner and Gustavo Martinez – to babysit the new boy while he learned the ropes. That was wholly understandable, given that Diamond was a former PR man with no experience of creative advertising. But might have sent out the wrong signal to clients: does McCann trust this man to do the job properly, or not?

In the event, the gamble involved in appointing him – he is well-regarded for his EQ – appears to be paying off. Six months into Diamond’s tenure, McCann has seen off Goodby Silverstein, recaptured the front-end of the General Motors pantomime pony; and won US domestic business as well. Quite a reversal of the negative business spiral that had dogged his predecessor’s two-and-a half-year reign.

It’s easy to see why Diamond might have called upon the services of Macdonald. Where his predecessor loved technical complexity, Diamond is all for human simplicity. “This is a straightforward business,” he told AdWeek recently. “If you can come up with great ideas and make an impact on your clients’ business you do well.”

The great idea, so far as Macdonald is concerned, is threefold. First, his London group role since 2008 has given him invaluable experience of breaking down silo walls and making the various parts of the marketing services machine interoperable. Second, Macdonald is very good with big clients, who these past few years have been feeling a bit bruised and under-loved. Third, London has had a good new business record under his stewardship, in contrast to certain other parts of the McCann empire.

But will the Macdonald pixie dust be enough to salvage McCann’s battered global reputation? That is the question observers are asking. Twenty-five years ago, or so, it was relatively easy for a smooth-talking, self-possessed Brit to make it “Over There” after making it over here. Britain’s reputation for advertising creativity and big brand marketing was second to none in the world. And, if that were not recommendation enough, we could also play the consumer and strategic planning card.

That was then. Now, our effortless superiority in those disciplines should not be taken for granted. And besides, the world has moved on in other ways. It’s a grimmer, greyer place. Post-crash, clients are challenged and risk-averse. As one source of mine puts it: “The need to meet quarterly numbers is more important than waving a magic wand of creativity. This is a low- to no-growth environment.” Add to that the complications of procurement, the massive disruption of traditional channels caused by social media, and the fiendish complexity of planning and measuring campaigns these days, and it becomes triply more difficult for any individual, however talented, to achieve cut-through.

McCann has many weaknesses as a creative agency brand, but one of its great strengths over the years has been its knowledge-in-depth of client businesses. That reputation took a knock under Brien. We have yet to find out whether Macdonald is the man to restore it.


Age cannot wither them, nor shareholders vote them off the holding company board

April 16, 2013

David-Jones---Havas-007Whoever said advertising was a young person’s business? The conventional wisdom is that at 40, most ad executives would be advised to investigate a second career. And at 50, they’ll be positively clapped out and  have “post-economic” freedom foisted upon them whether they like it or not.

Superficially, membership statistics for the Institute of Practitioners of Advertisers (IPA – the UK adman’s trade body) bear this theory out. When I last looked (which was admittedly a while ago, but I doubt the demographic profile has improved), the number of members surviving their 50th birthday was a vanishingly small 6%.

But these are just the worker bees. Look at the nerve centre of the hive – the main board of the world’s leading advertising holding companies – and you’ll find that gerontocracy has never had it so good.

I was forcibly reminded of this the other day by Marketing Services Financial Intelligence editor Bob Willott.

Willott has done a demographic survey of the Omnicom main board and found the average age to be an astonishing 70. In his own words:

The oldest of the 13 board members is the chairman and former chief executive officer Bruce Crawford.  He is 84 and has been a director for 24 years. His successor as CEO John Wren is a sprightly 60 and has served on the board for 20 years.

I have yet to do the arithmetic upon the board composition of other global holding companies, but the most superficial of surveys suggests a similar age-profile, if their chief executives are anything to go by. At WPP Group, there is an evergreen Sir Martin Sorrell – still incontrovertibly ruling the roost at 68; and likely to do so for a good while yet unless shareholders go nuclear over his annual pay review. Interpublic Group chairman and CEO Michael Roth sails imperturbably on at 67, despite repeated attempts by the media to unseat him or sell his company to a rival. And at Publicis Groupe we have the grand-daddy of them all Maurice Lévy – 71 – with no successor in sight, despite repeated attempts to pretend he has found one.

All this looks terribly good for that comparative whipper-snapper, David Jones (pictured above). At only 46, the global CEO of Havas can anticipate at least another 25 years at the helm.


Richard Pinder launches global network with Maserati as a client

March 26, 2013

Richard PinderAfter years of being a jet-setting senior suit in someone else’s service, Richard Pinder has decided to go global on his own account with the ambitious launch of international network The House Worldwide.

Pinder, it will be recalled, was head of Publicis Worldwide for five years until group succession politics (the imposition of Jean-Yves Naouri as executive chairman) made further tenure of his position unrealistic.

That was two years ago. Since then, Pinder has been pondering how to cash in on his experience with global clients (he’s worked for over 25 years in Asia, Europe and the USA; for Leo Burnett, Ogilvy & Mather and Grey, as well as Publicis) by building a new-model worldwide agency network.

No mean cliché, the cynic will object. We’ve heard the rhetoric before. What’s the reality?

It’s true that the agency world has long been struggling with a “post-analogue” structural solution to the increasingly financially unviable traditional creative agency network, with its army of regional bureaucracies. Some have proffered a solution in the form of the fleeter-footed international micro-network (step forward BBH, Wieden & Kennedy and – in its heyday – StrawberryFrog.

Pinder, however, has gone a step further in presenting a top-down managerial solution – or perhaps that should be management consultancy solution – in place of the piecemeal creative one. His starting point is that the traditional global advertising business – unlike professional counterparts such as lawyers and accountants – loses most of its senior talent to the management of regional geographic fiefdoms, which are there primarily because of historical legacy. What this talent should be doing is servicing the client’s agenda rather than their own corporate one. The exception, where the client really can insist on top-level personal service, is a vanishingly small number of mega-clients, such as Ford and Procter & Gamble, which have specially structured teams to pander to their requirements.

Pinder’s idea is to provide this level of service for global, or at least international, clients further down the budgetary league table. Each client should be serviced by no less than three senior people at any one time. To do this, he has joined forces with a core team of like-minded senior executives: initially, Peter Rawlings, former chief operating officer DDB Asia, Chris Chard, former chief strategy officer of Lowe Worldwide in New York and Ben Stobart, former senior vice-president (chief suit) of Burnett Chicago. These will deal directly with top clients on a day-to-day basis; the specialist skills base, on the other hand, is to be provided by a network of over a dozen associated network companies, of which the best known is Naked Communications (see AdWeek for a full list).

Note the absence of an overall chief creative officer. This is deliberate: Pinder does not believe a single individual can adequately address the creative needs of all client types.

Why is Pinder convinced this model can operate from a single fixed geographical location (well, actually two in THW’s case – London and Singapore)?  Because of consolidation on the brand management side. More and more marketing power is being concentrated into the hands of Chief marketing officers and indeed chief executives; less and less being delegated to regional and country power bases.

But, the acid test is: has Pinder got any clients? Yes he has. He has been collaborating with two over the past year in honing the organisational structure of THW, during what he calls “beta mode” (how digitally au courant).

And they are? Maserati and an upmarket specialist haircare brand, GHD (stands for “Good Hair Day”). Both, he tells me, are poised at an interesting fulcrum of development, from the brand and new product point of view.

Maserati, an ultra luxury sports car marque lodged in the Chrysler/Fiat stable, has been given a €1.6bn injection to broaden its model range and take on Porsche.

GHD – which produces premium-priced hair stylers – is also cash-rich after being bought for £300m by Lion Capital. Lion is investing in npd, with a view to bringing GHD out of the salon and onto the international stage. Inevitably, that is going to involve careful brand positioning as GHD moves into a broader market segment.

However, Pinder is coy on the subject of who, apart from Maserati and GHD, is bankrolling all of this. It seems likely that both principal founders (Pinder and Rawlings) have skin in the game. But a project of this scope is financially beyond most individual investors, even if they are relatively wealthy admen. Private equity seems to the answer. Among the list of network associates is, rather intriguingly, a UK-based hedge fund called Toscafund, whose chairman is former RBS bigwig Sir George Mathewson. Pinder claims Toscafund is very handy on the “analytics” side. No doubt. But my guess is it’s providing a lot more resource than that.


Ford shows it doesn’t care a Figo for Indian political and cultural sensitivities

March 25, 2013

Ford Figo/HiltonGood advertising is, like good comedy, about timing. About sniffing out the zeitgeist and then putting an inimitable twist upon it.

Judged by such criteria, Ford’s latest “offering”, in India, for its Figo model ranks very high.

What could be more timely than demonstrating the little car’s exceptional cargo-carrying capacity than three nubile women, one scantily clad, all three bound and gagged, occupying the boot space?

Closer inspection of the ad reveals that the caricatures are supposed to represent actual celebrities. In the front seat is Paris Hilton, looking over her shoulder and winking at us. The gagged lovelies are Kim Kardashian and her two sisters. It’s all good clean fun, in the best possible taste. And part of a wider humorous narrative in which well-known personalities get their revenge on rivals by confining them to the back end of the surprisingly capacious Figo. We can tell this from another execution in the campaign, which shows ex-Formula One ace Michael Schumacher dealing with his rivals Sebastian Vettel, Lewis Hamilton and Fernando Alonso, in the same summary manner. Oh, and get this. There’s a third ad with Silvio Berlusconi in the driving seat… need I go on?

Naturally, we’re never going to get so far as savouring the full complexity of the Team WPP (for it is they) humorous palate; not once our attention has been arrested by the sight of a restrained, near-naked Kardashian – and the tumultuous outcry which has accompanied it within right-thinking circles across the Indian sub-continent.

Ford, of course, is mortified. Though whether by the political and cultural insensitivity of the ad, or the chorus of execration that has greeted its appearance, is not altogether apparent. No doubt Team WPP will also be walking about with its tail between its legs for some time to come.

The official explanation is that the ads were created merely for “in-house” use (whatever that might mean) and that they somehow got posted on the internet.

Isn’t it a bit early for April 1st?

Or do creative teams really live in such a cultural bubble that they are wholly insulated from events in the wider world ?

Come to think of it, what were their bosses doing while all this harmless in-house glee was going on?

UPDATE 27/3/13: Now we know the answer to that last question. The bosses were implicated up to their gills. And have paid the price in full with forced resignations. Bobby Pawar, JWT India’s chief creative officer & managing partner, as well as Vijay SimhaVellanki, creative director at Blue Hive, a WPP unit dedicated to managing the Ford business, are no longer on Team Ford – or for that matter, employees of WPP. More on this at MAA.


Fake Pepsi viral takes punters for a ride

March 15, 2013

Jeff GordonThere’s a rather thrilling viral doing the rounds that features top NASCAR (US stock car) racer Jeff Gordon giving a car salesman the ride of his life in a used Chevrolet Camaro. A heavily disguised Jeff is posing as a mousy middle-aged punter, and the stunt is, allegedly, in the service of Pepsi Max, which gets a prominent product placement plug, as can be seen here:

Except the viral seemingly has nothing to do with Pepsi’s agency TBWA\Chiat\Day, and the real driver wasn’t even Jeff Gordon. It’s a stunt staged by actors, a 100% fakaloo. The only fact beyond doubt? That this “ad” is the week’s top viral, having been shared by millions of people. According to the website Jalopnik, which seems pretty clued up on the subject:

A report in Concord, NC’s Independent Tribune verifies what our insider told me: “Racer Brad Noffsinger, who works with the Richard Petty Driving Experience, did the stunt work for the production.”

And there are, in addition, a number of giveaways about the authenticity of the viral relating to the car itself. The video was in point of fact produced by Gifted You, which is owned by Will Ferrell‘s Funny or Die company.

Was this commercial even put together at Pepsi’s instigation? Maybe we have a “Grassy Knoll” situation here.


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