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Neogama founder and creative chief upsets the BBH applecart by trying to sell his stake

December 19, 2011

There’s an interesting ownership conundrum facing BBH and its 49% sponsor Publicis Groupe. Here is what I have learned.

It concerns Neogama BBH, the global micro-network’s Sao Paulo agency. Its founder, president and chief creative officer Alexandre Gama wants to cash up the majority stake he owns.

Neogama, set up in 1999, is one of Brazil’s top ten agencies and quite a feather in BBH’s cap. It is creatively highly regarded and was the first Brazilian agency to win at Cannes. In fact, if my recollection is correct, it now has at least 18 Lions to its name.

The agency’s biggest single client is burgeoning Brazilian bank Bradesco, but it also plays an important role in servicing BBH global clients such as Unilever and Diageo.

Here’s an example of Neogama’s latest work for Diageo’s Johnnie Walker, which may well be a Cannes prizewinner next year. It was devised by Gama himself:

As you can see, a slick, confident peaen to Brazil, the awakening economic colossus.

BBH, seeking to increase its profile in up-and-coming Latin America, came about its minority Neogama stake in a convoluted way. Back in 2002, Neogama was 40%-owned by Chicago-based holding company BCom3 – the 3 referring to an alliance between Leo Burnett, DMB&B (now deceased) and Dentsu. BCom3 passed on a part of that stake to BBH, in which it by then held a 49%  share through Burnett. Still there? Because it gets even more complicated. Earlier that year along comes Publicis Groupe, which swallows the lot, including Dentsu’s 20% strategic stake, in a $3bn takeover deal, making it the then fourth-largest marketing services group in the world. The important point to note is that PG ended up holding a direct 49% stake in BBH, but only an indirect one through BBH in Neogama. Publicis Groupe CEO Maurice Lévy and Gama are not thought to be best buddies.

Although the subsequent BBH relationship has been mutually beneficial, Gama is known to have been hawking his stake at other agency group doors. Why now? Nine years is a long time to wait for your investment to mature, but some go further in speculating that he is worried about his agency’s dependence on Bradesco as a client.

The sense is that Gama is engaged in an act of brinksmanship with Lévy, which involves using rival groups as a stalking horse. He well knows his own worth: Neogama is far and away PG’s best agency in Brazil (and one of its best in Latin America).

However, buying him out may not prove that easy. If BBH could stump up the cash on its own, that would be the simplest and most elegant solution; but  the likelihood is it cannot. So why doesn’t the parent group just step in and sort it out? Well, PG is not a bank – it will want something in return. Such as buying a majority stake in BBH. The trouble is – PG is also Procter & Gamble’s biggest agency group. BBH is of course a Unilever agency, but the 51% majority stake held by the partners keeps the relationship at arm’s length. Even in this enlightened era of agency conflict management, full ownership of BBH might not go down at all well with the good folk in Cincinnati.

As I say, it’s an interesting dilemma. Let’s see how Gama, Lévy and BBH group chairman Nigel Bogle sort it out.

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Whatever you think of the British Airways ad, for God’s sake don’t mention the War!

September 23, 2011

 

Long awaited; now we’ve seen it: BA’s first major corporate advertising campaign in over a decade.

It represents a litmus test moment for agency BBH which, frustratingly, has had to battle through years of turbulence, in the form of industrial unrest, corporate mismanagement and radical restructuring, not to mention volcanic ash-cloud and a recession, before being allowed to do its first major work since wresting the account from M&C Saatchi in 2005.

But what do we – the viewers, the BA audience – think of it? Does it magnify the brand, or is it simply grandiloquent? Does it, in sum, hit the right note?

To my mind, the 90 second ad rumbles along the runway well enough but fails to reach the soaring heights to which it aspires. True, it’s beautifully shot with what appears to be loving attention to period detail. And it’s hard not to be touched by the romance and heroic derring-do of early civil aviation that underpins this hommage to BA’s corporate history. Then there’s all that gleaming, nostalgic aerial technology: the primitive, wind-in-your-hair De Havilland DH-9; the elegant Dragon Rapide; that rugged warhorse the DC3; the once-ubiquitous VC-10, as we move into the age of jet propulsion (though not – I note – the more innovative and earlier Comet, with its unfortunate tendency to metal fatigue in mid-flight); and on through the sound-barrrier with the space-age Concorde, the fastest airliner ever built.

Stirring stuff. But here the epic narrative plunges into bathos, with the appearance of BA’s contemporary fleet of 747s – utilitarian, safe and (relatively) economic no doubt, but hardly the epitome of legend. Indeed, the ad’s closing sequence merely reminds us that the transcendent feature of modern-day civil aviation is its banality. Today’s pilots may be terribly well trained and reliable but, in an age of advanced avionics and autopilots, the risks they run hardly bear comparison with those of their intrepid predecessors.

That is not my only criticism, however. If you’re going to do a nostalgic commercial, make sure it’s glamorous rather than merely portentous. Virgin Airlines knew exactly what it was about with its 25th birthday tribute (crafted by RKC&R/Y&R) 2 years ago; it’s shallow, showy bling, but none the worse for that in imparting a sense of credible excitement.

With the BA ad, by contrast, we’re in trouble almost from the beginning with that overwrought voiceover addressing its paean to the heroic pilot qualities of a bygone age.

And then – and this is the corker – there’s that extraordinary catchline – To Fly To Serve; a motto, we’re told, pinned to the chest of every serving BA captain. Close your eyes, and you can imagine Guy Gibson touching down in his Lancaster after destroying the Möhne Dam. Actually, I’m not joking. “To Fly To Serve” is the English translation of Volamus Ut Serviamus, the motto of 691 Squadron – which was formed on December 1st 1943 with a brief to provide the Royal Navy with aerial training targets around the Plymouth area.

Unfortunate coincidence? Someone not done their homework properly? Probably. But also a subliminal clue that most national carriers (so I’m informed) are military in origin. BA, for instance, is a lineal descendant of Aircraft Transport & Travel (just glimpsed at the beginning of the ad), which was set up during WW1 with a fleet of former military aircraft. Not, I imagine, an aspect of BA’s heritage that its management would care to dwell on.

It would be no surprise to find this particular ad line experiencing a rapid upgrade.


Yeo Valley Marketing Society gong does wonders for the tired old TV spot

June 8, 2011

It’s nice to see one of the ads I tipped as last year’s best of the crop has come up trumps. The Yeo Valley rappers have just won a top effectiveness award – the Marketing Society Awards Grand Prix no less.

Which must be mightily gratifying to the organic yoghurt brand and BBH, the agency that bet Yeo’s ranch – and possibly their reputation – on the success of a single, high-profile TV campaign. It was by any standards a massive gamble. Yeo is a regional player (of West Country origin), of limited budgetary means, operating in an unsexy sector. It had never, to my knowledge, used TV before and yet was persuaded to blow mcuh of £5m on a single 2-minute slot in the X Factor last autumn.

All right, it wasn’t just TV. Digital support, via a website, Twitter and subsequently YouTube (1.65 million viewings, and rising), played its part: but they were just that, support – and a minuscule part of the spend. Without the high awareness created by the ads, the viral effect of social media may have amounted to very little.

So, a plug here for the good, old-fashioned TV slot. It’s not dead yet – and nor is BBH’s reputation as one of its prime purveyors.

In the 3 months following the campaign, the Marketing Society blurb tells us, Yeo Valley became Britain’s fastest growing brand, with an extra 500,000 people buying its products, and sales swelling by £3.5m. As one of the bucolic lads in the ad claims: “We changed the game, it will never be the same.”

Though it may well be the lass who harvests the biggest dividend. I hear Surrey girl Alexandra Evans’ modelling career is going gangbusters.


Would you Adam+Eve what agencies call themselves these days?

October 5, 2010

The Assembly has just won the global account of big-four auditor Ernst & Young. Apparently, it produced a better ‘toolkit for accountants’ than anyone else. Ah well, you nod sagely, it’s obviously a B2B account – dull as ditchwater; no wonder it’s been won by an agency no one’s ever heard of before.

But you’d be profoundly wrong. In fact the pitch was highly competitive, handled by the AAR and featured about a dozen of adland’s finest – including BBH, Engine and Miles Calcraft Briginshaw Duffy (MCBD). Perversely, The Assembly is probably the one name that wouldn’t trip off your tongue if you roll-called the whole longlist.

Sterling Cooper: When names were just names

Which brings me to my point. The Assembly is one of a crop of new agency names that vie with each other for esoteric distinction – but jeopardise their USP by being obscure and unmemorable. If the current name-game puzzles me, it must surely puzzle clients too.

How has this rash of self-indulgent agency nomenclature come about? Once upon a time it was oh-so-simple. Agencies were people businesses that recommended their brand through the charisma and usefulness of their founders. So, in the mists of time, we have J. Walter Thompson, Lord & Thomas, Ted Bates, Young & Rubicam, Ogilvy & Mather.

By the sixties, creativity has become the extra magic ingredient in the shingle. It put the Bill Bernbach into Doyle Dane, or for that matter the Draper into Sterling Cooper. Then in the seventies and eighties (a very British thing, this) comes the apotheosis of the planner: Boase Massimi Pollitt, Bartle Bogle Hegarty and Simons Palmer Clemmow & Johnson. It was rare that anyone tore up the rulebook. True, there was the odd alien intervention such as Mojo from Australia; and of course the inimitable Andy Law, who founded St Luke’s. But wackiness came at a steep price. Mojo quickly lost its, and Law was a lot less successful in his next incarnation, which by its very name set itself up for a fall. Boymeetsgirl became Boyleavesgirl after Law quarrelled with his creative director Kate Stanners, and she quit.

You’d think this might be lesson enough for eager young entrepreneurs, but no. Today weird names have become the orthodoxy, and I’ve no doubt it has something to do with digital fragmentation and the increasing difficulty of framing the creative challenge.

Now, I’m all for imagination as long as it means something. Mother, Adam & Eve, yes (doh, it’s all about creativity). Glue: clever idea, sticking it all together. Saint@rkcr/y&r, sort of: bit of a mouthful though. Th_nk? No th*nk you: however pithy, it’s a sub’s nightmare; don’t ever expect a write-up in the FT. Lean Mean Fighting Machine? Looks a bit tame and flabby now it has been fired by Coke (see Andy Law above). 18 Feet and Rising? P-lease. How are we to know this is an obscure allusion to the excessive height of the agency’s three founders – and, even if we do, who cares?

And so on. Which brings me back to The Assembly. Actually, for all its superficial resemblance to a political convention or a Pentecostal sect, the name is not without relevance to the agency world. It reflects a pooling of creative talent. I quote from the CV of one of the founders: “The Assembly’s membership includes 12 Executive Creative Directors and 10 Creative Directors of some of the world’s most creative agencies, London’s foremost women’s artistic collective, a Harvard and MIT professor of culture and consumption, the creative duo behind cult Italian and Swedish fashion brands, the ex-manager of The Rolling Stones, the PR person for rock stars and presidents, a couple of renowned urban artists, one of the world’s most acclaimed architects and the man behind one of the most influential style websites, to name a few.” Phew, manage that if you can.

Such, though, are the complex, chaotic demands of creativity these days. No wonder agencies are suffering from an identity crisis.


Cracks show as creative chief Roddy quits BBH New York

September 29, 2010

To lose one senior executive may be considered a misfortune, but to lose two begins to look like carelessness. Or, in the case of Kevin Roddy, chief creative officer of BBH New York, like an increasing inability to control a fast-unravelling situation.

Chairman Steve Harty was told to go, back in July. The surmise was that he had become too expensive a luxury in the wake of BBH’s sudden and unpredictable loss of the newly-won $270m Cadillac account.

Roddy on the other hand, who is well-respected and well-liked, has quit of his own volition. And clearly in uncomfortable circumstances, for John Hegarty – BBH’s creative doyen – has conceded that there were “disagreements” over the creative direction of the office – not the anodyne euphemism that routinely accompanies executive departures.

What these “disagreements” were is not entirely clear, although we may guess that lack of money  – and the constraint it is imposing on freewheeling creativity – was not entirely unrelated to the bust-up. It is known that a number of creative directors under Roddy have been discreetly looking around recently – testimony that the creative department has not been a happy working environment for some time. Roddy may well have been overstretched. After six years serving as chief creative officer, his duties were extended earlier this year to helping the new chief executive  – and former planner – Greg Anderson with the day-to-day running of the agency.

Interestingly, Roddy had this to say to Ad Age last week, before the storm broke: “Creativity used to be put on a pedestal, and I don’t think that’s the case any more. Creative people have become more of a commodity, and I think that takes the wind out of them. The creative ego is a very important thing, because it drives talent. But it’s also a very fragile thing.”

Like Harty, Roddy lent American credibility to what, in the opinion of critics, was too-British an operation. Roddy, however, is a much more serious loss.


Lévy makes waves in Brazil, but who’s making the profit?

August 26, 2010

“We believe this will be the decade of Latin America, driven by the Olympics and the World Cup.” Who’s this speaking? In fact, WPP chief Sir Martin Sorrell, referring specifically to one of his favourite BRIC markets; but it might just as well have been his indefatigable rival, Publicis Groupe ceo Maurice Lévy, who has been hoovering up Brazilian advertising agencies as if there’s no tomorrow.

He recently bought a smallish, but trendy, digital agency AG2 , which has been stitched onto Publicis Modem. His latest headline-grabber is a bid for Talent, a privately-owned creative agency that counts Sony, Timberland and Santander among its clients.

According to the Financial Times, which broke the story today, a successfully concluded deal will give Talent a sky-high valuation of $200m (it employs about 200 people), making selling out to the big networks a highly attractive option for other independent São Paulo agencies.

One of Lévy’s gifts as a dealmaker is his ability to seduce his acquisitions into the group as “partners”, leaving them a strong independent identity less liable to defection once the earnouts are paid. The stake in BBH, still 49%, is the most notorious example. With AG2, he has been careful to remodel the network name as AG2 Publicis Modem, in Brazil. At least for now.

The thinking behind the Talent deal is no different. I’m told it’s actually a disguised takeover, to spare the acquired agency’s blushes. Publicis will take 49% when the deal is initially concluded, 11% in 6 months and the rump-end 40% in 3 years’ time. Founder Julio Ribeiro plans to stay on, but he’s of Ed Meyer vintage (78 to be precise); and the chief executive is himself 58.

Talent is a decent agency, with post-tax profits of about $15m (swelled by the Santander account) on revenues of about $50m. But the deal – though a good headline-catcher – is not game-changing for Publicis in Brazil. WPP, which itself showed earlier interest in the agency, is the dominant force. Talent is 15th in the market ranked by billings (according to the latest IBOBE figures, which exclude other marketing services revenue). Publicis’ top Brazilian agency, F/Nazca Saatchi & Saatchi, is ranked 10th, Leo Burnett 13th, Publicis Worldwide 22nd, and Salles Chemistry 33 . But WPP’s Y&R is number one, JWT number 2 and Ogilvy number 3, with Grey trailing at 41. Aggregate score? WPP 1, Publicis (even including Talent) 3.


Why BBH had to let Steve Harty go

July 22, 2010

First it lost the $270m Cadillac account, then it resigned the foundation Levi’s business after no new campaign in nearly two years. Now we hear Steve Harty, eminence grise of its New York shop these past five years, is being let go. It looks, to surface appearances, as if BBH and its micro-network model, is in a downward spin.

None of this is good news, granted. But it’s not quite so grim as it first appears.

Commentators have been quick to place Joel Ewanick, GM’s maverick new marketing supremo, at the centre of events; and they’re not entirely wrong. The rabid Red Queen of marketing (“Off with their heads!”) – as he’s becoming known – certainly didn’t help matters when he pronounced the death sentence on BBH’s “Mark of Leadership” strapline. But easy come, easy go. BBH New York had only held the account for six months. The business wasn’t there long enough to qualify as a foundation client, like Unilever or Diageo.

The loss does, however, have a direct bearing on Mr Harty’s “future direction”.  Harty, previously the ceo of Merkley Newman Harty, was brought in about 5 years ago as chairman of the New York office, to lend an American accent to what was seen as too quintessentially British. Things had not been going that swimmingly under his predecessor Cindy Gallop – herself a British national of long-matured BBH London vintage. In the event, I’m not sure how well the Stars & Stripes card, of itself, worked in pulling new business; but of one thing we can be certain: Steve Harty came with a very high price tag.

Fast forward most of those five years to winter 2010. A senior management reshuffle at BBH New York left Harty looking vulnerable. Emma Cookson, the long-serving ceo who seems to have done much of the heavy lifting in the New York office, stepped up to Harty’s role while he himself became group chairman of North America, in charge of digital production, brand-creation operation Zag and new acquisitions. The reshuffle happened immediately after the Cadillac win; but just as importantly, in the wake of a new dictum from London HQ: that senior executives should spend more time servicing key clients. In Cookson’s case, the client was Cadillac. Which means, in theory, that she now has a lot more management time on her hands.

Subtract Cadillac, and Harty – nice guy though he evidently is – becomes the white elephant in the room. A luxury too expensive to maintain.


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