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£1.7bn global ad review is creative solution to Johnson & Johnson’s money problem

July 25, 2012

It would be nice to think that Johnson & Johnson’s newly announced review of its £1.7bn annual advertising spend was driven by a need for greater creative consistency. But it isn’t.

Money’s the thing – saving it that is. J&J may be one of the world’s biggest brands, but it’s also a company in trouble. Since 2009 J&J has suffered numerous recalls in the US, mainly of its over-the-counter drugs like Tylenol and Benadryl; but the prescription and medical devices businesses have also been hard hit. All in all, it’s said to have lost $1bn in sales, partly through bad luck and mostly through sheer incompetence.

At first it was the staff – including the marketing department – who paid, by being made surplus to requirements. Now it is the spend that’s being trimmed. Judge for yourself from the officialspeak: “Johnson & Johnson is conducting a global agency review and consolidation to build greater value and deliver innovative and fully integrated solutions for our consumer brands.” Well, they wouldn’t want less innovative solutions would they? And they could hardly be less fully integrated than they are at the moment.

In truth, there’s an easy win here for the new kid on the block, Michael Sneed – who became J&J’s top marketing (and PR) officer at the beginning of this year. There could hardly be a less efficient way of running your global marketing services than the one that exists at the moment. Uncle Tom Cobbleigh and All are at the advertising trough. It would be simpler to name a global marcoms group that isn’t on the roster.

WPP has business through JWT and AKQA; Publicis Groupe through Razorfish; Interpublic through Deutsch, Lowe, The Martin Agency and R/GA; Omnicom through DDB and BBDO; and Havas through Euro RSCG. That leaves, er, Dentsu and MDC off the list.

Sneed is a company lifer who, at various stages of his J&J career, has shown considerable sensitivity towards advertising creativity. It will be interesting to see whether this natural instinct gets overridden by the all-powerful imperative of saving the company money. Don’t expect a self-aggrandising Ewanick moment – Sneed seems too modest for that. Do expect a financial deal, of the “Team WPP” or more likely “Commonwealth” variety, that dresses up financial expediency as a coherent creative solution.

The most interesting thing about this review may be the losers. If Interpublic is among them, perhaps group CEO Michael Roth will at last seek to do a deal with Publicis Groupe. The air is certainly thick with rumours to that effect at the moment.

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Havas’ David Jones – the man who would be king

March 9, 2011

What a week to be away. Mark Lund, chief executive of the COI, announces he is quitting after only two years (it’s usually a five-year contract) to return to the private sector. There could be no bleaker verdict on the outlook for public-sector marcomms expenditure in the foreseeable future.

Meantime, David Jones (on the right) has emerged as group CEO of Havas’ global operations. Jones takes over from Fernando Rodes, who has held the post since billionaire financier and industrialist Vincent Bolloré first became chairman and principal shareholder (35%) of Havas.

At first sight, the management shake-up comes as a complete surprise, with Rodes unexpectedly announcing his semi-retirement at a board meeting yesterday. In fact, the accompanying restructure has all the hallmarks of a carefully stage-managed event. It should also be noted that Rodes’ resignation comes precisely five years after he was installed in 2006.

Rodes has been competent rather than outstanding at the Havas helm, and seems to have been feeling the pressure from Bolloré. Global expansion has been hesitant and Havas’ recent set of annual results show solid rather than spectacular signs of recovery. They certainly lag the performance of the really big hitters such as WPP and Omnicom.

Rodes is a complex and somewhat enigmatic figure. He holds many trump cards: urbane, an accomplished linguist, well plugged into the Franco-Iberian business community, he is also a key player in MPG – a media planning/buying specialist set up by his father Leopold, and now a strategic component of Havas. But the appeal (like MPG’s) is regional rather than global. And he comes across as a somewhat reluctant leader.

Jones, whose middle name is ‘Vitality’, can be accused of no such reticence. For some time, he has been the obvious leader-in-waiting, as head of EuroRSCG Worldwide and latterly Havas Worldwide (meaning all of Havas’ global advertising operations). Which is where the recent growth, particularly in North America, has really been happening.

To these responsibilities will now be added MPG, plus other media buying units such as Arena. Note, however, that Jones’ own power-base remains intact: he will continue to be CEO of EuroRSCG.

He’s a shoo-in in other respects, too. Fluent in three languages (English, French and German), Jones has been an indefatigable performer on the world stage ever since he rose to prominence at Havas. He is a natural brand ambassador.

We should not underestimate his achievement, however. At 44, he is the youngest-ever CEO of a premier league advertising and marketing services group. He is also that extraordinarily rare phenomenon, a Brit in charge of one of France’s most cherished companies.

No pressure then, though I doubt he’ll show it.


Omnicom closes $100m Communispace deal

January 25, 2011

Silence reigns at Omnicom Towers on its mooted $100m deal with eCRM and insight company Communispace. Which is odd, for two reasons. First, it is the biggest deal engineered by the marketing services juggernaut since its ill-fated acquisitions of Agency.com and the somewhat more successful Organic in 2003. Second, and rather crucially – I hear the deal has gone through.

At all events, Communispace founder, president, chief executive and 10% shareholder Diane Hessan is packing her bags (now presumably heavy with loot).

The question is, what happens now? In an earlier post, I pointed out that $100m is a very steep price – yet, curiously, it does not seem to have been a stumbling block for that wily operator John Wren, Omnicom president and chief executive officer.

At the time I concentrated on the financials, and speculated that there must be something very special about this deal for Omnicom to hazard such an over-priced acquisition. That logic can be applied with equal relevance to Communispace’s clients. True, there are many the two parties have in common, plus a few that Omnicom would like to lay hands on. Yet it’s hard to ignore the conspicuous conflicts. Not just on the brand side, either. A slug of Communispace’s business flows from Omnicom’s rival agencies. Here’s an excerpt from AdAge that neatly summarises the conflict dilemma:

One reason why an Omnicom deal would make sense? Communispace lists as its clients several marketers that work with agencies under the holding company’s banner, including HP, PepsiCo, FedEx, Kraft and Campbell. But the Communispace client list also includes agencies at rival holding companies, like Havas’ EuroRSCG, Publicis Groupe’s Starcom MediaVest Group and Interpublic Group of Cos.’ Martin Agency. Were an Omnicom deal to happen, such alliances would likely have to dissolve, as would accounts with clients like Verizon, a major competitor to a big Omnicom client, AT&T.

I’d add WPP’s Ogilvy to the list of competitors as well (check out Jim Edwards at BNET on this one).

How does Wren plan to steer himself around that one? His last experience with a major acquisition, controversially managed through off-balance-sheet vehicle Seneca Investments, was not a happy one. Let’s hope history does not repeat itself.


Tales of the Recession. Part 3: The Epica Awards

December 16, 2009

Whether consciously or not, our collective verdict as judges at this year’s Paris-based Epica European advertising creative awards was drenched in la morosité – the all-pervading gloom oozing out of this recession.

To be sure, we had less to play with than usual in framing our choices. Entries were down 37%, marking the steepest decline in the awards’ 22-year history. But it wasn’t just the industry that was acting defensively. Each of our winning choices seemed to be tinged with an element of nostalgia for better times, concern for traditional craft rather than the avant garde and adventurous, or marked by an emphasis on practical solutions to the bleakness around us.

The film Epica d’Or, for example, was won by Saatchi & Saatchi London for T-Mobile’s “Dance”. It was supposed to be a joyous hoe-down dedicated to connectivity, but could equally be interpreted as a St Vitus dance by a moribund brand about to be swallowed up by Orange (in the UK, at any rate).

The press Epica d’Or was won by DDB & Co Istanbul for Dank’s second-hand furniture campaign. Need I say more about the undertone?

The outdoor Epica d’Or went to  Euro RSCG Dusseldorff for its Citroën “Cornering Lights”. Although the ad trumpeted technological innovation, the graphic treatment was solid and traditional (nothing wrong with that, of course).

Then we come to the integrated campaigns category, which was won by Heimat Berlin for Hornbach’s “House of Imagination”. Hornbach is a leading German DIY chain, where business must be booming right now.

And finally, when all else fails, never forget the power of prayer. The interactive Epica d’Or was awarded to Forsman & Bodenfors, Gothenburg, for the Svenska Kyrkan (Swedish Church) Campaign for Prayers website.

Recessions often prove to be turning points in long term trends. And here, too, the results did not disappoint. DDB was knocked from its perch as top advertising network for the past four years by Euro RSCG, which had 7 winners (DDB had 6). Leo Burnett and Ogilvy tied for third position with five each. BBDO and Saatchi had 4 apiece.

Another sign of changing times: Britain fell way down the ranking of winning countries, to fourth. It is the first time we have finished outside the top 3 in the history of the awards. A portent, or just a blip? We’ll have to see.

Just for the record, Germany was the most successful country, with 18 winners, and also accounted for the most awarded agency, Serviceplan Gruppe Munich & Hamburg. France came second and Sweden third. For more on this year’s awards, click here.


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

November 25, 2009

It must be national bad hair week and I hadn’t noticed. Nothing else would seem to explain the explosion 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 – to whom our two sporting heroes have been lending not only their prestige but their balding pates.

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. 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 of 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.


BBH director defects – but not to WPP

October 30, 2009

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

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


Carolyn Carter bids adieu to Grey Europe

September 3, 2009

Carolyn CarterGrey’s enigmatic ice-maiden is on her way at last. Carolyn Carter, ceo of Grey Europe, has been the target of almost constant speculation about her ‘imminent’ departure since 2006, which she has successfully quashed with Mark Twain’s famous rejoinder. Now, after over 20 years’ service in the higher echelons of an advertising empire long treated by Ed Meyer as his personal fiefdom, but latterly owned by WPP, she really is on her way out. Gone by Christmas time, they say.

Originally, Carter was a client: she joined Grey from General Foods in the early 80s. In 1996 she moved to London as global account director for Mars, a staple Grey client. From 2002  she gradually took on the mantle of John Shannon – possibly the longest-serving senior executive in advertising history – becoming ceo Grey Global Group EMEA in 2004. She, like Shannon, might reasonably have expected to see herself through to retirement age. Meyer was incredibly loyal to senior executives who quietly and efficiently accomplished his aims, which might be defined as personally enriching him, but not at the expense of alienating any of his key clients. It could be a harrowing, stressful role. Which is one reason why top Grey executives used to be some of the most highly paid in advertising.

But the world of Grey changed irrevocably when Meyer decided to cash in his chips and put his agency up for auction in 2005. WPP, the eventual winner, has been every bit as exacting as Meyer, but in a different way. Out went the stellar salaries, Carter’s own excepted.

Carter faced early disappointment when Jim Heekin, formerly of McCann Erickson and Euro RSCG, beat her to the top position at Grey, which anyone else might have interpreted as curtains time. Hence the speculation about her leaving. Cool, ruthless professionalism has seen her through. Until, at least, an unprecedented slump in advertising revenue forced WPP to wield the retrenchment axe more savagely than might otherwise have been the case.

Now it’s time for her to go. David Patton, UK group ceo, will be confirmed as the new EMEA chief. Chris Hirst, his managing director, may take over the top UK role. Carter will miss the London theatre scene, but how much else I do not know.


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