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Who will win Tesco’s £110m advertising account?

April 13, 2012

Stand by for the most hotly contested UK advertising pitch of the year – the £110m (Nielsen) Tesco account is up for grabs.

But don’t hold your breath for a result. This is going to be a long-drawn-out contest, meticulously referee’d at every stage by agency intermediary Oystercatchers. Not a cosy inside job, pushed through on a nod and a wink from Tesco’s C Suite, as has tended to be the case in the past.

The first stage, happening quite soon, will be the selection of 13 agencies for a credentials presentation. From these, 6 will be invited to pitch, 3 will be eliminated and the winner will emerge in, oh, July some time. If all goes according to plan. So, expect the air to be thick with speculation over the next 4 months.

Let’s be clear before going any further. What’s particularly interesting about this pitch is not the fact that it is taking place now. Few readers will have failed to notice a changing of the guard at Britain’s top retailer, starting with the departure of group chief executive Sir Terry Leahy about a year ago and his replacement by Phil Clarke. Clarke is clearly a man who knows what he wants, and has wasted little time letting his senior colleagues know it too. Out went one-time rival for the top job Richard Brasher, until very recently UK CEO, after some lacklustre performance in the core operation and in came (a little earlier, as it happened) David Wood, late of Tesco Hungary, as head of UK marketing to replace Carolyn Bradley; meantime micro-managing Clarke has seized the UK helm himself.

Equally evidently, Clarke has been under heavy pressure from shareholders to shake things up, pronto. Tesco is still the UK’s biggest grocer by a wide margin, but it is a declining one. Others – practically all its leading rivals in fact – are bettering it in today’s tough market. Earlier this year, Tesco had to do the unthinkable: issue its first profit warning in 20 years, which knocked about £4.5bn off its stock market valuation in one day.

Personal animosity certainly came into Brasher’s dismissal, but there is little doubt that he was a convenient scapegoat too. And maybe with good reason. Brasher’s Big Price Drop campaign was a prelude to a disastrous Tesco Christmas. Brasher also held some rather fixed views on long-term investment. Whereas, what shareholders actually want is profits now, not in some misty future. Clarke knows that a second profit warning will effectively be his corporate suicide note.

So no pressure, Phil, to review your strategy. Ordinarily, UK advertising might seem to bat fairly low in a retail group CEO’s priorities – way beneath, for example, such operational issues as how many and what sort of new stores to open. Not so here, however. In giving Brasher the heave-ho and replacing the muddled duarchy at the top of UK management with a more focused leadership – himself – Clarke is also implicitly challenging Tesco’s long-established marketing tradition. Note that Brasher – like Leahy – came up the marketing route; before being promoted to UK CEO in March 2011, he had been UK marketing supremo since 2006. Clarke, on the other hand, is grounded in operations and IT, not marketing.

That’s why the key word associated with this advertising review is “clarity”. Having brought more focus to UK leadership, Clarke also intends to bring more focus to Tesco’s UK marketing effort. And he’s going to do it by asking some fundamental questions about Tesco’s current positioning. Are the assumptions underlying ‘Every Little Helps’ still relevant in today’s market? How does Tesco’s current marketing strategy benchmark against that of its apparently more successful UK rivals? Has the Tesco brand become too arrogant and impersonal – through servicing the requirements of the City rather than its customers? Clarke wants ideas from his agency pitch list, not just a new colour chart.

Superficially, this looks like bad news for the incumbent agency of 6 years, The Red Brick Road (or Ruby, or whatever the new digitally-enhanced business is going to be called). Although asked to repitch, it is indissolubly linked to the very marketing tradition that Clarke seems hell-bent on changing. Lineally, TRBR is descended from Lowe Howard-Spink; and the strong historic relationship forged between Lowe founder Sir Frank Lowe and Tesco top brass Leahy and his chief marketer Tim Mason. When Sir Frank split from Lowe & Partners (as it was by then called), Tesco backed his breakaway TRBR, but only on condition that Lowe creative chief Paul Weinberger was an integral part of the deal. To this day Weinberger, now chairman of TRBR, is the key mediating figure on the Tesco account (Lowe himself having retired).

That said, there are plenty of good reasons why Tesco might choose to retain TRBR’s services.

First, alone among competing agencies, TRBR will be the one tailored specifically to Tesco’s requirements. (Indeed, many would say this is its primary problem as a diversified advertising agency: despite doing good work for the likes of Magners cider and Thinkbox, it has failed to shake off the image of being Tesco’s house agency.)

Second, notice that Tesco has been careful not to pull the rug entirely from under TRBR. Up for grabs is all the consumer-facing digital and traditional (ie television, press, radio and outdoor) advertising. But not, you’ll observe, trade advertising, which is a substantial part of the overall TRBR fee package. One explanation for this, no doubt, is the sheer complexity of trade marketing; but Tesco also seems to be sending a mildly positive signal to its agency of longstanding.

Third, since this review is really about positioning rather than a creative makeover or a new catchline, don’t underestimate the skills of David Hackworthy and his TRBR planning department.

Fourth, don’t forget that Tim Mason is part of the review team. It’s surely only a matter of time before shareholders get their way and have Clarke cauterise the eye-watering losses at US venture Fresh & Easy, on which Mason currently spends two-thirds of his executive time. That will free more time for Mason’s other two roles as group deputy chief executive and, more pertinently here, group CMO. (It’s also possible that he might choose at that point to bow out; but no one should bank on it.)

Who else will compete for the account? Many prime candidates with suitable retail experience – BBH, DLKW/Lowe, Fallon, AMV BBDO, Rainey Kelly Campbell Rolfe/Y&R – are excluded precisely because they have conflicting supermarket accounts. However, Tesco has made it clear it will look tolerantly upon other kinds of agency conflict: for instance, a clash in financial services or telecoms.

That leaves plenty of possible contenders. As my associate Stephen Foster at MAA has pointed out, Publicis London is surely one of them. Historically, it was keeper of the Asda account and is now captained by former TRBR managing director and Tesco account director Karen Buchanan.

But the hot money will be on WPP. There’s some unsettled business here. Those with keen memories for this sort of thing will recall that, 7 years ago, WPP agency JWT came close to winning a big supermarket account after hiring two key Tesco agency players, Mark Cadman and Russell Lidstone, from a clearly flagging Lowe.

From what I hear, WPP is putting every resource possible behind winning the Tesco trophy. Not only is JWT throwing its hat into the ring; so are Grey, Ogilvy, 24/7 Media and CHI. Though whether individually or as part of a WPP “Team” effort I don’t yet know.

However, WPP agencies should tread with care.

Tesco will surely be aware, or have been made aware, that there is a certain amount of bad blood between Britain’s best-known agency intermediary Oystercatchers (founded by Suki Thompson and ex-JWT new biz director Peter Cowie) and Britain’s best-known and biggest marketing services company, WPP. Namely, the Everystone breakaway affair and its litigious sequel, which came to an unhappy conclusion about a year ago.

The formality of Tesco’s pitch procedure and its choice of intermediary suggests that there is no easy inside-track here for WPP chief Sir Martin Sorrell. I suspect his best course will be to keep an uncharacteristically low profile for the duration of this pitch.

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Polman gambles on sustainability paying off

December 7, 2010

Paul Polman, chief executive of Unilever, is either a very wise or foolish man. At this stage it is difficult to tell which. All we can say is that he has embarked on a courageous and momentous enterprise.

Ogilvy & Mather, which recently won Unilever’s multi-million pound corporate development account from Fallon, will shortly unveil details of the company’s 10 year sustainability strategy – Polman’s brainchild – to a largely unsuspecting public.

We’ve heard a lot about companies commitment to the mantras of corporate social responsibility – the Triple Bottom Line (3BL) of People, Planet and Profit. But frankly not much action, since Marks & Spencer’s milestone Plan A initiative in 2007. Polman’s plan is a lot more ambitious than M&S’s – and a lot more risky in the open-handed commitments it makes to supporting causes that may boomerang on core corporate objectives of profit and brand share, if mishandled.

To give the flavour of the plan’s ambition, it commits Unilever to source 100% of its agricultural-sourced products sustainably; to halve the environmental footprint of all its products – not just at the manufacturing stage, but from suppliers through to consumers; and to tangibly benefit the health of 1 billion people. All this in ten years. Even Polman admits he does not know how it’s going to be accomplished – yet.

The measure of the risk is this. Unilever is a major public company dependent upon the goodwill of institutional investors and their financial advisers. These people deal in quarterly earnings assessments, not ten-year plans based upon ‘idealistic’ notions. There’s still very little appetite in the City for the “Planet” element of the 3BL. So far, so good for Polman’s reputation: he has delivered 6-quarters of uninterrupted earnings growth. For now, they’ll humour him. But what happens if, at some future date, ‘Planet’ gets in the way of ‘Profit’?

Similarly marketing and brands. Polman has taken the visionary step of placing marketing, communications and Unilever’s sustainainability policy in the hands of its chief marketing officer, who for the first time is a board-level executive. That certainly advances the cause of joined-up strategy at the highest level. But it may give Keith Weed, the CMO in question, a few headaches when he comes to reconcile the consumerist ethic with a creed which is, in some respects, anti-consumerist.

There’s more in my Marketing Week column this week, not least some speculation on why Polman is prepared to take such an enormous gamble with his hitherto unblemished career.


Phil Rumbol lays his reputation for creativity on the line

September 8, 2010

For months it has been an open secret that Phil Rumbol, former Cadbury marketing director, was plotting to set up an advertising agency. The trouble was, most of us were on the wrong scent; the idea being he was going to head the London arm of Omnicom’s creative boutique, Goodby Silverstein & Partners.

At the same time, there were ominous rumblings of discontent at Fallon, the creative outpost of SSF, which also runs Saatchi & Saatchi London. Fallon – once highly praised for its Sony Bravia and Cadbury work – has latterly been dubbed “Fallen” by industry wags who, no doubt, have in mind the successive loss of the £70m Asda account, Sony, and the transfer of the £100m Cadbury account to Saatchi after some controversial Flake work went awry. The talk was of a possible management buyout. In the event, it is chairman Laurence Green and creative director Richard Flintham, rather than the agency, who have walked.

What we had failed to do was mix these two things together and make an explosive compound. All the more so since the story – broken by my colleague Sonoo Singh, editor of Pitch – has self-detonated in the very week that Saatchi & Saatchi celebrates 40 years of success in its party of the decade.

Details remain sketchy. We don’t, for example, know what the breakaway agency is to be called, nor whether it has any business. Kerry Foods has popped into the frame, specifically the Wall’s sausage brand. If so, it must be a gift from Saatchi.

Whether that’s the case or not, what’s really interesting about this start-up is the key role being played by a former client. Rumbol, so far as I can make out, has never worked in an agency himself, but he has had a distinguished career as a client, which has resulted in some memorable advertising. Boddington’s Cream of Manchester campaign was one of his early achievements, he was the Stella client (need I say more), and the commissioning force behind Cadbury’s Gorilla and Eyebrows campaign, not to mention the more controversial launch campaign for Trident chewing gum.

Rare is the client with such a creative pedigree. Possible examples: David Patton, patron of the Sony Bravia “Colour like no other” campaign; Simon Thompson, long-time sponsor of Honda ads such as ‘”Cog” and “Grr” ; and – long ago – Tony Simonds-Gooding, who tore up some unsupportive research and gave Lowe Howard-Spink the go-ahead with ‘Heineken refreshes the parts other beers can’t reach’. Rarer still is the client who is physically involved in a start-up and prepared to put his reputation, and possibly career, on the line; as rare in fact as hens’ teeth. It’s said that Rumbol earlier got close to signing a deal with Goodby, but that the stumbling block was the creative process, which would be shipped out to HQ in San Francisco. I can well believe it. Here’s someone who clearly has the courage of his convictions.

POSTSCRIPT: Spookily, Fallon has just conjured a new chief executive out of the hat, after a 6-month search. She is Gail Gallie, who was responsible for the BBC becoming Fallon’s first client in 1998.

PPS. It has been pointed out to me that the nearest precedent to Rumbol is the revered John Bartle. Oddly enough, Bartle himself was a Cadbury client. He worked at the confectionery and food company for eight years and, among other things, fostered Boase Massimi Pollitt’s celebrated Smash campaign. The significant difference with Rumbol is that Bartle then spent nine years in an advertising agency, TBWA, before forming the breakaway group that set up Bartle Bogle Hegarty in 1982.

UPDATE 24/12/10: The new agency is to be called 101 (not, thankfully, Room 101). The name has nothing to do with the agency’s official opening day, 10/1/11 – I’m told by a reliable source. We have yet to learn whether it has landed a big fish.


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.


Asda Owen appointment rings the changes

June 15, 2010

More musical chairs in the grocery sector. Although at a lower level than those explored in my Marketing Week column this week, they are connected to the same phenomenon: the need for change.

Mark Sinnock, Asda’s marketing director, has mysteriously quit after only 15 months in the job and been replaced by director of marketing strategy Jon Owen.

To outward appearances, Sinnock was a fish out of water in the hermetic world of supermarket senior management. Rather than working up from the ranks, he was imported directly from Asda’s then advertising agency, Fallon, where he was chief strategy officer. On closer inspection, however, there were some uncanny echoes in his career move to that made by his mentor and boss, Rick Bendel, who currently rejoices in the title of chief marketing director.

Bendel: Like Sinnock, a former adman

For years, Bendel himself had been an adman – one of whose principal concerns was nurturing and safeguarding the invaluable Asda account (it spends £70m a year in today’s terms). When, after reaching the top of the greasy pole at Publicis Worldwide, his luck ran out in the agency world, he was able to make an effortless transition to the client side – as marketing director of Asda. By a further curious irony, Bendel, having left Publicis, promptly fired his former agency and transfered the Asda account to Fallon; in a similar fashion Fallon lost the business to its sister SSF agency, Saatchi & Saatchi, when Sinnock himself went client side.

The Sinnock hiring was part of an elaborate empire-building exercise in the marketing department whose welter of titles has left outsiders bewildered at to what exactly everyone does. Sinnock reported directly to an elevated Bendel, and was responsible for “developing the marketing and customer strategy across the breadth of Asda’s marketing function,” whatever that means precisely. Alongside him was Katherine Paterson, Asda’s marketing director for communications. Then, reporting to Paterson, was head of brand marketing – and former McCain marketing director – Simon Eyles.

One thing transparently clear from the title verbiage is that Sinnock was brought in to simplify Asda’s complex marketing problems. It’s equally clear that the once-favourite has failed in his task, or perhaps been scapegoated for a collective failure. The new boy, Owen, is of more traditional stock, having joined Asda as head of research in 2005. He will combine responsibility for strategy, advertising, insight and pricing.

It’s hard to avoid linking his appointment with chief executive Andy Bond’s move upstairs at Asda and the arrival of a new ceo, Andy Clarke – Asda’s former chief operating officer. In May Asda revealed a slump in its like-for-like figures, which were down 0.3% in the first three months of the year. It marks the first time they have gone into reverse since 2006. Asda is desperate to shed its image as a recession-driven, promotion-mad price-slasher and has returned to its traditional strategy of everyday low pricing. It is claimed that Owen masterminded the recent Asda Price Guarantee initiative. Certainly his appointment underlines a shift towards greater simplicity and a reassertion of the tried and tested in Asda’s marketing strategy.


Tamara Minick-Scokalo resurfaces as Kraft’s European confectionery chief

February 4, 2010

I’m reliably informed that the “senior role” at Kraft being taken up by former Cadbury European chief  Tamara Minick-Scokalo is head of European confectionery.

She will therefore be the pivotal figure in integrating Kraft’s existing product range – principally Toblerone and Milka – with the newly acquired brands at Cadbury.

Readers of this blog may recall that she left Cadbury in slightly mysterious circumstances at the beginning of last July. An American with 20 years experience in Procter marketing, Minick-Scokalo moved to Europe a few years back (she is based in Geneva) and took on the top marketing/general management roles at US wine maker E&J Gallo, then Elizabeth Arden. Two years as head of global commerce at Cadbury Schweppes followed. She afterwards became European president of the demerged Cadbury confectionery operation, in January 2009. As such, Minick-Scokalo sat on the Cadbury executive board, reported directly to chief executive Todd Stitzer, and had control over Cadbury’s confectionery operations in both East and West Europe: that is, over 10,000 employees, €1bn annual sales and numerous factories.

But Stitzer, up to this point her champion, let her go after only six months in what appears to have been a selective senior management cull designed to cut costs.

How fortuitous then, that Kraft should launch a takeover bid for Cadbury in September and, having sown up the deal a few days ago, hire Minick-Scokalo to mastermind the brands’ integration from March 1. Whatever else may be wrong with the corporate “merger” (Warren Buffett is the expert on that matter, not me) integration of the two confectionery operations in Europe looks like an obvious fit. Cadbury, outside the chocolate-gobbling UK, is a patchwork quilt in need of further rationalisation; Kraft, on the other hand, already has strong Euro brands in Milka, Toblerone and Terry’s.

I do hope the senior managers who stay on at Cadbury (the top three having already quit) were nice to Minick-Scokalo before she left. Ignasi Ricou, who succeeded Minick-Scokalo as Cadbury president of Europe, and Phil Rumbol, UK marketing director, will no doubt be polishing their CVs just in case.

I imagine she will also have a hugely enhanced fan club in the marketing services world. Ogilvy, for example, handles the Toblerone brand and JWT does Kraft corporate advertising. Fallon need not lose all hope, however. Minick-Scokalo championed the ‘Gorilla’ advertising campaign.


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