Agencies pick over Ewanick’s GM legacy

July 30, 2012

“He failed to meet the expectations that the company has for its employees,” said General Motors spokesman Greg Martin cryptically. That looks like being GM global marketing supremo Joel Ewanick’s epitaph. The marketing whirligig quit abruptly last weekend, after two years at the steering wheel of one of the world’s biggest car companies.

But just what did Martin mean by failed expectations? It appears that Ewanick fell down badly on the small print in the 5-year sponsorship deal he signed with Manchester United. Details remain sketchy, although they will undoubtedly emerge over time. Some financial liability is likely involved should GM fail to deliver on its side of the bargain; this seems to be what Ewanick ‘forgot’ to disclose to his superiors.

GM may be glad to see the back of him, but we hacks will miss Ewanick – with his uncanny ability to manufacture a headline. Here is the man who said ‘No’ to extortionate prime-time Super Bowl advertising; and put two-fingers up to Facebook – commercially speaking – just before it foundered in a very rocky public flotation. The Manchester United sponsorship was to be his masterly counter-coup: Ewanick bringing in the vibrant Old World (China and emerging markets included) to redress a marketing overspend in the tired old New.

Alas, attention to detail seems foreign to Ewanick’s nature. Now we shall never really know whether he was a marketing visionary with a bold grasp of the Big Picture, or simply a publicity-hungry megalomaniac revelling in world-renown.

What matters from here on in is the unpicking of Ewanick’s legacy. Hundreds of millions of dollars of revenue are at stake for the agencies that signed up to the Ewanick dream. Doubtless their lawyers are already assessing the strength of the contracts they co-signed with him. What now for Carat’s tenure of the $3bn global media account? And for Commonwealth, the complex advertising vehicle set up so that Goodby Silverstein and McCann Erickson could jointly service most of the global Chevy creative account? The holding companies of all three agencies – Aegis Group, Omnicom and Interpublic – have already made substantial investments in staffing up in and around Detroit to service the newly streamlined accounts.

Advertising relationships in the auto-industry have traditionally been very personality-driven. Despite a thick coating of metrics-speak in all their public utterances, this has been transcendentally true of Ewanick and his advertising coterie.

Goodby looks particularly vulnerable, given the close personal relationship between Ewanick and Goodby founder Jeff Goodby – who shared the stage at this year’s Cannes International Festival of Creativity.

All eyes will now be on Ewanick’s (at least temporary) successor, Alan Batey, head of US sales and service.

Little is known of him other than that he was once a car mechanic. But of one thing you can be certain. Agencies, on and off the GM roster, will be doing their damnedest to find out more. Just in case.

UPDATE 31/7/12: The problem with the Manchester United shirt sponsorship deal is that Ewanick paid too much, it has emerged. He committed to a 7-year deal at £25m ($39m) a year without disclosing how “full” the terms were to GM’s board. $300m represents a premium of 25% to what the current sponsor, AON, is paying – and is a lot more than Ewanick seems to have implied to his colleagues during negotiation.

Will GM’s Manchester United sponsorship deal shift more Chevies?

May 31, 2012

For years the auto industry has been asking: how long before the Vauxhall marque becomes Opel? Maybe the question now needs rephrasing: how long before Opel becomes Chevrolet?

Certainly Opel becoming – in the fullness of time – Chevrolet would be one logical outcome of the sponsorship deal its owner, General Motors, has just struck with British Premier League football club Manchester United.

But that’s just a side-light on a global marketing communications strategy that actually has very little to do with Europe, where Chevrolet accounts for only 1.5% of total car sales. Symbolically, the sponsorship agreement between GM and Manchester United has been inked in Shanghai. Recent research by Kantar found that over half of Man U’s estimated 659 million fans worldwide are to be found in emerging markets, such as the BRICS. That is exactly where GM is targeting most growth for its prime brand, Chevrolet.

All very fine, you may say. But isn’t this just another example of fame-hungry GM global marketing supremo Joel Ewanick grabbing the headlines? And a costly one too, which may not eventually stack up. After all, what traction does a British football club – even one whose brand has achieved substantial recognition in the rest of the world – have in the market where Chevy currently sells most of its 4.76 million units a year? Not that much really (despite Kantar’s projection of  a 35 million Man U following in the USA – who are these people?).

Some might go even further and claim Ewanick and GM are actually being unpatriotic. What this sponsorship deal is really about is cocking a snook at America’s prime sport, baseball: Ewanick has personally decided that Super Bowl ads are too expensive (at $3.4m for 30 seconds prime time, a not unreasonable point of view) and he’s perversely made his point by concluding  a deal with a sport that cannot have any discernible uplift on US sales in the immediate future. Nor is this an inexpensive gesture. Recent sponsorships deals with Man U have not exactly cost peanuts. In 2010, for example, the club struck an agreement with insurance firm Aon worth £80m ($125m) over 4 years.

There may of course be a grain of truth in these objections. Ewanick’s behaviour is clearly tactical as well as strategic in intent. It is designed, at one level, to bring the Super Bowl ratecard (and let’s throw in the Facebook ratecard while we’re there) to heel by demonstrating there is a marcoms alternative. But a tactic is exactly what it is. My betting is he cannot afford to boycott either platform in the longer run.

Watch out, there’s a Hytner about – Jim takes the helm at IPG’s Initiative

March 4, 2012

Interesting to see that Jim Hytner – whose career has more switchbacks to it than the mille miglia – is once more emerging triumphant from the quicksand of a career in marketing.

Hytner has just replaced long-serving Richard Beaven as worldwide chief executive of Interpublic Group subsidiary Initiative. Beaven (a surprisingly urbane man for the head of a media-buying house) has apparently left to spend more time with his passion for photography, an alternative vocation he says he has toyed with since childhood.

While none of this is to be doubted, we wonder whether he was also uncomfortably lodged in a career cul-de-sac. Beaven was once seen as a successor to Nick Brien when Brien left Mediabrands (the overarching arm of Interpublic’s media operations) to take on the top job at McCann Worldgroup. But the Mediabrands role instead went to Beaven’s chief rival at Universal McCann, Matt Seiler, who has been aggressively reorganising McCann’s media operations ever since.

Anyway, enter Jim. He’s relatively new to the world of media buying, having joined another IPG subsidiary, Universal McCann’s G14 (essentially the bits that aren’t America), as its boss only two years or so ago. Like Brien, he’s a Brit who has done rather well in the upper echelons of American-dominated McCann – the traditional breadbasket of Interpublic Group. There, however, the parallel ends. Where Brien is essentially a media services specialist who has made it into top agency management, Hytner’s much more colourful career has embraced the full ambit of marketing: he’s been an FMCG client; marketing director at some of Britain’s top television companies; client at one of Britain’s leading banks; a digital content wonk; and is now trying his hand – seemingly successfully – at the agency business.

The first thing to note about Jim is he is the youngest scion of a talented and very competitive family. All three Hytner brothers – the sons of a successful Manchester barrister – have set the bar high in their chosen fields. Nicholas, now Sir Nicholas, is the director of the National Theatre with such successes as the Madness of George III and The History Boys to his name. Richard, a lawyer by training and a Sloan Fellow of London Business School, is now deputy chairman of Saatchi & Saatchi Worldwide.

“Cheeky chappy” Jim, less cerebral than his two brothers (they went to Oxbridge; he went to a redbrick), gives every appearance of being a lot more entrepreneurial. Certainly the young Hytner was prepared to give anything a go. First, like his eldest brother, he tried to tread the boards, but this was trumped by a potential career as a chef de cuisine. The way he tells it, his attempts to follow in the footsteps of Marco Pierre White and Gordon Ramsay stopped dead one night, when thanks to a kitchen shift at the exclusive Miller House Hotel in the Lake District, he suddenly realised he was going to miss the 1985 FA Cup Final between Manchester United and Everton. To say that Jim is fanatical about Manchester United would be a considerable understatement. He (like more self-effacing elder brother Richard – though I’m not so sure of Sir Nick’s views on this subject) eats, lives and breathes the club’s highs and lows. “It’s the one final I’ve ever missed in my whole life, so I thought I can’t be doing with this hotel lark,” he tells us. Haute cuisine‘s loss was marketing’s or, more specifically, Kraft’s gain.

To this day, football analogies are never long absent from Jim’s utterances. And, in truth, it is a passion that has stood his career in good stead in the laddish, sports-mad environments of Sky TV, ITV – where he was marketing director – and (dare I mention it?) media buying circles. Though what Americans make of all this “soccer” talk, I have no idea.

Will Jim ever reach the top – conceivably, in time, replacing Brien? Over the years, Hytner’s maverick antics have made him a rather endearing fixture of the UK marketing scene. But they have also raised questions about his gravitas. This, after all, was the man who dreamt up those infamous idents of celeb TV personality Keith Chegwin in the nude when he was marketing director of Channel 5. What Jim may choose to call “brave” others in the industry characterise as controversy for the sake of controversy. He did something to allay this enfant terrible reputation during a (comparatively sober) stint as UK marketing director of Barclays Bank. But it remains to be seen whether he has mellowed sufficiently in his middle years…

Martin George: guilty until proven innocent

May 11, 2010

With one farce playing on at Whitehall, it’s easy to overlook another at Southwark Crown Court that flopped almost instantly.

“Ludicrous”, “disgraceful”, “shabby”, “cynical” were  some of the kinder epiphets being showered upon it by the critics – most of them in the legal profession. Yes, I’m talking about the Office of Fair Trading’s case against four BA executives for alleged price-fixing. After four years of painstaking preparation, the trial collapsed before a single witness took the stand; inexplicably, the prosecution had sat upon email evidence that immediately exonerated the defendants from any suggestion of conspiracy.

No doubt heads should roll – those of John Fingleton at the OFT and Steve Ridgway at Virgin Atlantic come to mind; yet it is the heads already lying in the blood-stained sawdust which are my main concern here. And one in particular, that of Martin George, formerly commercial director of BA: judged guilty before he was proved innocent.

There was a time when reputations in marketing didn’t come any higher than George’s. The mild-mannered, aimiable executive constantly topped surveys of the great and good in marketing. And rightly so. He was, after all, in charge of one our most vibrant brands (I’m talking about quite a few years ago) and was one of the few marketing directors who had made it onto the board of an FTSE 100 company. Capping it all, he looked chief executive material. Only narrowly was he pipped to the top post at BA by former pilot Willie Walsh in 2005.

But it was downhill fast after that. Once details began to emerge the following year of an alleged conspiracy to fix aviation fuel price surcharges – thanks to Virgin turning whistleblower – George was barely able to hold down a proper job. Who would, with maybe a five-year prison sentence hanging over them? Hounded out of BA later that year, he applied unsuccessfully for the Manchester United commercial role (filled, briefly, by ex-Saatchi ceo Lee Daley) and has since had to content himself with the role of interim group marketing director at BUPA (where he still is), and whatever below-the-radar consultancy tasks have come his way. Nothing, I imagine, within the range of the £450,000 or so a year he earned at BA.

George, like the three other defendants, has always maintained his innocence, although he did take responsibility for his department’s actions. Here’s what he said on resigning from BA:

“I now recognise that within my department, there may have been inappropriate conversations in violation of company policy in relation to long-haul fuel surcharges. I was not involved in such conversations. Although the board of BA have not found that I have behaved in a dishonest way, I fully recognise my responsibilities as head of department and as a board director.”

Time has proved George was right to maintain his innocence – but at what a cost. Ridgway, by contrast, now finds himself in an interesting situation. By whistleblowing to the OFT he implicitly admitted criminal dishonesty in order to save his own skin – even if that meant landing someone else in jail.

With the case blowing up in his face like this, his position is surely untenable. The 70,000 emails that Virgin has so mysteriously rediscovered – if they do nothing else – fundamentally undermine any conspiracy theory. They establish that Virgin had previously, and unilaterally, determined to raise the fuel price surcharge to what turned out to be the same level as BA’s.

Even speculatively, the notion of a cartel looks pretty flimsy. Why would BA and Virgin bother in the first place? Fuel surcharges are a minor part of the ticket price. And, as one of the counsels for the defence has pointed out, BA and Virgin competed on no more than 20 of BA’s 219 routes at the time. Only on three of these routes – Orlando, Grenada and Trinidad – was there no other competition. Now that hard contradictory evidence has come to light, the trial looks like a stitch-up which relied on witnesses with an agenda.

I’ll leave you with the words of George’s counsel, Clare Montgomery QC: “The world has turned upside down. If you say you are honest in making an agreement, then you may go to prison. If you say you did nothing wrong, then you’re at risk of being charged. But if you say you were dishonest, then you and your company will not be punished, you will keep your job.”

I wonder where that leaves Martin George and his career prospects?

How Brett and Lee won the Olympics for McCann

May 1, 2009

A lot of people must be asking, how on earth did ill-favoured  McCann Erickson manage to beat the mighty WPP to Locog’s prestigious 2012 Olympics advertising account? Not least among them, Sir Martin Sorrell, WPP’s nettled chief executive.

The short answer is: Brett Gosper, McCann Worldgroup EMEA president and his secret weapon, Lee Daley.
It can be no coincidence that, weeks after McCann Worldgroup appointed the somewhat tarnished, but nevertheless clever, former Saatchi & Saatchi chief executive to the newly created role of EMEA chief strategist (reporting directly to Gosper), McCann walks away with the Olympics prize.
Another non-coincidence is Gosper’s familiarity with the workings of Olympics committees. He happens to be the son of Richard Kevan Gosper. Ring a bell? Then I’ll refresh your memory. Gosper senior is a former Australian athlete of some renown, and more to the point, a former IOC vice-president of 20 years standing at the venerable body which holds supreme sway over the Olympic Games.
Just for the record, Kevan – as he prefers to be called  – won an Olympics silver medal for the men’s 400m relay in 1956, and managed to take in being Shell chief executive and chairman Down Under during his long and successful career. So he’s not lacking influential political connections. He’s practically a national hero. What you might call Gosper junior’s inside track, in fact.
One other non-coincidence is Daley’s own brief and colourful connection with high octane sport. Remember his four-month stint at Manchester United? He’d probably rather you didn’t. But by the law of unintended consequences, it has served him well in the end.

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