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.

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Supermarkets should remember the consequences of the Perrier scandal

February 18, 2013

Malcolm WalkerDuring the early part of 1990, health officials in North Carolina, USA, made an alarming discovery. Some Perrier bottled mineral water, whose purity was so legendary they had used it to benchmark other water supplies, was found to be contaminated with minute traces of benzene.

Benzene is a natural component of crude oil. Ingested in sufficient quantities, it can cause cancer in humans. Of course, there was no question of that happening in North Carolina. As a Federal Food and Drug Administration official drily observed at the time: “At these levels there is no immediate hazard. Over many years, if you consumed about 16 fluid ounces a day, your lifetime risk of cancer might increase by one in a million, which we consider a negligible risk.”

But no one was listening to the FDA’s voice of reason. Panic broke out all over the USA – and not just there. Perrier, at that time world leader in the mineral water category, was obliged to withdraw its entire global inventory of 160 million bottles. Brand integrity was further compromised by the discovery that the “natural” bubbles in the bottled potion were actually added back later. Perrier never fully recovered: it lost its leadership and became just another branded mineral water, albeit still a famous French one. Commercially, the crisis was if anything even more disastrous. The independent Perrier bottled water company was, within two years, sold to Nestlé.

I think you know where I’m leading with this. Fast-forward 23 years, to a full-page ad that appeared in yesterday’s national newspapers. It was inserted by Malcolm Walker, founder and chief executive of  leading UK food retailer Iceland. Its purpose was to divert responsibility for the horse meat scandal now engulfing our supermarkets by pointing the finger of blame at cheapskate procurement in local government, the National Health Service – and its equally unscrupulous counterpart in the catering industry – which has connived at bringing down processed food costs to their lowest possible denominator. Doubtless, judging from the ensuing squawks of indignation, the Iceland boss has a point – though how exactly his tirade exonerates the supermarkets from their own ruthless manipulation of supplier lines is not entirely clear. However, Walker does not stop there. Having scored some points on behalf of his sector, he then goes on to trash it by adopting a “holier than thou” approach:

“Iceland does not sell cheap food. We sell high-quality own label frozen food that is good value. We do not sell – and never sold – ‘white pack’ economy products.” Unlike, he carefully does not add, Tesco and Asda. And, just to ram the point home, he goes on to claim that “no horse meat has ever been found in an Iceland product”.

Well, almost none. At the bottom of the ad there is a mealy-mouthed admission that 0.1% of equine DNA was indeed found in two Iceland Quarter Pound burgers. But these don’t count, because the test, carried out by the Food Safety Authority of Ireland, was not an “accredited” one, and the discovered traces of horse were “well below the current accepted threshold level” of 1%. So, yaboo sucks to any critics.

Nice one, Malcolm. You’ve managed to spread, or at least smear, the blame far and wide, and thrown into the processor just a hint of xenophobia. Ireland, Romania, France – these horse-eating monkeys, they’re not like us – not to be trusted, whatever their professions of rigorously adhering to EU-wide standards. But, leaving aside the lowly populism of his message, Walker, in waxing eloquent about the infinitesimal amount of contamination in his own burgers, has committed a revealing tactical blunder.

Perrier logoThe current food scandal is not about parts per billion contaminants found in horse meat; it’s about trust in the brand. Just like the benzene found in Perrier all those years ago, consumers would have to ingest an awful lot of horse burger infected with “bute” equine painkiller (over 500 250 gram ones, to be precise) before experiencing any appreciable side effect. But that won’t prevent them passing summary judgement on those august brands – at the head of the supply chain – that have allowed this scandal to happen: namely the UK grocery multiples.

Possibly with devastating consequences for future sales.

One interesting aspect of this scandal is that its ramifications have now moved on from cheap lines of processed meat – in short, “poor people” – to ready-made meals. In the other words, the sort of thing consumed by affluent and articulate members of the middle-class. That’s bad news even for elite purveyors, such as Waitrose and M&S.

In all probability there’s nothing to worry about. But that’s not the point, is it? My local butcher tells me business has gone gang-busters over the past couple of weeks. And for good reason. In the past, there was a perception (false, as it happens, in many cases) that local businesses could not match supermarket fresh meat prices. Now, understandably, people seem a lot more concerned about local provenance. If you must have lasagne, it’s as well to see the meat being minced while you wait, rather than trusting the word of some supermarket about the integrity of its supply line.



Branston deal a reminder of what a pickle Premier Foods has got itself into

October 31, 2012

Old food brands don’t die, they just get traded away. The latest to fall under the auctioneer’s hammer is Branston – sweet pickle, but also ketchup, mayonnaise and salad cream – which has been knocked down to Japanese relishes specialist Mizkan for £92.5m. It’s the second deal Premier Foods has done with Mizkan. Earlier this year, Premier sold its Haywards pickles business and Sarson’s vinegar brand to the privately-owned Japanese company for £41m.

Not so long ago, Premier was being billed as Britain’s biggest (indigenous) food company. That reputation has long gone, as the company struggles to placate an increasingly disenchanted City with a seemingly endless series of disposals aimed at tackling massive over-leverage (it borrowed far too much in the good years) and a burgeoning pension liability.

The finance boys, not to mention Premier’s new(ish) broom chief executive Michael Clarke (formerly Kraft Food Euro chief), are so chuffed at being ahead of schedule in reducing the debt mountain that they seem to have forgotten what the company is supposed to be about.

These days, the only media ripple Premier manages to make is when it announces yet another fire-sale. Last December it was Brookes Avana, its loss-making chilled food business, sold for £30m. Earlier in 2011, it canning business went to Princes (now part of Mitsubishi) for £182m, and before that, the meat-free business – commonly known as Quorn – for £205m.

In fact, so many brands have disappeared from the portfolio in the past few years that people must wonder what – if anything apart from trying to make money – the Premier umbrella brand stands for these days. Remember Gale’s Honey? Robertson’s Jam? Hartley’s? Chiver’s? Typhoo Tea? All once UK household names – now long since divested.

And more disposals are on the way. Bird’s Custard, for example. And even – if the price is right – the Premier bread business; that’s Hovis to you and me. Which, if I remember rightly, was the jewel in the crown when Premier acquired the old Ranks Hovis McDougall business back in 2007.

The talk in the boardroom is of scaling back to the unassailable fortress of Premier’s so-called “Power Brands”, of which Hovis is currently one (yes, that unassailable). The others are Mr Kipling, Ambrosia, Sharwood’s, Loyd Grossman, Oxo, Bisto, and Batchelors.

To the untutored eye, there’s nothing very “unassailable” about any of these, either. The Loyd Grossman business is unlikely to much outlive the celebrity of its founder. As for Bisto, Batchelors, Mr Kipling and Ambrosia, they are in – or moving towards – the brand museum category: famous items in the pantry a generation ago, but now confined to a dubious ranking on the health traffic light scheme featuring in your local supermarket.

Unilever and the likes of Néstlé, Kraft, Campbell’s and RHM saw the dismal future awaiting such brands long ago, which is why they first cut off marketing support and then disposed of them. Scavenging such brands may have made sense while borrowing costs were no object; and while the supermarkets were prepared to offer them a reasonable amount of shelf space. But they aren’t any more.

For these reasons, a big question mark hangs over Premier, its “Power Brands”, and the continuing viability of its business model.


Big is beastly, especially if we’re talking big banks like Barclays

August 28, 2012

Which brands make us most angry? Yes, you guessed correctly. The big ones that rip us off, starve us of mortgage funds, pilfer our savings and behave with amoral disregard for everyone’s interest but their own. Anything, in short, that ends with the word “Bank”.

But come, let’s be a bit more specific. How about some brand differentiation – which is the worst, and which the runner-up? Well, coming in at number 2 – just behind the winning “All banks” category – is Barclays. And next, in 7th position, is Royal Bank of Scotland.

I know all of this thanks to some research, just out, conducted by YouGov and commissioned by creative agency Johnny Fearless (of which more below).

Why don’t Lloyds, Santander and HSBC make it into the top 10? Surely not on account of the odour of sanctity. We can only speculate, but could it be that Barclays and RBS have the two biggest Swinging Dicks attached to their brand heritage, namely Bob Diamond and Fred the Shred? I doubt that most people know who Antonio Horta-Osario is, and would struggle to recall his name in sufficient detail if they did. Which is probably just as well for Horta-Osario and Lloyds Bank.

More interesting, if perplexing in some ways, is the identity of the other 7 members of this exclusive Top 10 club. Tenth equal with Coca-Cola is Nestlé – still regarded as a corporate pariah on account of its anti-social baby-milk marketing practices in developing countries. I’m sure that doesn’t depress sales of Kit-Kats and Yorkie bars one bit, though.

And what’s Coke doing in there? Sorry boys and girls, for all your tender investment in clean athleticism, those grubby practices in Third World countries have not gone unnoticed.

Next up, “All utilities companies” at number 8, on account of their high prices and perceived profiteering. But two deserving special mentions here are British Gas – with its conspicuously bad customer service; and BT – with its ineffectual overseas call centres.

Virgin Media is in there at number 8 as well, although I have yet to discover whether this is because we’re all being beastly to Beardie or on account of some graver underlying cause – such as woefully inadequate service.

That leaves us with McDonald’s at number 4 – poor quality food and an inappropriate Olympics sponsorship, apparently.

…And, weighing in at number 3, the nation’s unfavourite retailer – Tesco. Memo to Tesco CEO Phil Clarke: it’s because you’re too big for your boots, despoil our high streets and blackmail your suppliers. No other retailer can do this so successfully, it seems.

  1. Which companies or brands make you feel angry? 
  2. What is it they do to make you feel angry?
Rank Company or brand
1 All banks’, ‘Banks’
2 Barclays
3 Tesco
4 McDonald’s
5 BT
6 British Gas
7 Royal Bank of Scotland’, ‘RBS’
8= Virgin Media
8= Utilities’, ‘Energy companies’
10= Nestlé
10= Coca-Cola

The research was commissioned by Johnny Fearless and carried out by YouGov. Total sample size was 2077 adults. Fieldwork was undertaken between August 3-6th 2012. The figures have been weighted and are representative of all UK adults (aged 18+).

Johnny Fearless is a Soho start-up agency founded by Paul Domenet and Neil Hughston, whose stock in trade is creating “social crackle” around brand messages. Or so it says in their publicity blurb.


Nick Brien heads for McCann exit. But who would wish to step into his shoes?

March 16, 2012

Word reaches me that Nick Brien, chief executive officer of Interpublic Group’s troubled leviathan McCann Worldgroup, will be stepping down very shortly. Possibly within a few weeks.

The size of Brien’s no doubt handsome severance package is likely to remain a mystery, the reason for his departure less so.

McCann has, in recent years, been a slow-motion accident gradually picking up speed. The traditional banker of Interpublic, accounting for 30% of group revenue (according to the Wall Street Journal), it was once a licence to print money on account of 5 foundation global clients. These were: Unilever, Exxon Mobil, Nestlé, L’Oréal and General Motors. More recently it has come to rely upon Microsoft as well. Here’s the recent tally:

Unilever (mostly Walls) has long gone, and the souring of the relationship can hardly be blamed upon Brien (even though the last bit of media did leave in 2011). Less excusably, his 2-year tenure has coincided with serious difficulties afflicting the other five.

Nestlé? McCann lost the crown-jewels global Nescafé creative account (worth about $25m income annually) to Publicis Groupe. McCann had handled the vast majority of the business for several decades.

Exxon? Lost the $200m creative account (which went back to 1912) to BBDO after a year-long review completed late last year. Universal McCann, MRM and Momentum have, however, managed to cling on to media.

General Motors? McCann lost out in the recent contest for GM’s $3bn global media business (of which Universal McCann had a substantial chunk), and is still on tenterhooks over whether it has won, lost or drawn in a creative review of the worldwide Chevrolet business, which accounts for the bulk of GM adspend.

Did I mention the Microsoft débâcle? About a year ago, UM and Mediabrands lost more than half Microsoft’s global media business after a review which saw the $615m US business pass to Publicis’ Starcom MediaVest.

And so to L’Oréal – perhaps the single most important McCann relationship, accounting (I’m told) for about 20% of its operating profit. Brien made a fundamental wrong turn last year when he sought to shoehorn Maybelline into a standalone shop, Beauty Village, which was also to house L’Oréal’s main brands. Characteristically (for a former media man), he had spotted the cost benefits of ruthlessly streamlining the business. Equally characteristically, his critics would say, he showed almost zero client empathy in setting about the task. When L’Oréal’s ‘C Suite’ finally tumbled to what he was doing, they were apoplectic and nixed the whole project.

Worse, it would appear, is on the way for McCann. L’Oréal now seems poised to take a considerable amount of its creative work in house. From what I hear, it will drop one of its two global agencies. And given that Publicis is the Paris-based home team, currently rejoices in a better brand name and – in Digitas – a superior digital operation, who do you think that unlucky agency might be? Driving L’Oréal’s thinking, sources say, are potential cost savings of $50m a year.

An indication of the way the wind is blowing may be detected in the recent defection of McCann’s L’Oréal worldwide account director Aude Gandon, who joined Publicis Worldwide last month. Gandon was a Brien protegé. She was formerly managing director of Leo Burnett’s beauty, fashion and luxury division, Atelier-lb, and was brought into McCann shortly after Brien got the top job.

Hers is not the only departure. Note that Garry Neel, the GM brand leader at McCann is quitting (although he will stay on as a consultant). As is Matt Freeman, who was hired as chief global chief innovation officer and vice-chairman less than a year ago. Only last week, Cathy Saidiner, president of McCann LA since 2008 – and a key Nestlé contact – also quit, according to an AdWeek report which also carried a denial that Brien is about to step down.

Against all these losses, McCann under Brien has yet to nail a significant new business win. Sense a pattern, anyone?

Equally interesting, while on the subject of Brien’s imminent departure, is who might replace him. Who, now that Brett Gosper has quit, has sufficient stature within McCann? And if an external candidate, which first-rate suits would be prepared to risk their reputation in taking on such a vertiginous challenge? The ideal candidate might well be Andrew Robertson, BBDO Worldwide CEO (who has not so far landed that top Omnicom job he was rumoured to be angling for). But why would he want to go to McCann? Surely not for the money.

UPDATE 19/3/12: Another top level casualty: this time Tom Gruhler, global managing partner at McCann Worldgroup, who is heading off to Microsoft as vice-president of phone marketing. Gruhler, who joined McCann in 2003, oversaw a specialist technology and telecoms unit the agency was developing. Previously, he was point man on the Verizon account, but much of that defected to agency-of-the-moment McGarryBowen in 2010. There’s now an inescapable whiff of the Führer Bunker, April 1945, in the air.


Just Lovin’ It (Not) – Part 2. McDonald’s chokes on its social media initiative

January 26, 2012

When will brands with a corporate reputation problem finally realise that social media – whatever its siren attractions – is not for them?

Not yet, as evidenced by the so-called “McFail” initiative. Last week, McDonald’s (yes, the Brand the World Loves to Hate, see my earlier post), bought two “promoted tweets” – Twitter’s answer to generating advertising revenue. The aim, apparently, was to persuade McDonald’s customers – those presumably with an excess of serotonin in the bloodstream – to share their happy-clappy experiences with the world.

Surprise, surprise, the clickable Twitter “hashtag” McDStories was (all too easily) purloined by mischievous malcontents. Very soon, instead of reading about McNuggets like Grandma used to make them (not), we were subjected to tsunami-force tirades on alleged animal-welfare abuse, wage slavery, food poisoning induced by McD fare and graphic descriptions of the bodily symptoms that accompany it.

By about 1400 hours Eastern Seaboard Time, D-Day, Operation McDStories had been ignominiously aborted. “Within an hour, we saw that it wasn’t going as planned,” explained a baffled Rick Wion, McDonald’s US social media director. “It was negative enough that we set about a change of course.”

Too right, Rick: a 180 degree one, to avoid losing your job.

Before you ask what planet Rick and his McD chums live on, let me explain: it’s the same one inhabited by the folk at Dr Pepper (owner, Coca-Cola), Nestlé, Wendy’s and Qantas. All of these brands have, at various times, lived under the narcotic delusion that social media is a marcoms nirvana utterly divorced from the everyday travails of brand management – and experienced brutal cold-turkey on discovering it is not.

When they go well, social media campaigns are a dream: they inexpensively capture the zeitgeist. But the gains are purely tactical, while the reverses, however infrequent, tend to have asymmetrical, strategic consequences. Why? Because negative high-profile media coverage brings the feckless actions of Rick and people like him to the immediate attention of their CEOs, for all the wrong reasons. If McDonald’s chief Jim Skinner was previously unaware of Wion’s existence, he is no longer. #McDStories has, with one fell blow, managed to poleaxe Jim’s precious Good News story: burgeoning corporate growth in Q4. Not great for Rick’s career advancement, I suspect.


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