The End of The Affair
Just like marriage, when a long-term relationship between an agency and client ends in divorce, speculation as to the causes behind the split run riot but quite often even the partners themselves don't know exactly what went wrong. Boredom, complacency, temptation of a third party, breakdown in communications, breach of trust, or a realisation that they should never have tied the knot in the first place, are all factors that can play a part.
Despite frequent divorces, long-term unions are fundamental to the business of creating powerful marketing and advertising. Or are they? Will long-term monogamous relationships continue as the mainstay of the ad industry or is promiscuity - experimental brief flings with various ‘creative' partners across a gamut of marketing and media disciplines- destined to become the new way forward? Tim Parkinson, marketing director, Nike Singapore, believes the old model just doesn't do it for the brand anymore. Nike shocked the industry in March when it announced a move to take its running shoe account away from Wieden & Kennedy, its founding creative partner of 20 years and authors of Nike's ‘Just Do It' tagline.
Parkinson doesn't think the traditional monogamous model will be around for much longer, unless agencies evolve "to meet the new dynamics of the consumer".
"For a brand like Nike, we need to consistently take the consumer somewhere new and to invest our stories with unmatched creativity. So we have moved our model of, for want of a better phrase, "commercial farming" - tilling the same land over and over again - to "hunting and gathering". We need to seek story-tellers with different eclectic skill sets and as a result now have a portfolio of partners that range from design agencies, new media companies, film makers, DJs, performance artists (and yes, advertising agencies) and more."
Although top agencies have seen their power, influence and profitability diminish over the past two decades, few industry professionals would find it easy to swallow a comparison of their services with a DJ or even a performance artist. But maybe this is a glimpse of the future.
When Singapore Airlines recently reviewed its account after 35 years with Batey Ads, the agency that created the Singapore Girl, probably Asia's only iconic piece of advertising to date, the move was viewed by many as the end of the beginning. But maybe it is in fact the beginning of the end for fidelity and longevity in Singapore brand-land.
SIA was quick to assure customers that the Singapore Girl as the ‘personification of the service customers expect' will stay and that it is looking for long-term positioning of the airline as "the brand for air travel now and the next 10 years."
The appointment of TBWA as its new brand guardian consolidates most of its business with Omnicom (subsidiary Tequila handles its Krisflyer account). But what are the odds that this second marriage will have as long a tenure as the first? Is that even possible in today's business climate? According to Goh Shu Fen of pitch consultancy firm R3, which managed the SIA agency review, short-termism is currently where it's at in Asian advertising.
"According to an R3 survey in 2006, average length of a client relationship in Asia is 2.4 years, compared to the US and Europe where the average is 6.5 years."
The pressures, and excuses, for shopping around and trying new marketing partners are increasing at both the macro and micro levels. The opportunities and challenges of new media are cited by many clients as reasons to review previously stable long-term relationships, not only at Nike. Digital capabilities was know to be a priority for SIA which is looking to new media to help increase sales on a total budget that will fall in real terms over the next decade.
The Sarbanes-Oxley act has also made its presence felt. Known as the public company accounting reform and investor protection act of 2002, this US federal law was passed in response to the huge accountancy scandals of Enron and Worldcom, and has increased attention to procurement disciplines inside international client companies.
Publicis Asia Pacific chief operating officer Matthew Godfrey explains that the revised law has changed client behaviour towards agencies.
"It is now seen as good corporate practice to review major contracts on a regular basis and check market rates. This does not necessarily mean change but it does mean regular evaluation."
Singapore's price-sensitive, low-budget, highly competitive agency scene is a buyer's market and many clients constantly trawl for cheaper prices and better deals, rather than better advertising. According to R3, almost 30% of clients work with agencies on a project basis "a symptom of short-term-thinking as well as the concubine syndrome".
Richard Johnson, executive creative director of M&C Saatchi Singapore, agrees that the client agency relationship is evolving.
"With the segmentation of marketing, advertising agencies have been pushed down the food chain. There are less board-level relationships; it doesn't go as deep as it used to. I don't necessarily have a problem with that and I like project work but the level of trust with a client won't build up and only with that trust can the work bear fruit."
The danger, asserts Johnson, is that in this scenario, brand building is "probably impossible", a view that's echoed by agencies big and small.
Michael Liew, managing partner of home-grown agency, The Alchemy Partnership, now in its second year, says, "It takes time to build a brand. To build a brand you need a deep understanding of the business behind it as well as the courage to stay the course you have chosen. You need time to achieve both."
The strength of the SIA brand is directly linked to the length and strength of its former relationship with Batey Ads, according to Liew, who like many of his contemporaries learned his trade hands-on at the tough Batey ‘school of advertising'. He described that marriage as "a real testament to the agency that Ian Batey built - he relentlessly stayed the course. He made people do more in and out of the box".
For clients who believe in the value of brands, long-term relationships are as relevant today as ever, according to Publicis Worldwide chief operating officer Richard Pinder, who reckons the minimum time to establish a true partnership is three years.
"Look at clients with powerful brands. They are the ones who have stayed with an agency rather than shopped around. The clients who stay with an agency have better brand values and higher brand values. Look at Kellogg's Cornflakes, a stayer, versus Weetabix, which changes agency every 10 months. Who is the strongest? Even in retail I struggle to believe that a client gains any benefit by constantly changing agencies. To clients who keep changing I say they really need to decide what they are looking for. If it's new ideas they want, then hold a competition and pay for them."
Ogilvy & Mather Singapore group chairman Steve Mangham doesn't see a "surge of volatility" and increase in client promiscuity in the local market, but then he is blessed with notoriously faithful - up till now - multi-national clients like American Express, IBM, Nestle and Unilever. He defines long-term as 10 years or more, and he thinks Singapore's marketers are no different from any other.
"There are companies that buy into the belief that brand-building is a long-term thing, and companies who don't see the benefits and don't believe you need to be close to your agency. Like any other relationship, it takes time to get to know each other. The first year with a client is all about learning about each other and learning to work together. It takes an agency a while to get to grips with your brand, your business, your people and your culture."
Mangham believes that while the agency can do great work from the year one, it is only in year two or three, the second or third major campaign in a new relationship that the work really takes off.
Shakir Moin, country manager, F&N Coca-Cola Far East, agrees, "Great brands are built on long-term platforms. They must continuously build on their core and should maniacally focus on long-term pillars of growth. With that in perspective, all brand relationships must be built with the long-term in view. There is a lot of benefit in familiarity.. familiarity with brand history, DNA, relationships with consumers and drivers of growth. This is lost regularly and eventually eroded in promiscuous relationships."
Just as a marriage is for better and for worse, it is often when times are difficult that a long strong relationship reveals its true worth, according to some agencies and marketers.
Laura Ashton, senior vice president marketing, Asia Pacific, for Electrolux, says, "There is subtlety in all strategy and one of the great advantages of continuity of relationship - and by this I mean the people not just the agency shingle - is that the articulation of this strategy in changing times can become more precise and effective."
"The more developed the market, the greater the competitive environment. In developed markets, your advertising has to work harder to get your products pulled off shelf. Great client agency relationships can help create this competitive advantage," John Hadfield, managing director of BBH Singapore says.
BBH, whose famous founding clients Levis and Audi now celebrating 25 years with the agency, has just experienced the sharp end of short-termism Singapore-style. After a review that took six months, BBH scooped the prestigious Tiger beer account only to resign the account due to internal client divisions four months later.
Beside brand-building, what else does a long-term agency relationship give a client? According to R3, fidelity saves money and boosts return on investment, improves morale and efficiency. For most serious marketers, including well-know beer brands, an agency review is an upsetting, nerve-wracking, disruptive and costly process.
"In the US, an average pitch costs a company US$200,000 (S$302,800) in terms of man hours of their marketing and senior executives spent on the pitch process. In Asia we estimate the time costs to be over US$100,000 (S$151,400) but that is not calculating the down time and opportunity costs in transition," R3's Goh says.
There is no such thing as a free idea after all. R3 believes clients get the most ROI when they treat their agencies like employees, as an extended marketing department and advises clients that a longer term agency relationship based on performance is a more proven way to get value for money. Ultimately marketing remains a people business: good relationships need time to develop. Staff turnover at both agency and client impacts hugely on this in Singapore, and although brand managers move on average every 18 months in Europe, accounts don't. The key is to manage the relationship so it is not in the hands of a couple of people, agencies say.
Jacqueline Cheong, vice president, marketing communications, Asia Pacific, DHL Express, says, "At every level of our organisation we are connected to our particular agency, all the way up to senior management. The relationship is holistic, different people see things with different perspectives and the connections are broad and deep. When we sit down to talk, it's to find solutions, not point blame."
According to Cheong, as well as creating superior ideas, this kind of relationship solves the problems of employee turnover, personality clashes and the two potential downsides of long relationships, complacency and stale creative work. Most large agencies have rigorous annual reviews strategies to health check accounts as well as senior level pow wows, but sometimes love just isn't enough to stop a review being called for.
Darryl Lim, brand manager, Red Bull Energy Drink, says, "You have to work hard to keep a relationship fresh. One signal that agency is getting complacent is when the work is just an adaptation of past creative and the agency starts to believe that the brand can't live without them."
A dangerous attitude in any relationship and sure to end in tears. Ex-Batey regional CEO Rod Pullen agrees. Now a partner in Foo and Pullen, he believes long-term relationships ultimately fail because agencies forget what probably secured them the relationship in the first place. "To constantly innovate their work. Not just in the creative output but in all areas, including new media. A major advertising pitch is one of the most imaginative, creative and innovative practices on earth. It's like love at first sight, you'll do anything," he says.
‘Anything" being the operative word in today's fragmented market. To satisfy today's clients who have more choice than ever when it comes to marketing partners, agencies may need to think like mistresses and lovers as well as husbands and wives to keep long-term relationships relevant, exciting and preferred. Would the Singapore Girl have ended her affair with Batey if she'd been better serviced? Will she remain committed to long-term relationships or become a promiscuous flirt? Whatever the case, TBWA is sure to find out when the honeymoon is over.