Services: Green Square

Back in the summer, Q magazine closed. If you’re of a certain age, or have more than just a passing interest in music, you’ll remember Q in its pomp. It was launched in 1986, a product of the publisher EMAP’s can-do culture and devolved management style (of which more in just a second). Q’s decline was long and slow, but Q was revolutionary in its time; just as the CD was starting to take off, and record companies realised that they could make a great deal of money repackaging their back catalogues and heritage acts for the shiny new digital disc era, a couple of bright sparks at EMAP realised that this new musical normal needed its own magazine. Back in 1985, the music press was ruled by the “inkies” – weekly monochrome tabloid newspapers like Sounds, Melody Maker and NME, that were news-led, their content driven by release/touring schedules and the news cycle. There were colour mags, of course, but they were either aimed at teen poppers (Smash Hits) or had a lifestyle bent (The Face). Something different was required and Dave Hepworth and Mark Ellen came up with Q (as in “cue the music”) – a glossy, perfect bound, full-colour monthly mag that was perfect for the CD era. (and one you could bolt a CD mixtape to the front of to encourage take-up).  At once respectful and serious but also self-aware and slightly irreverent, Q featured artists like Paul McCartney, mocked (or ignored) by the inkies but who still had substantial fanbases; and – crucially for advertisers – these fans were slightly older, definitely more affluent and keen to replace battered old vinyl LPs with shiny compact discs. Q was massively successful and influential because it was the right product at the right time, executed in just the right way. But Q was only allowed to come into being because EMAP’s company culture permitted it. Beginning life as a regional publisher in the East Midlands just after WW2, the newly renamed East Midlands Allied Press started a magazine division, based – and this is a very EMAP thing – on a hunch; the company’s printing presses were often dormant, so why not make use of that capital? And so, Angling Times was born in 1953, followed by Motor Cycle News a couple of years later. EMAP’s leadership widely encouraged an entrepreneurial approach; different divisions were encouraged to come up with ideas, and to try them out. This led to hugely successful consumer and B2B titles such as Smash Hits, Q, Mojo, Heat, Car, Drapers Record, Red, Closer and dozens of computer and gaming magazines. EMAP’s swashbuckling approach and success even had an influence at its staid old rival, the “Ministry of Magazines”,  IPC: a young editor named James Brown was given carte blanche by the management and he developed Loaded – a mag that was as successful and influential in the 1990s as The Face and Q had been in the ‘80s. EMAP (“Every meeting a party”, said employees at envious rivals) expanded rapidly in the 1980s and 1990s, buying titles (including a small indie men’s grooming mag called For Him, relaunching it as FHM, which sold 850,000 copies a month in its prime) and launching others. It also saw the opportunities in commercial radio, picking up still-successful stations such as Kiss and Magic for a song. As it grew, it became more cautious – simply repeating successful and proven formulae, rather than trying new things – and centralising management. EMAP’s titles – especially generalist ones, or the publications tied into crazes, such as Zoo or FHM (“lads’ mags”)  – were badly affected by the structural disruption that wreaked circulation and ad revenue havoc in the industry in the noughties and 2010s; but increasing caution meant EMAP started to look increasingly flat-footed. In fact, for many an ambitious creative company – from publishing, music labels and A&R, through to TV and film production – encouraging a decentralised, entrepreneurial, gut feeling approach has served them well. And this of course is also true of advertising and marketing – it’s why ambitious creatives, suits and planners are willing to forgo the comforts of big agency life to take risks by joining a startup or a swashbuckling indie, and why investors are keen to pour cash into these feisty minnows. Ask anyone of a creative mindset – in any industry – what matters to them most, and they’ll talk about stuff like autonomy, freedom, unrestricted thinking, the chance to have one’s ideas taken seriously, being listened to, adventurousness, the embrace of risk and of the different, flat hierarchies, light-touch management and the ability to act quickly. Big pensions, a company car and a chance to climb the management ladder matter much less. Now I mention all this because, as we know, the marcomms industry has been going through a period of transition: first because of the evolving needs and demands of clients and of consumers; then because of the disruption wrought by digital; and now because of the Covid-19 pandemic. Interestingly, on a macro level, one of the features of the coronavirus outbreak here in the UK have been the calls for more autonomy. Central government’s responses have proved to be unpopular and largely ineffective, and the calls for policy decisions to be devolved to a more local level have become louder, not just in the UK’s four nations, but within England too. Just look at the scrap brewing between Manchester’s Andy Burnham and the Government regarding moving to Tier3 as I type. In fact, as the pandemic unfolds and develops, I believe that decentralisation generally will be an important feature of our world – not just because so many white-collar workers will be based at home rather than the office, but because new outbreaks or flare-ups will require rapid thinking, with solutions tailored to local conditions. We may also find ourselves more geographically confined than we have done for decades – look at the mothballing of out-of-town shopping malls and retail parks and the rise of local shops. And brands and their agencies will have to adapt too. A one-size-fits-all approach is probably no longer fit for purpose. So, a global brand will need to adapt its messages according to the territory – you can’t speak to a locked down infection hot-spot in the same way you would a Covid-free zone. Similarly, a message could become out-of-date, tasteless or downright offensive in a matter of days. This means that agencies will have more work to do. Instead of just taking a global ad dreamt up in Beijing, New York or London and adapting it for local language and culture, local shops will have a bigger, tactical role (maybe even strategic too). And they’ll have to make sure they can react and work quickly. Inevitably this will suit smaller agencies with flatter and more responsive management rather than big global agencies with layers of approval to work through. So, the big boys will have to learn to let go; management will have to learn to delegate and trust more. They say that advertising is all about changing behaviour and solving problems – and if there is a time when these two skillsets will be needed more than ever, it is now. It seems to me that the time for long-term thinking or grand strategy is, temporarily at least, over. While playing the long game (or at least having an eye on it) is always desirable, survival, speed of response and quickly seizing opportunities and taking risks are where it’s at in the time of coronavirus. This leaves big legacy agencies, and the holding companies – WPP, IPG, Omnicom, Publicis, and Dentsu that own them in a tricky spot. If they are to have any value (both socially and for shareholders) they are going to effectively have to become invisible. They are going to have to let go, devolve and massively slim down their central functions. This will require trusting in the creatives and suits on the ground, moving fast and encouraging risk and innovation. In this pandemic, we are increasingly learning that the old ways of doing things aren’t working. Thinking differently, trusting in the “crazy ones” (as the famous old Apple ad campaign of the late 1990s was wont to say), and having balls of steel is what’s needed now, in 2020 and beyond. Who’s up for the challenge?

Advertising is, they say, a people business: Saatchi & Saatchi; J Walter Thompson; Ogilvy & Mather; Abbot Mead Vickers; Doyle, Dane Bernbach. Historically it was all about the name(s) on the door. Many ad agencies were built in the image of one man – back then sadly they were always men – or a couple of men. The founder or dominant partner’s DNA, his principles and idiosyncrasies, informed how the agency behaved, the kind of people it hired, the clients it went after. Of all the great old agencies, Ogilvy (formerly Ogilvy & Mather) is perhaps most closely associated with one man, its founder, David Ogilvy (1911-1999). Those who knew him tell me that he was a brilliant, if sometimes infuriating, man – tall, imposing, charismatic; a dazzling storyteller; a born showman not above burnishing stories if necessary; a superb copywriter; a snob; a great boss; a dispenser of bon mots… The great man founded the agency that bears his name back in 1948. His client books and early campaigns – for Dove, Schweppes, Rolls-Royce, Hathaway shirts – were a reflection of the kind of man he was. Singular, distinctive, a little eccentric maybe, but almost fanatically informed by careful research, and always gentlemanly. O&M went public in the 1960s – it was the first big agency to do so – and Ogilvy’s influence waned after he retreated to his French chateau and as he aged and as the shareholders took over. He wasn’t above making his feelings known or dropping in on the shop he founded, of course. He famously called Martin Sorrell “an odious little shit” in 1989 when the latter’s WPP group took over the old lady of Bettenham House in a daring $864m acquisition. Although Ogilvy later apologised and the two men were reconciled, the WPP takeover ended Ogilvy’s influence at the agency. While his spirit was always there, kept alive by veterans who’d known him and worked for him, O&M effectively became ‘just another agency’, albeit one of the marcomms world’s most prestigious brands. Since the 1990s, the agency has been through a number of global chief executives, all of them different, but all of them longstanding O&M employees. Whether these bosses had a greater influence over the look, shape and behaviour of the agency than Sir Martin Sorrell is perhaps an argument for another day, but all of them had some sort of link with David Ogilvy and O&M’s past. But this week Ogilvy (or, we should say, WPP) did something rather different. It appointed Andy Main, global head of Deloitte Digital and a principal at Deloitte Consulting, as its next chief executive. Main replaces John Seifert, who has worked at O&M since 1979 – a decade before the WPP takeover – and who has been chief executive for the past four years. Seifert stepping down isn’t a surprise (he’d announced his retirement back in April) but the timing is (Seifert originally said he would be stepping down next year), and so is the new boss, who will join next month to begin what management types call “a leadership transition”. So, who is Andy Main? This is what we know so far. A Scot who attended the University of Edinburgh, he’s spent 21 years at consultancy giant Deloitte, with the last six spent running its agency operation Deloitte Digital from Denver, Colorado. He is based in the US, and it’s not clear whether he will run the network from New York or London. You may have heard his name before – under his leadership, Deloitte Digital made the first significant move by consultancies into creative services, snapping up the likes of Acne and Heat. Talking earlier in the week to Ogilvy and WPP veterans and industry observers, two viewpoints are emerging. For the suits, and from a WPP perspective, this is seen as a good move. Main is highly rated, and WPP’s ability to hire an outsider of his stature is seen as both a coup and a tonic for the holding company, which has watched its fortunes slump since 2017. Mark Read, chief executive of WPP since 2017 (he replaced Sorrell), who led the search, told the trade press: “I was looking for someone who could have respect for Ogilvy’s creative business but also someone who could develop a future vision to help transform Ogilvy’s clients’ businesses.” It turns out that Main also knows WPP and was invited to speak in his Deloitte Digital capacity at a private WPP strategy day in September 2017. The new boss spoke to 50 or 60 senior Ogilvy executives by video earlier this week, ahead of the public announcement, and an insider said they were “excited” about the new CEO. But another (not entirely impartial) Ogilvy watcher told me that the agency’s creative community might not be so welcoming. “Creatives and management consultants do not always regard each other with much respect… there may be antagonism and cynicism, both inside and outside the agency”, he told me. “People will ask: ‘What are his creative credentials?’ But time will tell. You’ve got to applaud WPP for trying something different.” So what will Main do? Given his background, his agenda is likely to be “modernising” Ogilvy, with a big emphasis on technology. What about creativity, an ill-defined term that, despite the importance of tech and consulting, is still essential to any marketing shop’s success? I’m going to give him the benefit of the doubt and say that when you look at what he has said previously and the acquisitions he made at Deloitte – principally Heat – he does seem to acknowledge the role of creativity. “Andy Main is one of our industry’s most admired leaders”, Read said in a statement. “He has demonstrated the effectiveness of blending creative, technology and consulting services. His belief in the power of creativity to transform businesses and the importance of people and culture in organisations aligns closely with our vision for WPP and our agencies.” And Seifert added: “Andy’s personal and professional experience could not be more relevant for the ongoing transformation of Ogilvy and WPP at a moment of extraordinary change and opportunity in our industry.” Like all industry leaders in the current climate, Main will have to address two major current issues: the fallout from the Covid-19 pandemic and the Black Lives Matter movement. But in the longer term, Main will also have to restore the agency’s reputation for creative excellence. Although Ogilvy still has one of the most enviable client books in the business – BP, IBM, Unilever, Vodafone and Walgreens Boots – and much of its work has been good and very occasionally great, it is no longer the force it was in the 1950s-80s and even into the 1990s. This means he’ll have to work hard to overcome the cynics and those wary of his background, both inside the agency and out. Winning over clients should be unproblematic given his background and track record – but if he is to really succeed he’ll need to attract and retain the very best creative talent, nurture it, protect it and give it freedom. Not an easy task when you have a big holding company and its shareholders to please. After years of tinkering, Ogilvy/WPP has acted decisively, broken the mould and chosen an outsider – the agency needed to do things differently if it is to survive and prosper in an era of disruption and crisis. But at the same time, Main must remember his new agency’s great founder, understand his creative and managerial legacy, and adapt it for this century while still retaining its distinctive DNA. No easy task. It’s way too early to pass judgement, of course, but I wish him luck – and, I suspect, will many others. An Ogilvy restored to true greatness will be good for the industry, as well as for WPP shareholders. Read more

Pre-lockdown there was already a strong case for companies to lead their strategy with digital and tech-driven activity, and the Covid-19 pandemic has only served to accelerate this. Green Square’s Barry Dudley weighs in on how companies can plan for the long-term in light of this, by finding an ‘ology’ of their own. For those of my generation, you will remember the much-loved ads for BT back in the 1980s and 90s. I’m talking about the campaign that featured Maureen Lipman as Beattie, an archetypal grandmother using BT landlines (remember those?) to keep in touch with family and friends. Perhaps the most memorable of these was when Beattie phoned her grandson, enquiring after his exam results. The crestfallen lad explained that he’d failed: Grandma Beattie: “You didn’t pass anything?” Grandson Anthony: “Pottery” Grandma: Pottery! “Very useful. Anthony, people will always need plates. Anything else?” Anthony: “And sociology” Grandma: “An ology! He gets an ology and he says he’s failed. You get an ology, you’re a scientist!” Roll forward to present day and Trinity McQueen, an award-winning insight consultancy, recently bought itself an ‘ology’ to build on its behavioural science core, acquiring Blinc Partnership in February. Commenting on the deal, co-founder of Trinity McQueen, Anna Cliffe, said: “Blinc has unrivalled experience in TV and media and their innovative tech means clients can get quick feedback on how to develop successful TV shows, films and now advertising content.” For me this is smart on many levels – Trinity McQueen has acquired a complementary business which accelerates growth; gained access to a vertical (TV and film) it was previously not in; now has an ‘ology’ in prediction markets, but probably most prescient of all – it is now looking at what other verticals its ‘ology’ can be taken to. And of course, for better or worse (depending on your viewpoint), behavioural science has taken on new importance during the current pandemic, so perhaps Trinity’s swoop for Blinc was even smarter than it seemed at the time. In our last blog, we finished by saying data, tech, and digital were going to be key areas for agencies to have to reinvent themselves towards in a post-pandemic world. In our view, Beattie’s ‘ologies’ are going to be really important. So, has your agency worked out what its ology is? Because you’ll need one to reinvent, and you’ll need to reinvent at least part of your business in order to prosper in the as-yet unknown world of the “new normal”. One thing we do know about this dawning new world is that face-to-face meetings and business travel will be both more difficult and expensive than they have been hereto, but also much less common or necessary. Who’d have thought, for example, that a previously obscure video conferencing tool called Zoom would rise to such prominence? Or that Microsoft’s Teams software, aimed at the enterprise sector, would suddenly be also marketed as a tool for bringing families and friends – as well as business teams – together? Zoom and Teams are likely to play a more important role in the future than Lufthansa or BA. Teleconferencing has its issues of course, but the technology is now accelerating at an unprecedented rate, spurred on by Covid-19. In The Times newspaper recently, Microsoft boss Satya Nardella put it rather succinctly: the need for social distancing would lead to a “remote everything”. It had also, he added pointedly, brought the adoption of various technologies forward by “at least two years”. In the same piece his Google counterpart, Sundar Pichai, pointed to a massive upturn in digital activity and forced migration to online work, as well as shopping, entertainment, medicine, and more (Google also has its own video conference tool, Meet, of course). Adapting to these new ways of working is one thing, but what are you doing to get your own ‘ology’ to ensure you have a sustainable differentiated offer and will emerge as one of the future winners? A move to more digital and tech-driven activity seems clear – software, methodologies, and tools will play an even bigger role in meeting clients’ needs. These will either have to be built from the ground up – requiring businesses to buy in new skills – or else they’ll have to use their creative abilities to come up with ways to leverage or build on existing tools and platforms. Another challenge – or opportunity – is the industry’s lack of on-demand data insights, both agency and client-side. Back in April the Chief Marketing Officer Council, which represents CMOs, surveyed its 16,000 members (in around 10,000 companies) in an effort to understand the global pandemic’s impact on global strategies, operations, budgets, and outlook. The vast majority (84%), the survey said, expect the pandemic will multiply business disruption globally, while even more (90%) expect to make changes to their marketing plans. However, two-thirds (66%) said they do not have enough real-time visibility and insight into the pandemic’s impact across both the demand and supply chains, while a similar number (69%) are not satisfied with “the quality, timeliness, and usefulness of decision support data”. The CMO Council said marketers are being forced to make decisions the “old-fashioned” way, tapping into their experience of, instincts about and knowledge of customers and the market, rather than following the data. Although, it’s worth pointing out that most marketers seem to feel they are addressing customer consternation and concern either “extremely well” [36%] or “moderately well” [56%]. This points to a need or opportunity to develop data tools to help clients. CMO Council executive director Donovan Neale-May said at the time: “Companies with real-time visibility into supply and demand chains are better prepared to make informed decisions, as well as adjust, redirect or moderate marketing activity. Unfortunately, not enough do, and so many are struggling to re-calibrate operations and spend.” Many decades later Grandma Beattie’s words are as prescient as ever and are behind a lot of what we have always worked with our clients on – it’s time to get your ‘ology’… Read more

Who’d be in retail right now? While online vendors such as Amazon prosper (at the time of writing, the company is making $10,000 worth of sales a second), times for ‘brick and mortar’ shops have been – to put it mildly – torrid these past few years. Now, with the world enveloped in a Covid-19 pandemic, the going has got even tougher. Some retailers, many of them familiar high street names, have gone under – Laura Ashley being a recent one, with Debenhams, Oasis and Warehouse all teetering on the edge. In business, the motto is ‘adapt or die’, although given the extreme uncertainty of our current situation, adaptation feels like it is going to be difficult. So, we thought now would be an interesting time to look at how businesses – all businesses that depend on footfall, human presence and face-to-face meeting, not just retail – might cope and we have a few suggestions for how you may look to reinvent yourselves. The first thing to remember is that sticking one’s head in the sand is not an option. Things are unlikely to get back to normal anytime soon – indeed, they may already have changed forever. Some retail businesses, aware that the landscape had changed, were starting to adapt even before the coronavirus outbreak. Carphone Warehouse, looking at its data, had realised that its small standalone high street outlets were no longer profitable, so the company decided to close these down and incorporate mobile phones into its larger PC World/Currys stores, figuring that the latter’s tech offering would work symbiotically with the CW offering. Then there’s fast-fashion giant H&M, which, despite having opened new stores in emerging territories, has found its established markets in the US and Europe (where it plans to close 175 shops) under pressure. Management’s answer has been to change strategy, to use its 5,000 or so stores to act as logistical hubs to boost online sales: one can imagine your local H&M becoming not just a place to buy dresses and trousers, but also somewhere to pick up your online orders, maybe have a cup of coffee, meet friends, see a fashion show or the latest collections… the possibilities are almost endless, but to remain viable, a retailer must do more than just sell stuff, it has to add value, to offer shoppers an experience that’s worth their time and them travelling. In the affluent Battersea area of south London, Marks & Spencer has converted a medium-sized (and previously rather dowdy) clothing and food store into an ‘M&S Market‘, a kind of upscale miniature version of Borough Market, offering M&S favourites as well as ‘artisanal‘ goods, an in-store salad and herb farm fixture, local craft beers, food-to-go and so on. If you’ve visited, you were probably impressed – it reminded me of one of those upmarket New York grocery stores, the merchandise looks fresh and inviting, the layout is adventurous, it offers pretty much everything you could need, and there’s a real sense of theatre about the place. It’s somewhere you’d make a detour to, and spend time exploring. As someone who has a soft spot for M&S and who has despaired at the company’s tired retail estate and frustrating online experience, a visit to this store made me smile. I understand that early sales figures from SW11 are promising, so let’s hope it works. And of course, it’s not just the big chains who are looking at doing things differently. Many of the family-owned department stores that were once a feature of every town have gone under, but those that have survived have done so by offering that extra degree of customer service, and by providing – usually via their coffee shops and restaurants – a social hub, somewhere to meet friends, relax and have a natter. For older people particularly, oases such as these provide vital social contact with others. The online shopping experience may be convenient, cheap and efficient, but ultimately, it’s a cold, perfunctory process – which is why so many music fans still buy from record shops (although these have admittedly shrunk in number). Of course, all of these innovations are largely moot right now. As we are in the middle of a pandemic, social contact is being discouraged if not yet outlawed, and most business models seem to be broken. The emergency is as much financial as it is medical. But as unpredictable as events are right now, as bleak as the business outlook seems, there are still opportunities for those who are willing to do things differently. Where they were able to, many coffee shops and restaurants converted themselves into takeaway-only operations. I heard about a restaurant that, faced with enforced closure, had converted itself into a kind of retail outlet, buying supplies from its wholesaler as usual and offering customers ingredients and ready meals to take away and cook at home. Even our mighty supermarkets may be forced to change. The recent spate of panic buying has forced them into selective rationing and, visiting a supermarket, it’s striking how the staples are often in short supply, while exotic ingredients and gourmet sauces are still plentiful. One of the reasons for German discounters Aldi and Lidl’s success over the past few years has been their compact range (they are officially known as LADs, or “limited assortment discounters”) – typically an Aldi or Lidl will carry 4,000 lines compared to the 100,000 of a superstore. Research from Kantar and others has demonstrated that this limited range makes shopping easier and quicker, and actually strengthens the consumer’s perception of value. One can envision the supermarkets stripping out the dozens of fancy mustards or bottles of mirin to allow more space for the in-demand staples. And Amazon isn’t immune either – the online behemoth has said that it will not be stocking any more supplies of vinyl records, freeing up space in its warehouses and supply chain for more essential items such as groceries and toiletries. The out-of-home entertainment industry has been impacted perhaps more than any other sector, with theatres, venues and galleries closed and tours, festivals and concerts cancelled. How do musicians and actors make a living now? The problem of musicians seems particularly acute, as playing live is now practically their only means of scraping a living, the returns for recorded music being so meagre. Yet even here, there are some green shoots. A number of enterprising jazz, rock and folk artists and grassroots venues have started live streaming gigs straight to fans – the most high profile example being last weekend’s Lady Gaga-organised One World: Together at Home series of gigs, which featured the likes of The Rolling Stones, Elton John, Paul McCartney and Billie Eilish, which raised more than $127m for Covid-19 relief. With more and more people confined to their homes, there will be a hunger for entertainment of all kinds, and this could represent an opportunity for those wanting to take it up. There have also been (as yet unverified) rumours that streaming sites such as Neflix, Disney+, Spotify, Amazon, and Apple TV/Music have seen huge growth; and The New York Times speculated that the album (as opposed to individual tracks or the playlist) might make a comeback, with listeners looking for a richer experience. With stores switching to “logistical hubs” or fashion show destinations, artisanal food halls from M&S, barbers selling T-shirts, restaurants becoming retailers, what is the response going to be from marketing services, media, production and similar businesses? What good can be learned from what is happening right now? How do these businesses think differently too, use their creative energies to help their clients (in every conceivable sector) get through this most testing of times. This is where the dynamic, nimble, and innovative can steal a march on the big consultancies that have eaten into their domain so much in the past few years. Creatives, technologists, and planners will need to concentrate not just on award-winning campaigns, but business solutions. Times as extraordinary as these will require different thinking and new ways of working; and without putting too much of a gloss on what is a grave crisis, this could be the biggest opportunity for agencies since the 1950s. Peoples hands are being forced to find new and innovative ways to solve client problems, and there’s no people better to do that than those within the creative community. Some of the ways that businesses may look to adapt or reinvent their service offerings and models may include: Recognising that the disintermediation process will continue as clients develop more digital marketing and creative capabilities internally. You could look to step towards this, rather than bemoaning it, and assist in the process by offering clients access to talent that can work within these departments on a temporary or permanent basis. Clients may want you to develop the strategic approach and the ‘big idea’ that then gets handed over to their internal department to take on and fulfill across their communications and content channels. Or the reverse, where the clients wants their internal thinking to be activated by highly effective and efficient execution agencies. Becoming digital and technology partners to your clients. It is clear that technology has now become a critical factor in developing competitive edge for brands – the current environment has now elevated this further. Many clients are unclear about which technology platforms are right for them and how to integrate and leverage these into their marketing ecosystem. This is an opportunity for you to develop deep strategic partnerships with clients on the basis that you can help clients understand how technology can give them the edge to win in tomorrow’s markets. Another area that you can deepen your relationship with clients is in relation to data. Clients now have access to massive reservoirs of data that can be utilised to shape messaging, new product development, innovation and marketing investment optimisation. In many cases this data is underutilised as clients have simply not figured out how to even begin to draw out the necessary insights and conclusions from it. You can utilise your strength in creative thinking to synthesise the data into new approaches to strategy and marketing communications in these rapidly shifting times. Yes, it does seem rather gloomy out there right now, but it is also an opportunity to reinvent yourselves in order to become indispensable to your clients for the next 20 to 30 years. And in keeping with this we are in the process of extending our own offering – watch this space. Read more

As the world faces its gravest crisis since the second world war and the Great Depression, it is inevitable that our attention will focus on behaviour – of all sorts. Since the Covid-19 pandemic affects just about everyone, will impact every corner and sector of every economy around the world; and because the disease occupies just about every square inch of newsprint and every minute on virtually every type of media, there’s no other story in town and, in developed economies at least, it feels as if we are on some sort of war footing. And while during the war and the Depression, negative coverage tended to focus on the bad behaviour of individuals or groups (from nations to companies), in our brand-dominated age, the focus in 2020 falls on brands. Interestingly, earlier on in this developing story, coverage tended to focus on the brands that were doing good things, behaving altruistically. But as the scale of the crisis has escalated, and the reach of the virus has become universal, and in the “wartime spirit” of “we’re all in this together”, it is now expected that brands will behave well, acknowledging the depth of the crisis. So, earlier this week the housebuilder Taylor Wimpey – one of the first construction firms to close down its sites – said it was scrapping annual bonuses and announced that its board were taking a 30% pay cut; and, the same day a number of major banks announced that, following order from the Bank of England they were scrapping shareholder dividends and were thinking of doing the same with bonuses. Given the crucial role that the banks – who have, in the eyes of a great deal of the public yet to be forgiven for their role in the 2008 crash – are going to play in the coming weeks and months, especially as hundreds of thousands of companies and individuals teeter on the edge of ruin, banking brands will come under the spotlight more than any other brand. Already they have been criticised for being ‘too commercial’, and I think, as a result of public and governmental pressure, we can see banks becoming less hard-nosed and fulfilling a social function, perhaps even working in the service of the wider public good rather than the demands of stockholders. Given the scale and reach of the suffering caused by this pandemic, the public – and perhaps governments, particularly if they’re looking to get re-elected – aren’t going to forget or forgive those brands which transgress, and not just banks either, which brings me neatly onto a fascinating survey – The Trust Barometer, compiled by PR giant Edelman from 12,000 respondents in leading global economies – published this week. It says that brands’ actions during the coronavirus pandemic will have a significant impact on future purchasing behaviour for consumers (as a side note, it will be fascinating to see how followers of certain Premier League football clubs, who have so far made an absolute hash of things during this crisis, react. As every marketing student knows, footy clubs enjoy unrivalled brand loyalty – if they are seen as behaving in a way that goes against current sentiment, such as furloughing ground staff whilst continuing to pay the full salaries of professional footballers, what will happen to their support?). Already, reveals the Barometer, consumers are demanding that the must change the way they interact and communicate during the Covid-19 crisis, with 65% agreeing with the statement ‘How well a brand responds to this crisis will have a huge impact on my likelihood to buy that brand in the future’. When looking at individual country responses, the figure for the UK was 64%, with China (interestingly) way out in front with 88%. One-third of respondents said they had already stopped using a brand that was not acting appropriately in response to the global crisis. The importance of the role brands could play is reflected in the sentiment that globally 62% of consumers said they did not think their particular country would make it through the crisis without brands playing a “critical role” in the fight against Covid-19. And, even more importantly, consumers are holding companies to very high standards – the first thing they demand of brands and their owners is for them to ‘protect the well-being and financial security of their employees and suppliers, even if it means suffering big financial losses’; with 90% of global respondents supporting this statement and 52% saying brands ‘must’ do this to earn or keep their trust. Another vast majority (89%) said brands should shift to producing items that help people meet the new challenges presented by the virus and/or offer free or lower-priced products to health workers and other high-risk individuals. We’ve already seen this, with formula 1 racing teams and others offering to make ventilators (and working with the NHS to design and provide equipment), companies such as Zara owner Inditex switching to mask and PPE production, Diageo providing 96% ethyl alcohol used in vodka and gin production to the production of hand sanitizer and LVMH, the luxury conglomerate, is switching production from making high-end perfumes to turning out the same. Various take-out food and coffee shops such as Pret were providing free hot drinks and discounted food to NHS staff and Uber are offering free rides and meals to NHS staff, whilst onboarding a significant number of independent restaurants and speeding up payments via Uber Eats. This is the new normal – it’s no longer good enough to be ‘great value’ or ‘good quality’, brands now not only have to respond to the crisis in a positive way, but they also have to be seen to be doing so. 90% of respondents expect brands to keep the public fully informed of how they are changing the way they operate in light of the global health crisis. Brands are warned against being light-hearted in their communication strategies with 57% advising against advertising that is too humorous. The public are entertaining themselves by sharing amusing videos and cartoons on social media, they don’t want brands to try to be funny and gatecrash the party. And it would appear they don’t want really want brands to connect with them regarding virus-related issues via social media with only 19-31% (depending on platform) wanting communications via Social, compared to 45% via traditional media (TV, newspapers and outdoor) or email (41%). Unsurprisingly, the most trusted spokespeople are doctors and health authorities (trusted by 78%), but strikingly, brand CEOs and brand ambassadors/experts were still trusted by 44% and 48% respectively, meaning that high ranking directors and marketers have an opportunity to build on and reinforce themselves as trusted advisers (or need to, depending on your point of view). So, in our new reality, brands should properly contribute to the greater good; not act alone. One of the criticisms of big pharma right now is that the companies are protecting, rather than sharing, their data – data sharing is seen as crucial to developing a breakthrough. Brands need to collaborate and work towards a common goal – we have seen this with supermarkets ensuring specific times kept free for vulnerable shoppers and sharing deliveries and data about stock levels with each other; they should solve, not sell; their marketing messages must be authentic and considered in tone, they must communicate with emotion, compassion and facts. And what part can marcomms agencies play? I think it will be a crucial one – one of wise counsel as opposed to just being the “people who sell”. Agencies need to focus on enhancing their role as protectors of brands. In this way, traditional agencies, which understand brand stories better than anyone (perhaps even more than the brands themselves), who know the power of visual and textual narratives to change behavior and reassure, can claw back some of the ground they have lost to ‘in-house’ and the big consulting firms. But that’s a subject for a future piece. Read more

There is no need to write an introduction explaining why I’ve pulled together this piece with my team at Green Square. What we have done is gather our thoughts and learnings, and put them together with the experience of various peers in the industry who have been through dark times before. We hope that what follows may be a useful guide to help agencies through a period of extreme uncertainty. There are three key areas that need to be considered – leadership, clients and commercial. Let’s start with the former.

Leadership

Particularly in the current maelstrom, leadership is about giving people confidence and faith when what they are probably experiencing is fear: fear for their health, their job and their livelihoods. However, what leaders must not do is bullshit or stick their heads in the sand. They will not have all the answers. The situation is fluid, things change daily, and they may well get worse before they get better. People need to be told this and reassured that their leader will do the best they can in these constantly changing circumstances. People need to see calm leaders who encourage, support and give optimism wherever possible while keeping to the truth. It’s completely expected for a leader to tell people they don’t have all the answers. It’s also reasonable for them to ask their teams to constantly pivot depending on how the situation evolves and react to whatever legislation and government support is made available. But as leaders, bear in mind you are not alone. Many people are in exactly the same position as you – experiencing the same fears, the same self-doubt, wanting to know if they are doing the right thing. Reach out to your peers and, if you don’t have anyone you feel you can easily chat with, consider using a coach. Non-execs are also excellent sounding boards at times like these. Indeed, this is when they should come into their own. Key points Communicate regularly with your staff and particularly with your direct reports. Do video calls for all staff if you are able to; it’s personal and as intimate as we can get right now. If you can’t, then send some other form of company-wide communications. People will crave information and communication, even if there’s no new news, so make sure they get it. Ensure that everyone in the senior management team has bought into the plan and is mirroring what is being said. People need reassurance and they do not want mixed messages. The chief operating officer, chief financial officer, HR director – everyone must all bang the same drum. These are the senior players that people turn to for further reassurance. People need to know what you expect from them – the key issues the business is facing and what you can collectively do to mitigate the risks. Nothing unites like a common enemy, the enemy, in this case, being a virus. Prepare a schedule for how staff should operate when working from home, get it down on paper, create the framework for people. Some staff may have to manage children that are now unexpectedly at home or ill relatives. Understand what can be done to mitigate the impact of these things and where you can, be flexible. Alongside giving direction, don’t forget to be humane. People need empathy, particularly in tough times. There may be some very tough decisions regarding your staff base, despite government intervention and support. When these decisions are made, be decisive and try to do it once. ‘Death by a thousand cuts’ breeds fear and mistrust. Do not procrastinate. This situation is likely to get worse before it gets better. Don’t rely on false assumptions that the next roll of the dice will come up a six. Implement the plan and stick to it, while allowing pivot points when things don’t pan out as expected. Scenario plan in the event of your own illness and those of the management team. Who will take over from whom? In theory, those affected will recover within seven days from symptoms starting, but many could fall more seriously ill and families will need to remain self-isolated for longer. Make sure you have the succession plan (albeit, hopefully temporary) in place now.

Clients

One of the biggest risks is client spend being reduced or pulled. For some businesses, the likelihood of this happening will be high. For others involved in things such as streaming, online content, delivery services, the risks will likely be much lower. A clear balance needs to be made between ensuring clients contracted to work with you continue to abide by their obligations while not burning a long-term, respected client relationship for short-term cash inflow. Key points As this is not a typical recession situation, and virtually everybody will be impacted and in survival mode, it’s not one where you can easily ask friendly clients for support. What you should be doing is regularly checking in with your clients, making sure they are well and offering any support you can realistically give. Focus on your clients, not yourselves. Understand the crises they are facing and how you can possibly help mitigate their problems. This is the time to focus on nurturing the client relationships you have and to revisit lapsed clients too. Strengthen those relationships. Get key client plans in place and review them at least weekly. Name specific responsibilities for individuals and focus on ensuring agreed actions are taken. Make sure your best people are all client-facing and client-engaged. This applies to those lapsed clients also. Go back through your invoices: who have you worked for in the last three years that you no longer have live projects with? Follow them up, check that they are OK. Clients for which you have committed projects must be prioritised. Those who have promised work to you must be promptly followed up with to get that work locked down. The world hasn’t stopped. People are still working, albeit mostly remotely. Continually review your pipeline and be pragmatic and realistic, not optimistic. Understand what’s gone, what’s going ‘on hold’, what’s still a live prospect and what needs to be done to convert it. Understand your clients’ external focus and drivers and what you can provide to facilitate them in delivering their objectives. There’s no point offering them your regular services if their key priorities have changed and you are no longer relevant. Be proactive in suggesting you adapt or delay work already underway, where it no longer makes sense to continue that project. Look for work, not budgets. This may not be services you currently provide for a client, but services you provide for others that your other clients may need. In a recession scenario, long-term brand building quickly gets sidelined for short-term sales initiatives. Think about how you can support your clients in helping them shift product short-term and protect their own revenue streams. Focus on low-hanging fruit. What work can you quickly pick up, deliver and get paid for? Productise your offering where possible. Say: “This is what we do, this is how we do it, this is who we do it for and this is how much it costs”. Make your services easy to understand and easy to buy. Stay close to your referral partners. If you use a lead generation firm or have a referral program in place, ensure you fully maximise opportunities through these channels. But be careful to properly evaluate new work coming in – watch out for those looking for a cheap deal or time-wasters searching for free ideas and advice. Be politely upfront with new prospects; you need to establish that work actually exists and, more importantly, that you will be paid. Crank up your PR – this is an incredibly important time to drive awareness and profile. Develop relevant articles and thought leadership pieces that will be valuable to clients and potential clients. Get them out by email, into the trade press and on social media. Avoid discounting. Just because we are in this situation it does not mean you should cut your pricing. If you do this then it is very hard to raise rates again once we are out the other side. An alternative is to break projects into stages, with payments linked to delivery of each stage. This way clients will not have the worry of a large fee commitment (so will be more likely to progress the work) and you have reduced the risk of non-payment at the end of the project. You need to ensure everyone with responsibility for chasing in debtors is onto it. If you have clients that literally can’t pay, then you will need to look at breaking the debt into bite-sized chunks. If it’s a case of them being able to pay but just choosing not to, you have to decide if this is a client you really want once we all get through this. If not, go legal early or you will find yourself at the back of the queue. Clients may come out of this with different business models and different marketing strategies. Understand what you can do to aid their recovery, how their models may have shifted and how your offer needs to be adapted to assist them going forward. Keep track of ideas you have that may help clients with their recovery phases.

Commercial

The following are the more hard-nosed financial impact areas that need to be considered. This does not make easy reading and you must take into account your legal obligations as well as the need for humanity and integrity. You must also take proper advice from your relevant professional advisers. Key points Be absolutely realistic regarding revenue forecasts and cash flow. Do not kid yourselves it will all get better in the near term. It could get worse. Build a worst-case revenue forecast and assume all projects that have not been signed off and committed to will be put on hold. Make sure you strip out anything that is not contracted. Clients will be cancelling and delaying projects. Anticipate retainer fees ceasing. Go through each contracted client and identify where the ‘at risk’ points are for projects being cancelled or postponed. Build a cashflow forecast. Based on the direst revenue forecast above, when will you run out of cash on a business as usual basis? This is your starting point for the actions below that you need to consider. Get an immediate grip on your costs. Immediately remove any superfluous costs that can be cut. This is not just cancelling the entertainment streaming subscriptions when no-one is in the office. This will include contractors and freelancers who are not currently involved in client projects that can be stood down (but bear in mind you should try and look after those valued and talented freelancers who will be snapped up by other organizations when normality returns). Freeze hiring and pay rises. All discretionary expenditures must be stopped. Look at every line in the P&L to find savings, and work with suppliers where possible to mitigate costs. Focus on where any savings can be made, no matter how small. Your biggest cost is likely to be your staff. In the UK, you need to consider making those not currently working on projects ‘furloughed workers’. The UK government has said it will reimburse 80% of furloughed workers’ salaries up to a cap of £2,500 per employee. This may be a viable alternative to a wholescale redundancy plan. You will need to check eligibility criteria and bear in mind you will still be liable for 20% of the salary costs and amounts above the cap. Or perhaps you will opt for a combination of this plus government-backed lending – the doors to this opened on 23 March. Consider asking people to go part-time or temporarily seconding staff into clients. Bear in mind there is always a minimum point you can’t cut below and still be able to deliver the work, but don’t let this be an excuse for not taking hard actions from the outset. Owners and directors need to lead from the front and one such step would be a salary deferral or temporary pay cut (while continuing to work full time). If this is what the leadership decides to do, make it clear to the staff you are doing this. It is important they see you sharing the pain. Evaluate your property situation. Can you temporarily sublet, share with others or negotiate a rental deferral? Develop a forecast with key metrics and plan future ‘trigger points’. These trigger points will be actions you will take should your key metrics not be met. For example, if actual revenue is 5% below the forecast in a given month you will make further staff reductions or request everyone goes part-time. It’s not all about cost-cutting. Look at efficiencies: are there ways you could be doing things differently, better or faster? In the good times, these things get overlooked; in the bad times, they become a necessary point of focus. Be ruthless in chasing in unpaid invoices and watch out for potential bad debts. Clients may wish to delay paying you, but job losses and restructuring announcements at client companies are a sure sign that you may not be paid on time. Get everyone focused on profit. Understand the ramifications of any offers you are making to your clients and ask whether they are sustainable. Is there an opportunity to come together with other agencies to best effect an increasing breadth of offering? In the case of needing to rationalise staff, is there an opportunity to ‘huddle together to keep warm’ or temporarily outsource the work you otherwise would have done together with some staff? Even, perhaps, to a friendly competitor? Where you are part of a group of companies, have private equity backing or external shareholders, you will be under more intense pressure to provide constant financial updates. Understand exactly what your investors need and manage that relationship carefully. Investors do not like nasty unexpected shocks. Keep them updated on your plan, how it is progressing and when you need to make changes to that plan.

And when this is all over?

In many cases, the business models will change, not simply because of need, but because we will have had to do things differently – less travel and mobility, more reliance on the internet for online meetings and people will have focused on things they can do at home that may be different to their day-to-day routines. People will have had new experiences and this may drive new consumer behaviours – from simpler things – such as a growth in home learning and home cooking – through to a potentially accelerated decline of the high street, as the vast majority of people will have been forced to do everything online. You will need to ensure your business can adapt to whatever new paradigms may exist. As long as you behaved with compassion and integrity throughout and maintained excellent relationships with your most important business constituents – your clients and your staff – you will hopefully come through this just fine and in a good position to rebuild. At the end of the day, it is important not to bury our heads in the face of adversity. Despite the bleak current outlook, there will be new opportunities, and these could be very exciting. I would like to give specific thanks to our friends Noel Penrose and Chris Savage who have added valuable insight.

What’s next for beleaguered M&C Saatchi is the question now being asked after the resignation of the agency’s co-founder and three fellow directors in a shock move many have described as a “sad” ending to the advertising mogul’s career. Yesterday (10 December) Lord Maurice Saatchi resigned from the agency alongside board directors Lord Michael Dobbs, Sir Michael Peat and Lorna Tilbian following a year of profit warnings, lost clients and a “cock-up in the accounts department”. Defiant chairman Jeremy Sinclair vowed the business was “determined to restore the operational performance and profitability” and has started a process to reconstruct the board with new independent directors who will have “a mandate to conduct a full review of all aspects of our governance”. Sir Martin Sorrell began his advertising career at Saatchi & Saatchi (the unrelated creative shop later acquired by Publicis) in 1977, under brothers Charles and Maurice. The ex-WPP chief, now founder of S4 Capital, simply said of his former boss’s departure: “It’s rather sad really.” It’s a sentiment echoed by others in the industry. Ollie Latham, planning director at VCCP said: “This is such sad news. Lord Saatchi always smiled and waved when you passed him in the hallways. He set up a poetry foundation in memory of his wife. He is an advertising titan who deserved a much better end to his career.” Saatchi’s departure comes after a devastating year for the self-declared ‘biggest independent creative agency in the world’, which after being established nearly 25 years ago now operates in almost 30 markets and owns the likes of Lida, MCD Partners and The Source. In August, PwC discovered a series of historical “misstatements” in the company’s accounts, including an “overstated accrued income” of £2.6m. Last week, it issued its second profit warning when it revealed an £11.6m hole in its earnings. Clients have also fled, with NatWest, which contributed a significant chunk of revenue, recently moving its advertising account to The&Partnership resulting in a round of voluntary redundancies. It will now fall on chief executive David Kershaw, founding partner Bill Muirhead, chief financial officer Mickey Kalifa and finance director Andy Blackstone to turn the ship. Sources told The Drum Kershaw intended to resign but was persuaded to remain. All past and present directors have declined to comment. Tony Walford, a partner at corporate finance consultancy Green Square, said the company line on the proposed reforms and reasons for Saatchi’s exit have left more questions than answers. “The resignations are over the proposed reforms in respect of governance and the restructuring around this. What we don’t know is whether they felt the proposed restructuring is too stringent, isn’t strong enough, because they don’t like what is being proposed from an operational point of view or because maybe they wanted David Kershaw to go,” he said. “We have to wait to see what else comes out over the coming days (I’m sure there will be a lot) that will put things into more perspective.” While the latest personnel exits might not be felt on a day-to-day basis when it comes to client management or delivery, it has sent a signal to the market that the departing quartet were unwilling, or unable, to provide solidarity during the most challenging period in the agency’s history. After voting with their feet, M&C Saatchi’s share price fell almost 6%. “A completely leftfield thought could be they are looking to take advantage of the collapsed share price by raising private equity money and taking it private,” suggested Walford. “Maurice keeps his baby, much less governance and public scrutiny as a private company and, if the share price falls further, it could be a bit of a bargain (although quite an expensive thing for Maurice to do if the price drops again due to their departures, given the 4.5% shareholding he already has). That said, Lorna’s prior banking background would certainly help facilitate something like this.” Meanwhile, rumours have quickly swirled in ad land that another buyer might be ready to swoop in and snap up the bruised advertising group. City traders have posited that Accenture Interactive could make a £70m play in a bid to build out its own sports marketing and sponsorship offering through M&C Saatchi’s Sport and Entertainment agency. “They’ve literally had the perfect annus horribilis – the accounting disasters, loss of an anchor client and now this,” surmised Walford. “Thus it’s really hard to predict what the future will hold. David Kershaw must be desperate to see the back of 2019.”