The issue of client conflict is one that has afflicted both the media and creative disciplines within advertising for as long as anyone can remember.
So how then has Carat managed to scoop three major car brands: BMW, Citroën and Renault, not to mention Peugeot, which went to sister shop BBJ Media Services?
And why has one of the largest global consumer brand manufacturers, Procter & Gamble, stated that it no longer demands an exclusive relationship with its agency networks?
Do these events mark a watershed in the way clients now view conflict within ad agencies?
Carat UK client services director Neil Jones is in no doubt, that his agency has simply demonstrated the inevitable future of the industry and shown how accounts for competing clients can be handled effectively within the same building.
“Confidentiality is never threatened at Carat with separate personnel working on separate floors for the BMW and Citroën accounts,” says Jones.
“Our employees are bound by a confidentiality contract, if breached it results in termination of employment. This has never been necessary and I don’t predict it will be.”
However security guarantees are not enough in themselves to change a mindset that has lasted decades. The real reason for changing views are rather more fundamental.
Agencies in short supply
“There are simply not enough agencies to go around,” says media consultant Steve De Saulles. “Advertisers are a lot less worried about client conflict than many think.”
Media Audit’s managing director Martin Sambrook reinforces the point saying the market will be overwhelmingly dominated by four or five major media agencies within five years. “It is inevitable that competing brands will have to learn to co-exist,” said Sambrook.
“There will always be those advertisers who resist but the reality will dictate that there has to be some thinking about the structures in place within media agencies, as we have seen with Carat.
“We are moving towards few and bigger agencies therefore we must accept conflict or lose out,” he said.
Media Audits’ Advertiser Survey 2000 reveals that many advertisers are accepting they might have to be more flexible in their views.
Encouragingly for the agencies, almost 80% of clients would seek a way to overcome client conflict if it arose. Less than one third of respondents strongly agreed with the statement that their media agency must not work for a non-competitive brand, owned by a company with competitive brands.Over half think that buying consolidation means less rigid conflict policies.
Conflict could be beneficial
There is little doubt that the top priority for agencies is to present a consistently committed face to a client. With this in mind, some believe that conflict can only bring positive change in the marketplace.
“This could be an interesting catalyst for agencies to develop their skills – they’ve already been forced to catch up to hang on to business,” adds De Saulles.
Co-director of Red Media Tim Bullen says: “Conflict will sharpen up the client’s approach to media.
Bullen claims that having, for example, both Paul Smith and Caterpillar as clients can only be beneficial for them. “We can make our research much more relative and cost effective and increase our negotiating power for both parties”, he says.
Bullen also firmly supports Carat’s belief that areas of potential conflict can be neutralised by creating “entirely separate teams”.
Advertisers’ increasing tolerance toward cohabiting agencies with rivals is, however, less prevalent in new media. Quantum New Media Services for example, offers a zero conflict policy to its clients.
“Because Quantum already has the StepStone account, we have been forced to turn down around £4 million of business from three other recruitment agencies,” said associate director Dominic Minsour.
“The conflict issue is particularly important for us because of our extensive use of direct response marketing and a lot of that information is highly confidential.
“A largely brand based marketing campaign such as Coca-Cola and Pepsi would not depend so much on confidential figures and may benefit from shared information.”
Minsour adds that he tends to view relaxed attitudes to conflict within media agencies as a poor reflection on the client/customer relationship and understanding.
However, the activity of many major advertisers is also serving to raise the issue of client conflict. There are more service companies now than ever. Major consumer brands such as Sainsbury’s have branched out into banking and retailing motor cars. This coupled with the deluge of dotcoms competing with bricks and mortar companies further highlights the problem of accommodating the media needs of all these brands.
“Although, at the moment clients are awarding different parts of their business to different agencies, they’ll be brought under the same roof and advertisers won’t be too concerned if there are conflicting account situations” says De Saulles.
“If brand expansion brings directly competing companies face to face then of course conflict will be of paramount importance but clients are now more willing to talk the issues over,” adds Sambrook.
Jones at Carat also agrees: “I believe the announcement from P&G marked a real turn in opinion as they were one of the most avidly conscious of conflict issues,” he says.
However, as Jones is all too aware not every client is as sanguine about the nature of their agency’s other clients. No sooner had Carat won Renault than rumours began that PSA was not entirely happy about the situation. It remains to be seen whether Carat can hang on to all three of its car brands.
This article was first published on Media Week