Tesco’s de-coupling is the way forwards

When I saw the news Tesco had appointed Wieden & Kennedy to handle their £110m ad account my first reaction was ‘interesting and surprising decision’. The smart money would have been on Tesco hiring one of the big players and not an agency renowned for its outstanding creative output – Honda, Nike, etc. The reason being is the day to day work on any big retailer is fast turnaround tactical advertising, not the DNA of W&K.

Then I read Tesco have also hired TAG and then it all fell in to place; they’ve hired horses for courses to work together which makes complete sense.

For those of you who are not aware of TAG a brief bit of background. TAG began life as a production supplier to agencies for print work and they have morfed in to a high tech provider of a range of services for both agencies but more importantly direct with major advertisers such as RBS, Citibank, Absolut, Sony, Land Rover amongst other 1st division brands. TAG were probably the first traditional production supplier to ad agencies to cross the divide and work directly with serious advertisers.

The logic is obvious but one that has taken at least a decade to make a real impact. On the one hand a client wants access to top talent in planning, creative, account management whilst on the other hand wants a factory to churn out the bread and butter high volume tactical work. These two needs do not sit comfortably under the same roof; however the big agencies have tried to persuade clients they can do both and stop the income sliding away to a different organisation.

The truth, which is often swept under the carpet by senior agency management, is their staff are not there to handle high volume tactical advertising that is disposable the week after it appears. For example, at Simons Palmer we were appointed to handle The Sun and The News of the World following a long courtship. We spent a long time in discussion with the client before we were appointed trying to ensure we had an understanding on how the account would be serviced. We knew we couldn’t manage the clients’ needs with our existing structure as it was geared around producing high quality, big budget TV work for clients such as PlayStation, Nike, BT, etc. News Corp needed ads on TV every week that would be on air for three nights max and then burnt. The average budget for each TV spot was £20,000 versus £500,000 for Nike.

Our solution became a separate unit that had its own system and staff. It worked very well.

My guess is the Tesco solution will send shudders through many agencies who have similar clients because it must be the way forwards on numerous levels.

A simple point. Why use a top copywriter earning more than the Prime Minister to write witty headlines for a this weeks full page press ad of products on promotion at Tesco? Clearly stupid. It is just a very inefficient use of talent plus it is very expensive and unnecessary. Tesco just need a template that reflects the overall brand look and feel with a studio dropping in shots and prices of the featured products.

My guess is Tesco know they need a new and relevant brand positioning plus a fresh creative approach which they will get from W&K. As they have separated out the urgent from the important it means all parties can focus on their roles and not become confused.

I wonder if the boys and girls at The Red Brick Road went native over time as the pressure would always have been about this week. It is inevitable. I have worked for similar clients and the understandable focus is revenue banked this week.

Splitting the tasks makes a great deal of sense for all concerned. There have been a number of examples where relationships end in tears such as the ASDA move to Fallon. Nobody at the time believed Fallon had a hope in hell at handling a huge grocery retailer, the cultural divides are far too great to work. All the creatives at Fallon would want to do the next Gorilla spot for Cadbury, not this weeks press ad for ASDA.

My prediction is we will see more and more structures like the Tesco move. A big change must also come with international clients because the need for on the ground ‘service’ has diminished for many clients. For example holding assets centrally is now totally feasible eliminating the need for multiple production costs across ten countries. I understand TAG handle Dove worldwide in behalf of Ogilvy as an example. Ad agencies are less capable of delivering this kind of service because they don’t have, and won’t invest in, the technology necessary to deliver the service as it is complicated, specialist and serious capital investment. Therefore outsourcing to the likes of TAG and Zone is becoming the order of the day.

A final and fascinating point. As we know ad agencies out of some weird fluke of history don’t handle more than one brand in a category. It is regarded as a conflict, yet lawyers do, accountants do, and so do the likes of TAG. For some reason it isn’t regarded as a conflict which is why TAG handle several banks and another major grocery retailer. Sounds like they have cracked an answer that has eluded ad agencies for a very long time.

Image: http://www.flickr.com/photos/osde-info/5539522752


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