Chime’s Lord Bell on politics, acquisitions, HHCL and VCCP

Although he claims he’s an old fart and nobody’s interested in him any more, Lord Bell (Tim Bell as was in his Saatchi days) isn’t and people are.

Now in his 70th year and recovering from a recent heart bypass his Lordship recently entered the public lists to complain about criticism he received over his Bell Pottinger PR company acting for the repressive (in recent weeks anyway) Bahrain government.

What particularly stung Bell was respected PR Week editor Danny Rogers’ comment that such involvements had a ‘damaging’ impact on the reputation of the PR industry.

Bell’s case against this is partly libertarian, people, governments, companies are entitled to make their case.

“We don’t create policy for our clients we communicate it,” he says. “Of course we’re involved in it from time to time but don’t create it. And we do appropriate due diligence on the backround to such situations just as we carry out financial due diligence on all our clients.

“But I really objected to Danny, whom I like, saying we were bringing the industry into disrepute. Over the last 15 years Bell Pottinger (Chime’s main PR company) has done more to build the reputation of the PR industry in the UK than anyone.”

Bell and politics are inseparable of course, ever since he rose to national prominence when, as managing director of Saatchi & Saatchi, he was instrumental in winning the Conservative Party account and future prime minister Margaret Thatcher as a client.

The relationship between Bell and Thatcher began with the celebrated Labour Isn’t Working poster in 1978 (the year before she came to power) and survived through her three administrations and beyond despite the strenuous efforts of various other agency types to butt in.

“She was right about everything wasn’t she,” he says. “Go on, look at things today. Of course she was right.”

As a member of the House of Lords Bell is now officially a coalition government peer though it’s pretty clear that he’s no great supporter of what the Liberal Democrats bring to the party.

But Bell today is also a highly successful businessman, Chime in his words is “top of the second division and we’re very happy with that. I don’t want to be in the top four (marcoms companies) or five if you include Havas.

“It’s the ditch story. The ditch is full of small companies struggling away and the only way to get out of it is to take a big leap, do a transforming deal. But if that leap doesn’t work you fall right back down to the very bottom of the ditch and get covered with the really mucky stuff.

“Obviously some companies have grown and been very successful through huge acquisitions, WPP for example (WPP owns 15 per cent of Chime). But lots of acquisitions never really work out, they’re neutral at best in profit terms and if they’re too big that can destroy the buyer.

“When we bought HHCL (then a leading London ad agency) that was a disaster because the founders had fallen out and Rupert Howell (who went on to be the head of McCann Erickson in the UK and then the marketing boss at ITV) wanted to run the company. But some very good people who were at HHCL are still with us so that was a benefit.

“But it wasn’t such a big deal that it destroyed us. And we’ve acquired a lot of smaller companies since that have worked out, like ad agency VCCP.”

He can say that again, just this morning Chime has bought experiential sports marketing specialist (whatever that may be) Icon for an initial £11m and revealed it’s negotiating to buy a Brazilian sports agency in time for the 2014 Word Cup and 2016 Olympics.

Chime earns about 20 per cent of its money these days through sports marketing companies Essentially, Fast Track and The Sports Business.

It has also bought a further 20 per cent of Bell Pottinger Middle East from founder Tom Follo and a stake in researcher Facts International.

Chime went into the market to raise £12m for these deals so how does this square with Bell’s seemingly anti-acquisition stance?

“We’re a quoted company and the City only likes growth stories so we have to go and get bigger, sometimes it’s the right thing to do. There are no hard and fast rules about the right way to run things, you do different things as circumstances change. Anyway sports marketing’s been very good for us.

“We have no real debt (although there are earn-out obligations), in fact for the last five years we’ve been defying gravity,” he says cheerfully. So what’s the secret?

In 2010 Chime made a post-tax profit of £12.3m on £123m income, a genuinely good result and one that testifies to the skills of financial director and COO Mark Smith among other influences.

“We’re UK based but the business works internationally, 52 per cent of our income comes from overseas now,” says Bell. “We’re diversified so we’re not too dependent on one sector and we don’t put our name on everything like the big networks do.

“Believe me, I used to run the biggest network in the world at Saatchis and the cost of putting your name on everything, which includes layers of management, is horrifying. We don’t do it.

“To some people that makes the company look a bit messy but I don’t mind in the slightest. It means that we can put our resources into things that matter, like people. We pay well, in the top quarter, with bonuses that don’t get paid if the people don’t perform, unlike some companies.

“And where we can we train our own people rather than buy. Take digital for example, some agency groups have paid through the nose to buy digital agencies and digital technology that is probably out of date in six months. Most digital agencies work on wafer thin margins but some of them still command huge prices.

“Take Icon (another one, this time home-grown at Chime) which has just won Easyjet. It’s a social media expert now but it was started by two guys from the PR business here and they learned about digital and social media. It’s a much better way to do it and much, much cheaper.”

Bell has been saying for years that advertising’s best years are long gone and he’s been right in the sense that PR, among others, has been grabbing a much bigger share of top clients’ attention (and money).

But Chime is doing pretty well in advertising at the moment, chiefly through VCCP (the agency that produces the Meerkats campaign for price comparison site but also with Icon’s Easyjet win.

“John Hegarty said the other day 90 per cent of new ads were crap and he’s right. I don’t know why it is. I do know that it’s really, really hard to produce a good idea but back in the 1970s and 80s there seemed to be a great new campaign every day. Now it’s about one a year.”

He does though positively glow with pride about Chime-owned VCCP and SFW’s Morethan Freeman ads for the eponymous insurance company (the ads use a Morgan Freeman soundalike with the great actor’s permission) although he’s horrified that I haven’t seen them.

“I think they’re best ads made in the last three years,” says Bell. With VCCP (which cost Chime £15m) now nudging into Campaign’s UK Top 20 agencies at 19, ahead of Fallon and right behind Grey, TBWA and Publicis his Lordship might belatedly be recovering some of his enthusiasm for the mucky old art.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.