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Watch out ad agencies, Tesco has TAGged on to a new trend

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: the day-to-day work for any big retailer is fast-turnaround, tactical advertising; which is not in the DNA of W&K.

Then I read Tesco have also hired TAG and it all fell into place.

For those of you who are not aware of TAG, a bit of background. TAG began life as a production supplier to agencies for print work and they have morphed in to a high-tech provider of agency services. More importantly, they deal also directly with major advertisers such as RBS, Citibank, Absolut, Sony and Land Rover. TAG were probably the first ad agency production supplier to cross the divide and work directly with serious advertisers.

The evolutionary logic is obvious if you think about it but it has taken at least a decade for the penny to drop. On the one hand, a client wants access to top talent in planning, creative, account management; on the other hand wants a factory to churn out the high volume, tactical work. These two needs do not sit comfortably under the same roof. But that has not stopped the big agencies from trying to persuade clients they can do both.

The truth, often conveniently swept under the carpet by senior agency management, is their staff are not equipped to handle high volume tactical advertising that is history the week after it appears.

I speak from personal experience. At Simons Palmer we were appointed to handle The Sun and The News of the World, following a long courtship. We spent a lot of time beforehand with the client trying to ensure we understood how to service the account. We knew we couldn’t manage the clients’ needs with our existing structure, as it was geared to producing high quality, big budget TV work for clients such as PlayStation, Nike and BT. News Corp, owner of the two titles, needed ads on TV every week that would be on air for three nights max and then be junked. The average budget for each TV spot was £20,000, versus £500,000 for Nike.

Our solution was to build 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 looks like the obvious way forwards.

A simple point. Why use a top copywriter earning more than the Prime Minister to write witty headlines for this week’s full-page press ad detailing products on promotion at Tesco? Clearly stupid: a very inefficient use of talent and a very expensive one at that. Tesco simply need a template that reflects the overall brand look and feel, with a studio to drop in shots and prices of the featured products.

Tesco know that above all they need a new and relevant brand positioning plus a fresh creative approach. And they can only get that from an agency like W&K. So they have separated out the urgent from the merely important in such a way that each party can focus on the role at which they are expert.

Did the boys and girls at The Red Brick Road go native over time? Did the tyranny of the weekly deadline get to them? It wouldn’t surprise me one bit. I have worked for similar clients and the focus is all about revenue banked this week. Not claiming some future dividend.

Another object lesson was ASDA’s move to Fallon. Nobody at the time believed Fallon had a hope in hell of successfully handling a huge grocery retailer: the cultural divide was far too great. All the Fallon creative would want to do the next Gorilla spot for Cadbury, not this week’s press ad for ASDA.

My prediction is we shall see more and more clients doing a Tesco. Particularly international clients who, increasingly, hold their assets centrally and don’t need local support centres replicating production costs across 10 countries. As an instance of this consolidation trend, TAG already handle Dove worldwide on behalf of Ogilvy – or so I understand. Ad agencies are less capable of delivering such a service because they don’t have the technology necessary to deliver the service. That in turn is because it is complicated, specialist and, above all, a 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, through some weird fluke of history, usually aren’t allowed to handle more than one brand in a category because it is regarded as a conflict. Yet lawyers do, accountants do, and so do the likes of TAG. For some reason tactical advertising isn’t regarded as conflict-prone, which is why TAG handle several banks and another major grocery retailer. It sounds as if they have cracked something that has eluded ad agencies for a very long time.

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About Paul Simons

Paul joined Cadbury-Schweppes in brand management and then moved to United Biscuits. He switched to advertising in his late 20s, at Cogent Elliott and then Gold Greenlees Trott. He founded Simons Palmer Denton Clemmow & Johnson in the late 80s, one of the leading creative agencies of the 90s. Simons Palmer then merged with TBWA to create a top ten agency. Paul then joined O&M as chairman & CEO of the UK group. After three years he left to create a new AIM-quoted advertising group Cagney Plc. He is now a consultant to a number of client companies. Paul also shares his thoughts on his blog. Visit Paul Simons Blog.

One comment

  1. Great piece. Really interesting. Thanks.

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