Adland's 'optics': it's going be a squeeze in 2015

22 Dec 2014  |  Dominic Mills 
Adland's 'optics': it's going be a squeeze in 2015

'Optics', the weasel word made infamous by the CEO of Premier Foods, is going to be a big deal in 2015 - and we will see its effects play out in adland in two ways as the giant supermarkets slug it out to the death.

Prediction is a mug's game, although that won't stop me having a go in this column which, in a world first, will combine the prestigious and exclusive 2014 Mills on Monday awards, with some crystal-ball gazing for 2015.

I'd like to start with the Quote of the Year, sponsored for reasons which will become apparent, by Specsavers.

The author is one Gavin Darby, chief executive of Premier Foods, defending his company's protection racket, sorry, attempt to attract 'investment' from his suppliers. The deal? Pay up or get delisted.

Caught red-handed, so to speak, the hapless Mr Darby gave this memorable quote: "If the optics of this scheme look bad, I'm happy to move to a more traditional discount scheme."

I love the conditional 'if' at the start of this non-apology. There's no 'if' about it. It is blackmail, and as he says, he's not going to change the scheme, just re-badge it. As they say, "you can put lipstick on a pig, but it's still etc etc."

And what about 'optics'? Talk about a weasel word. Imagine a fraudster in court. "I know the optics of stealing £5bn look bad, but I'm happy to say they were bad investments."

Nevertheless, sticking with the 'future optics', that which Mr Darby speaks of is going to be a big deal in 2015, and we will see its effects play out in adland in two ways as the giant supermarkets slug it out to the death.

First, any agency with a supermarket client will probably, at some point, have to defend their tenure. The three most in the firing line are AMV BBDO (Sainsbury's), Wieden and Kennedy (Tesco) and DLKW Lowe (Morrisons), to mention their media, digital, content, design, PR agencies and so on.

Of the three, it's worth noting that AMV BBDO and Wieden and Kennedy were appointed by previous regimes, in Wieden's case a by-now discredited one.

As well as repitching, any agency on supermarket business will be asked to drop its fees or, as Mr Darby puts it, "invest in" hanging on to their client.

Second, any agency with an FMCG client that supplies supermarkets (i.e. like Premier Foods) will be squeezed on fees, just as their client is. It's life: pain is passed down the supply chain, and agencies are a big part of that chain.

How will agencies respond? Well, other than hitting on their suppliers (media owners, watch out!) and staff (pay rises, no chance), their best (i.e. legal, or 'optically acceptable') way of making any money out of these accounts is to handle them on a consolidated basis, with all the different disciplines supplied by one agency network or holding company group.

Meanwhile, Mills on Monday's Advertiser of the Year, Lidl (sponsored jointly by Philip Clarke and Justin King), will sail on from strength to strength, nicking market share from its rivals with merry abandon.

I don't actually like everything Lidl does in advertising terms, but I admire it's single-mindedness, speed, flexibility and sheer vim.

If there's a Lidl ad that sums it up for me, it's its brilliant assault on the Morrisons price-matching card, below, describing all the steps a Morrisons customer would have to go through in order to get Lidl prices. It's witty, bang on brand¸and shows up Morrisons as slow, cumbersome and off the pace.

lidl ad

So the one agency that won't be facing a review next year is TBWA/London, Lidl's partner in its relentless increase in market share. How much of this is down to the advertising? Lidl is clearly doing everything right, and it has the wind in its favour, but I'd say TBWA's advertising has made Lidl's proposition crystal-clear to a new audience and turbo-charged its momentum.

Mind you, that's not entirely surprising when you consider that TBWA's Lidl team includes not only chief creative officer Peter Soutar (ex AMV/Sainsbury's) but also two ex-Lowe/Tesco alumni, planner John Lowery and creative Paul Weinberger, the latter the author of all the great Tesco ads from the 90s and the 'every little helps' line.

And now to Non-Event of the Year, sponsored by WPP. This was the cancellation of the nuptials between Publicis and Omnicom. When it was originally mooted in the summer of 2013, this struck me as the ultimate vanity project, an attempt by two individuals, Maurice Levy and John Wren, to build an edifice to their towering hubris.

Inevitably, when something like that is motivated by pride and greed, it fell apart a year later, amid mutual recrimination.

Whatever the reasons, it was the moment sanity beat vanity, leaving SMS to wallow in schadenfreude.

Will we see Publicom's great rivals, WPP, IPG, Havas and Dentsu Aegis, try their own version of the mega-merger next year? I doubt it. Too risky, too distracting and, when all is said and done, an irrelevance to clients.

That doesn't mean there won't be consolidation, but it will be at a much lower level with the big players hovering up the small and medium-sized players to fill in gaps in geography and discipline.

The joker in the pack, however, may be Dentsu Aegis which, in comparison with its rivals, needs to rebalance by geography (too much in Japan/Asia) and discipline (more digital and creative to balance Aegis). Add to this the South Koreans, and maybe the Chinese, both of whom have plenty of money to spend and global ambitions on which to splash the cash.

Finally, we come to the last award, for Cultural Shift of the Year, sponsored by Goldman Sachs. This is for the seepage of high-finance techniques into media trading. It's mostly below the radar at the moment, but you can see it in some of the language emerging in the media world: 'trading desks', 'arbitrage' and so on, all of which is common terminology on Wall Street.

The Wall Street Journal
has an interesting piece here about hedgies moving into media because they see an opportunity to marry their skills (and technology) with inefficient buyer-seller media markets - and make more money, more easily, than trading boring old financial instruments.

What next? Well, it can't be too long before we see some of these financial concepts - futures markets, short-selling, and options - raise their head in the world of digital inventory and trading.

The downside is that there are aspects of financial culture that are loathsome. The upside is that it could bring innovation and dynamism. And if this leads to the creation of media-denominated financial instruments traded over public exchanges, the regulators will surely follow.

Whether that will be a good thing or not is, I'm afraid, too hard for me to say. But it will certainly shake media-land up.

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Peter Johnson, Director, Rock Management on 23 Dec 2014
“Premier Foods is living in the real world, feeling the immense pressure of the changes that are taking place in the grocery industry and are adapting accordingly. It's a tough world out there, retailers have been over charging shoppers for years and are now having to clean up their act - the days of 'Every Little Helps towards Tesco's profitability' are over as they all engage in a race to the bottom on price. There will only be one winner here and that will be the shopper - everyone in the industry needs to accept this, get on the bus and start adapting to survive.

Premier Foods might have used an 'optically' undesirable vehicle to gain improved raw material costs but lets not start apportioning blame here - because if we do then we should blame ourselves as consumers for wanting ever reduced prices.

Get over yourselves, man up and accept that this is the real world - the days of 'Mad Men' are over - you will be feeling the extreme heat very soon.”

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