Court papers show client blamed Ikon for $500,000 sales shortfall as details emerge of legal scrap
Sales from a marketing campaign drawn up for a hair loss brand by Ikon Communications fell half-a-million dollars short of expectations, with TV ads poorly executed and targeted at the wrong demographic, it has been alleged.
In documents filed with the Supreme Court, Advangen also claims the reach of the ads had not been achieved while other elements of the campaign, including social executions, were not ready by the time the TV spots ran.
That prevented Advangen from running an integrated campaign across various channels “maximising product awareness” and driving sales, the brand said.
Details of the claims emerged after Ikon launched legal action against Advangen earlier this year, claiming its former client had refused to pay invoices totalling almost $1m for a campaign which ran in the second half of 2015.
Advangen launched a counter claim, alleging Ikon “engaged in misleading and dishonest conduct” by producing sub-standard work, or no work at all.
The dispute, detailed in claim and cross-claim statements seen by Mumbrella, centres on a campaign for Evolis, a product designed to treat hair loss, which launched in Australia in mid-2015.
Ikon won the pitch to produce the creative and media buying for the campaign, with Advangen saying at the time it believed Ikon was an “excellent partner” that would “turbo-charge the business towards the market”.
Advangen said it pulled the campaign in October – with the exception of two blogs and TV ads that had already been booked – “as a result of there being no increase in the sales of Evolis and failures of the Evolis campaign”.
The company claims a media plan presented by Ikon indicated the campaign would generate sales of “at least” $750,000 between July and November 2015. Advangen also insists Ikon had indicated that 60% of the target audience would see the TV ad at least once with 38% viewing it at least three times.
In its claim to the court, Advangen said sales of the product reached only $177,659 and that its target market of females over 35 had not been sufficiently targeted.
In response to the accusations detailed in legal documents, Ikon rejected the claims and argued the media plan was a “working document that did not convey any representations about sales that would be generated or reach rates that would be achieved”.
The agency said the reach rate and figure of $750,000 “was provided by Advangen to Ikon and was incorporated into the media plan as a target”.
“The media plan contained a clear and prominent warning to Advangen in the following terms: Media will deliver consumers into sales channels (both in-store and online), [but] overall conversion to sales is dependent on many factors beyond media,” it said.
Elsewhere in the documents, Advangen claims the TV ad failed to adequately mention hair loss or hair thinning, failed to explain that Evolis is a “topical hair growth tonic” and only “momentarily” mentioned where the product could be bought.
“The advertisement….instead referred, at the end of the advertisement, in a written statement, in small font, to Evolis inhibiting “FGF5″ without any explanation as to what FGF5 is,” it said.
In addition, Ikon is accused of booking “numerous advertising spots during programmes directed at a male audience at times not appropriate for the audience of females aged over 35″.
It also failed to use more than one free-to-air TV network, according to Advangen, while social media executions, blogs and consumer trial elements of the campaign had not been delivered when the TV ads began.
The agency has denied all accusations, including a claim that a showreel designed for pharmacy buyers “was not of acceptable quality and did not meet Advangen’s requirements as briefed to Ikon”.
In its cross-claim statement Advangen claimed it has suffered “loss and damage” by having to pay $443,408 to another agency, Chaos Media, to replace Ikon, while it has also incurred “wasted costs” of $688,053 to provide a sales force team to support the campaign.
Furthermore, Advangen said it has already paid Ikon $466,136 “without having received any benefit from that expense”.
Ikon, in lodging legal action against Advangen for non-payment of invoices, said it carried out work in accordance with agreements and is owed $939,055, plus interest.
Attempts at mediation have failed with both parties agreeing further talks “would not be productive”.
A hearing is scheduled to take place at the Supreme Court on February 10.
topics
Advangen
Advertising
Evolis
evolis advertising campaign
hair loss product
Ikon
Ikon Communications
Ikon court action
Marketing
Media
Media agency
TV advertising
Perhaps I’m naive, but I would have thought that with a $1m campaign spend with the agency, the client would surely be signing off both final creative and media schedule? I’m all for accountability in this industry, and perhaps this is a small light on the (in)effectiveness of new-age media scheduling, but at the end of the day, there is NO WAY Ikon would have pushed any of this to market without final client sign-off. Curious to see how this will unfold, and if anything, may bring a bigger spotlight to agency processes and the contracts that exist between client and agency before executing work.
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One has to ask: “Did the client not sign off on the plans, scripts and review the work before it went to air?”. Coming from the client side, this is all usually discussed in great detail and agreed to before any work is done. The comments about key messages missing from the campaign also begs the same question. As a client you have a large amount of responsibility for a campaign’s execution and this begins and ends with you.
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I’d be suing the pack design agency first…
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What? How does the client complain about the contents of the TV ad – did they not sign off a brief, a storyboard, copy deck and then final edit?!
The outsider’s impression is that of a completely inexperienced client, working with an agency that struggled on the creative side.
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This is an absolute disgrace, and good on Ikon for suing them. I hope as an industry when Advangen comes knocking on our doors we all tell them to piss off.
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Social execution is all wrong as well no engagement all yell and sell, Insta is same content as facebook?, facebook reviews however are all glowing 5 star rating?
80% posted in August, mostly same word count, same tone…suss!
Now go to the website and most product say “out of stock” what a mess!
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A hefty budget and I’ve never heard of the brand name. Enough said.
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So a client selling a product that doesn’t do anything is not paying for their campaign because it didn’t work. Right.
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We obviously dont know the details here, but the only valid argument the client has (possibly) is that the wrong audience was targeted – as in different to what they signed off on.
But if Ikon presented a media plan, with all the details of what was to be bought, and the client signed off on it, and then Ikon delivered as per the signed-off plan – then I dont think the client has any recourse to complain or and justification not to pay for what they approved.
If Ikon did as above, I look forward to the court ruling in Ikon’s favour and a bad client being exposed.
If Ikon did not do as above, then they are just being plain silly suing the client and will lose.
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Hilare. Nods’ head in agreement.
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