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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.

Advangen

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.

ikon logo large

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.

 

 

 

Advangen

 

 

 

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