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Ikon raises prospect of ‘nervous advertising industry’ as Supreme Court test case concludes

The advertising industry would be a nervous one if the success of a marketing campaign was measured only on sales, the Supreme Court has heard.

On the final day of a nine-day legal battle that saw Ikon Communications trade blows with its former client Advangen, Ikon barrister Todd Alexis SC reminded the court that Advangen had cancelled a campaign for hair treatment brand Evolis just six weeks into a 12-month plan.

Advangen barrister John Kelly said the ad was more akin to Gone With The Wind than a promotion for a hair treatment product

He said Advangen had argued it was “plain” the campaign had “failed, and failed rapidly” based on the “subjective evidence of sales”.

If that were true, and sales were the only barometer, the industry would be a worried one, Alexis said.

“If that was correct there would no doubt be many nervous people in the advertising world who might think that, if a sale is not achieved, then it would follow….that their advertising campaign is unsuccessful,” he said.

However, Alexis contended that the issue of sales, and whether the campaign was regarded as a success or not, was a “distraction” to the central issue.

“The issue is whether or not the contract was breached and whether there was any misleading and deceptive conduct,” he said.

Ikon has denied any wrongdoing.

 

The remarks concluded what was heralded as a historic legal case for the advertising industry. Legal experts said an agency’s performance and provision of services have never before been challenged in such a way through the courts.

It is thought the ruling could have far-reaching ramifications for the agency-client relationship.

Advangen blamed Ikon for cobbling together a sub-standard campaign to promote hair treatment product Evolis, including TV spots it claimed were more in keeping with a production of Gone With The Wind than a promotion for a hair thinning remedy.

Ikon is suing its former client for failing to pay its bills.

Resuming their closing submissions to Justice Ball, Alexis and his counterpart for Advangen, John Kelly SC, sort to dismantle each other’s cases

Kelly told the court that sales figures for Evolis through pharmacy retailer Priceline fell away after the marketing campaign launched, and reiterated arguments that Ikon has misled Advangen about sales that could be achieved.

Sales of Evolis through Priceline dropped after the campaign launched, according to Advangen

The campaign “failed and failed rapidly” he said, and went down “like a lead balloon”.

Alexis countered by saying the sales targets of $750,000 were figures produced by Advangen, not Ikon. The agency, he said, incorporated the figures into its plans but at no point did it say they would be achieved.

He said mention by Ikon of a 1% sales conversion rate was a figure that was required in order to achieve the targets. It was not a prediction of what would happen, he said.

Alexis added that Ikon had made it clear to its client that conversion rates were “dependent on many factors beyond media”.

Earlier in the closing submissions, Alexis recalled that Advangen had enthusiastically embraced the creative approach of Ikon.

Kelly countered by suggesting it was the professional duty of the agency to produce a campaign – and specifically a TV ad – that worked, not one that was simply “liked” by the client.

Justice Ball will hand down judgment at a later date.

 

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