The conflict around conflict in agencyland

“One is fine. Two is a conflict. Three or more is a specialisation.” That line someone quipped to me this week resonated heavily.

“If I had just one of everything, I’d go broke.”

That one was said by advertising legend (and I think we can call him that in context) Harold Mitchell at Mumbrella360, 11 years ago. 

Much to the malign of successful ad agency bosses, they are largely still limited to one client per sector, lest they become specialists and then close off other opportunities.

Many in adland complain that their industry is subject to an outdated system that few other industries are.

Examples often put forward are consulting, lawyers or investment bankers.

A quick google search will show you, for example, that EY’s clients in 2022 included AT&T, and Verizon; 21st Century Fox and Time Warner; Amazon, Alphabet and Facebook.

An agency CEO told me this week: “Consultants, auditors, and media owners all have access to competitive information and a load of details, but for some reason creative, media and earned agencies aren’t able to work across competitors. It’s a legacy that should evolve.

“If you don’t trust your agency but you do the media owners, consultants and auditors then there is a severe problem and you should review your agency partners.”

So why is there still so much conflict around conflict? 

There are cases, such as a sector duopoly, where it makes sense to manage conflicts closely.

Take WPP and its forced exit from the Coles pitch last year as an example. Woolworths engaged WPP’s Hogarth, so naturally, they were out of the running.

“Not every client is Coles and Woolies though,” one senior marketer told me this week. “You have to be pragmatic,” they said, and not take a blanket view on things.

Would they engage an agency already working with a competitor? While they admitted it might make them uncomfortable, if the agency displayed effective ethical walls, they would be ok with it.

“You can’t contract your way into good work. Clients get the work they deserve.”

No sooner than I had heard that, I asked another marketer this week if they would be ok with their agency working with another brand in the same category.

“Fuck no!”

I suggested that ethical walls are common practice in many industries and some marketers believe they could work in this industry.

“That’s rubbish,” they responded. “Everyone talks, and you as a journalist should know that!

“How are they making sure there is no leakage?

“If there are businesses that are fine with that, ok. But the minute it fucks up, who are they going to blame?”

Speaking of leaks, while rare, they do happen. Just take the PwC Peter Collins leak that has led news this week.

There are examples, however, of brands being comfortable with their agencies working with competitors.

The Monkeys Melbourne found itself inside the Carlton United Breweries cellar door in 2020 after its client Asahi purchased the Australian beer conglomerate.

CUB then recently narrowed its roster down to two main agencies, Clemenger BBDO and The Monkeys (with a few sub brands being serviced by other agencies).

The Monkeys and Canadian Club have a successful partnership in the books

Its sister agency, The Monkeys Sydney, has helped build Beam Suntory-owned Canadian Club significant market share in recent years off the platform ‘Over beer?’.

Many clients would take issue with this. One agency (albeit separate offices, with separate teams), working on two clients in a fiercely competitive sector.

The Monkeys has flouted the unwritten rule, and that isn’t the only example.

It has been Entain Group’s (Ladbrokes and Neds) rostered creative agency for several years now, so it was a surprise when the Mark Green-headed Accenture Song was appointed as Tabcorp’s new creative and brand agency last month, splitting duties with Ogilvy as its customer agency.

I’m just going to dot the ‘i’ here and say The Monkeys is part of Accenture Song.

Entain’s chief marketing officer James Burnette told me a few weeks ago he has absolutely no issue with the new partnership, and that the brand and agency continue to be happily engaged with each other.

Moving forward? 

An industry pundit who has written about this topic in the past suggested clients need to “stop being so sensitive” about conflicts.

With bottom lines to protect, it is hard to pass up business when it stares you in the face. How do agencies generally get around this? They create more agencies. Enter the ‘conflict agency’. Which of course no one really wants to admit it is – it’s a genuine agency that has seen a market opportunity. A very specific market opportunity.

That in itself is an issue. There are so many agencies. No wonder there is a talent crisis.

Holding groups previously sneezed out new agencies anytime they needed to retain a client or add one without having to deal with conflict.

“You have agencies spawned purely for the sake of this. But guess what, they (the client) always end up moving,” one industry source said.

Some have started packaging them back up, but then this naturally leads again to the problem you were trying to solve. 

And it even works the other way. Some of Australia’s biggest brands including Optus, Telstra, IAG, Suncorp and the aforementioned CUB work with a roster of agencies, in what could be perceived as an attempt to stash them away from their competitors.

IAG splits creative duties across several agency brands

With some sectors such as financial services now so varied, it seems silly that a brilliant agency is denied the opportunity to work with a new client due to conflict.

“There’s more of them than there are of us, so we need to figure this out,” another agency boss said of a conversation they had with a colleague.

So what is the solution?

One suggestion has been for an agency to license out a campaign to a client. This would promote longevity in brand platforms, reward better work and put up barriers within the scope of work it’s creating for a brand.

Charge for longevity, value and frequency, not hours and people.

And that’s exactly what you can expect to see from Huge, according to Mat Baxter, who has launched the agency locally. 

“We want to show clients what you can get from buying a product, instead of people and hours,” he told Mumbrella.

Another option would be, as one pundit mentioned, for agencies to stand up for themselves and stop entertaining conflict as being an issue, or only accepting exclusivity with a client if it promises the same to them.

So maybe Accenture Song and The Monkeys are on to something, and the pitch to clients is that agencies can handle conflicts. But maybe it helps being backed by a company that specialises in them too.

Will more clients see the light or is the industry stuck like this? Let me know what you think.

Calum Jaspan is news editor at Mumbrella

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