Vodafone: What agency would want to work with Australia’s most toxic client?
Vodafone is once again searching for a new creative agency, continuing a pattern of ongoing reviews. Simon Canning asks whether the brand has worn out its welcome with all of Australia's ad agencies.
When it emerged last month that creative agency Cummins & Partners had parted ways after just two years with Vodafone, few within the industry were surprised.
The telco is well on its way to becoming Australia’s most disliked client, with many agencies now unwilling to put their names forward as it searches for its fifth creative agency in just six years.
And in that time, three of the incumbents have either declined to re-pitch for the business or resigned the account.
Last week saw the departure of Vodafone’s chief marketing officer, Loo Fun Chee, sparking a restructure which sees sales and marketing brought together under the leadership of Ben McIntosh.
McIntosh has been heading sales at Vodafone for the past three years after coming across from Harvey Norman where he spent 17 years, most recently as GM of the technology and entertainment division.
His appointment appears to fulfil an internal company desire to give the sales function more control over Vodafone’s marketing.
But he now oversees a pitch where a number of agencies have decided they have no interest, while others are wondering how they might break Vodafone’s cycle of dumping agencies or being dumped themselves every two years.
Despite the concerns expressed by a number of agencies, Vodafone told Mumbrella it had been”inundated” with expressions of interest and was telling agencies it was “considering a number of options including a market pitch”.
The brand may by default end up back with its global agency partner WPP, which has held the local account on no fewer than three separate occasions.
And the situation is just the best example of wider ad agency frustration with the way in which many Australia’s telcos conduct themselves as clients.
Telstra and Optus are marshalling a welter of agencies, supposedly working together in harmony, but behind the scenes often battling each other for every precious dollar of budget and every rare minute of the CMO’s time.
But Vodafone is a special case in point. Over the course of little more than a decade, the list of agencies reads like a busman’s tour of the industry. JWT, Moon, One Barrack Street (set up by STW to service the entire Vodafone account), Colenso in New Zealand, Clemenger, Host, Ogilvy and until December, Cummins & Partners.
It is a pattern of agency turnover that is unparalleled.
One former agency head put the nature of the relationship in one-syllable terms that Mumbrella chooses not to use here. Pretty much the only word in the sentence which is repeatable is “disorganised”.
He noted that the behaviour of Vodafone, constantly taking its account out to pitch, had been debilitating for some agencies.
“For Host it was a huge kick in the guts,” he said.
Host lost the business without pitch in a realignment with WPP’s Ogilvy in 2012, which also handles Vodafone on a number of other markets.
The loss – which came after the tumultuous years of the #Vodafail network debacle – saw Host having to make a number of redundancies and left Host chairman Anthony Freedman fuming.
“It’s disappointing to see a client loss as a result of a global alignment but I doubt we will be the last agency to see business lost under these circumstances,” Freedman said in a statement at the time.
In carefully chosen words, Freedman’s statement added: “Vodafone has a reputation for being a tough client and in many ways this is true.”
Host had won the business in 2010 just days after ending a successful and award-winning 10-year run with Virgin Mobile.
Just two years after its win, Ogilvy also walked away from the business when it was put back out to pitch, with Ogilvy CEO David Fox barely disguising his frustration with the brand.
“It is a very challenging category. I know our team has worked tirelessly to push the Vodafone brand forward.”
https://www.youtube.com/watch?v=_qMbHe4w2dI
Another agency head with experience of Vodafone said the company doesn’t have a clear idea of the space it is competing in.
“The reason is everyone thinks financial services and telcos are like FMCG, but they are not as organised as retailers,” he said.
“With retailers they know what they are doing a long time out and they tell you. Telcos want it fast and cheap, but they don’t know when its coming.
“It’s like drinking from a fire hydrant, its full on or off and there are too many marketing teams.
“I wouldn’t touch it with a barge pole.”
The Vodafone rot perhaps began to set in when 3 and Vodafone came together to form a single brand in 2009.
Clemenger had won the Vodafone account in 2008, and then was forced to pitch against 3’s agency, Cummins Nitro, for the merged business, emerging victorious.
However less than a year later another review was called – the third in 18 months – and Clemenger resigned the business angered at having been put through through another pitch. It would not be the last time news of the loss the the Vodafone account would be greeted with cheers at an agency.
Host emerged with the business, but two years later was stunned by the move of the account to Ogilvy in what was described by Jana Kotatko, general manager of brand and communications, as an “efficiency measure”.
One commentator on the story of Ogilvy’s win said on Mumbrella at the time: “They abandon agencies like they abandon ad campaigns judging by the plethora of mixed messages they send to market. Start your two-year clock now Ogilvy”.
They were wrong. It was actually two years and four months.
Another observer who has worked with the brand said Vodafone’s direction had been affected by the background of the marketers it used and reliance on a global template.
“They have suffered under wave after wave of non-telco marketers, FMCG marketers,” he said.
“‘Power to You’ has never been tweaked for the market. It has never reflected the local market.”
It is also a reflection of some of the broader challenges facing Australia’s telcos.
“In terms of the job, the job of the big two, Telstra and Optus, is to create confusion,” an agency veteran who has worked across multiple telco brands said.
“The job of the others, Virgin, Vodafone, is to simplify things, but they have added to the confusion.”
From Vodafone’s perspective, the failure to localise messaging has been anchored in its unwillingness to step away from the template.
“They [Vodafone marketers] all look at the Vodafone world and they brief by global work and so you can’t get anything else,” another agency head said.
“If you mention the elephant in the corner then it’s hard not to think about it. It has not been able to detach itself from being a global brand.
“With the culture internally there is a lack of knowledge about ‘Where does this Vodafone brand stand in Australia?’ It’s really sad, any challenger brand should do well in this market. There is a corrosive culture that starts from wanting to protect a business rather than grow brand.”
Agency frustration with the client may not be limited to Vodafone.
“You look at Optus and the long-term relationships,” another observer claims.
“Everyone in the village is frustrated and the marketing is fragmented. And Telstra? How quickly you forget. DDB is competing with The Monkeys and the work is what suffers. Agency collaboration is a myth.”
Another long-term agency boss summed up the challenge of working with telcos.
“It’s like having an affair with a mad woman,” he said.
“But a lot of it comes down to who you work with. All the telcos seem to attract poor marketing staff. It’s low calibre. Some of them say they are just taking danger money.”
Twice in its history, Vodafone has been used by agencies to open new offices or entirely new businesses devoted to the brand, only to see the Vodafone pitch clock count down to another review.
One Barrack Street was a bespoke offer created by STW (now WPP) for the brand, while Cummins & Partners based the opening of its Sydney office on the win.
No agencies are admitting to chasing the Vodafone account now. Not least because of the alarm it might create for staff. However, sources say a number of agencies have decided the account is simply not worth the effort.
As a result, because of its global ties, one of WPP’s myriad of agencies may well emerge with the business – perhaps by default.
But whoever gets the business, set the clock. Two years is the benchmark for Australia’s most toxic brand.
Well said. Nice to see Mumbrella taking it to poorly behaving clients, not just agencies…
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Sadly there is always some desperate and deluded agency who thinks they can handle it. It is a useful signal to potential clients : if an agency touches it don’t touch them.
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I agree with @Jon. Nice to see some journalism that is focused on those that are not doing the right thing in our industry, as opposed to slagging the good guys (as was the trend in the old days). Mumbrella really has picked up it’s game I think.
It is sad to me to see an agency invest so heavily in setting up an office just for this client and then be shafted like this, on more than one occasion.
I certainly think that relationships with agencies can be coached to be improved collaboratively, without having to re-pitch all the time. What a cost to everyone, including the brand – especially to the brand.
Seems straight forward to me… consolidate your operations and communications in house (between sales and marketing), determine a strategy for the brand and products (including responsive and defensive retail strategies), get all the suppliers on board to execute, stick to the plan.
Perhaps it all drills down to leadership? In all my time as a business coach for our industry when I’m called in to ‘fix the business’ it is nearly always management and leadership that need the work. It all comes from the top, down.
Time for business leaders to question their approach, rather than their agency. It may be an agency model isn’t right also.
Hope others learn from this too. Problems with the agencies are really just the symptom.
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Well done on calling Vodafone out on their behaviour, as an agency person, their name makes my heart sink.
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The track record of dumping agencies is longer than you reference if you review the multiple agencies 3 worked with from its launch in Australia through DDB, who it dumped after two years, and then the procession of agencies that followed. 3 obviously merged with Vodafone in 2009, with the management of 3 running the new entity. I believe it’s 3’s culture and operational ethos that has defined the way the company has treated its agency partners since.
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The most disprespectful client to work for.
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@James
I worked with Voda long before the 3 merger. Over a 3 year period they had 5 creative agencies. One time someone at Voda asked me to recommend a PR agency. I told them that I honestly couldn’t think of anyone they hadn’t burned already. So this is something that’s been going on since they came into the market and seems to transcend whoever is leading things at any given moment. It’s something embedded into their culture and how they work with suppliers which yes, was chaotic and lacking any long-term vision. Being terrible is the only thing they’re consistent at.
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The short lived stint with ‘Brain Surgery’. 1 x $1 million dollar ad later…
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The courage to sack a client is the one true test of an agency’s culture and integrity.
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Kudos for refusing to repitch a client that treats agencies so badly.
I worked at an agency that pitched for this client – and even from the very start of the pitch the staff were told that they were pitching despite the reputation of the client… and partly because they were promised improvements in how they work with agencies.
Clearly that hasn’t yet materialised. Which is sad, because versus Telstra and Optus there is a huge opportunity for the brand – if it could just start working like a decent company instead of a continuous clusterfuck of calamities.
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Vodafone have their name on everything and anything to the point their brand doesn’t mean anything …
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Don’t worry, there’ll be no lack of competition for the business, nomatter the past form. it’s all about the money, honey.
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So clearly can’t work with their customers or their agencies. Good job Vodafone.
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Vodafone just need to remember the venerated prophet Buddha’s words:
“Try not to be a c * * t”
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Based on this article, it seems almost irresponsible for an agency head to take on Vodafone given its proven culture-killing prowess.
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I prefer Bill Bernbach’s approach:
Life is too short to spend it working with bastards.
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I can’t speak of the current team, but I’ve worked with the VF team at a point in time and been involved in one of the transitions the article refers to.
It was an incredibly toxic culture. We lost some good people along the way as their self respect and sanity was worth much more than working through the daily berating and shrieking down the phone.
A few years down the track… a little older and wiser… I would urge my agency to avoid responding to VF briefs – it’s simply not worth the bodycount.
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Vodafail is bad, but its not the only one in the industry. If there was a vote for worst clients (now there’s idea), Optopus and Hellstra would be high on the list. Highly competitive, ever changing CMOs, plenty of cash – a recipe for destructive, disrespectful behaviour
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Vodafone’s issue is that they focus on exclusive offers and require speed to market to compete with the other telcos. This is pressure that the product managers push onto their marketing managers who in turn push the agency to breaking limits. Instead of partnering with a production house, they partner with big creative agenicies and burn them out with insane deliverables and time frames.
Vodafone – get a production house to do most of your work. If you get an agency, leave them to the TV and photography.
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And let’s not forget Voda and Lowe Hunt’s falling out, with a rescue from then sister agency Draft Worldwide and their successful “Go there” campaign…
they get overcharged coz they do
they fail to say one thing well
they don’t get their target audience
that said, I’d go there again but I’d want Russell H beside me
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I thought media agencies were there to help clients solve problems. It seems some here are more interested in scoring points for themselves or others to review how clever they are.
The last few years have been difficult for Vodafone as a result of poor network / infrastructure planning and investment combined with the rapid take off of smart phone data usage.
In essence too many customers, not enough capacity combined with a price position which meant its difficult to charge what’s required to invest in network.
Telco marketing is immensely difficult as you look for a balance between product (network, handsets, bundled value) and price (revenue, profit etc), non-linear capex investment etc. Trying to grow or maintain ARPU while hitting GA / churn numbers, responding to competitive pressures and then finally developing a brand / call to action plan that you can leverage through your disparate sales channels.
How many “marketers” from media agencies truly understand the challenge of telco? How many are truly looking to help their customer solve problems?
Since we’re into predictions, here’s mine. Vodafone will find a new lead creative agency. I don’t know any agency MD / CEO who could report back to Europe / North America that they didn’t pitch for work because the client is too hard to deal with (sic).
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You seem salty, how is working at Vodafone working out for you?
You are kidding yourself if you think a media agency is going to have the intimate knowledge around telco challenges that you speak of.
“Trying to grow or maintain ARPU while hitting GA / churn numbers”
Geez, you have some 20 yr old agency kid building your plan, he/she doesn’t care about your ARPU.
You said it best yourself, the last few years have been a disaster for Vodafone. I jumped ship and couldn’t be happier, I’ll never return as the bridge has been burnt.
A disaster for agencies, a disaster for the consumers of Australia.
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Of course they’ll find an agency, but they’ve alienated themselves from many of those with the best talent. They’ve also likely ensured that any agency willing to take that gamble would be hard on negotiations to ensure they don’t get decimated when the inevitable happens.
Of course telco business is hard, but ALL business is hard. Agencies are there and (mostly) willing to work hard and late hours to help their business – they just have to let the agencies do their job properly and not treat them like dicks.
Agree with the logic above of using an agency for big work and using a production house for quick materials.
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I think the only agency to have a long term relationship with Vodafone was JWT and RMG Connect – 4 years
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There are plenty of fast, responsive retail clients out there that get this right. In my experience banks are one of the fastest retail businesses, despite what they seem. Political campaigns and Electoral Commission, too. They don’t all act like this. Some of them get it right and do it well. I’ve worked on massive volume based executions on many large retail businesses, at one time the most in Australia by a single agency, and I can’t say any of them behaved like this. We put in place some great work that allowed for responsive activity, and remained on strategy. It is do-able.
A production solution is important, but it needs to be strategic or it is hit and miss, even exacerbates the problem in my experience. Going direct to a production company equally has flaws.
It may be time for a new model here.
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Good call @I wonder
It is a repairable situation for the brand.
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Given Ben did 17yrs at Harveys, would not be surprised to see the volume-based, work-a-day retail marketing be carved out to some form of dedicated in-house production solution a la GP.
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I predict, Core, will win this piece of business.
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Since when was GP a production house? That being said I wouldn’t be surprised if it does end up there as they are part of WPP now. GL to them.
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Vodafone + Ogilvy has done some tremendous work in India including some of the best campaigns that global advertising has seen (Network and Zoo Zoo’s). I then wonder why their marketing leadership team is not able to work cohesively in a market like Australia which is relatively less diverse (language and culture per se) compared to Indian market which requires national a campaign to be as diverse as 20+ different cultures and a minimum of 8 mainstream languages. It seems the agencies here are fair to say what they’re saying here however; Vodafone team seems to have missed and continue to miss a huge marketing opportunity if at all they can work together with an agency full of talents that can truly bring a huge turn-around for any brand. As for the work volumes, now-a-days, every sizeable company requires midnight oils burning. Just a bit of human touch to this working style can really do wonders.
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Worst clients in Australia?
1/ Lion
2/ Vodafone
3/ Tobacco
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Ahh the silent Monk ad.
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You sir / madam, are clueless. Either a Voda marketer, or another terrible client.
If the telco space is so unique – which I’d suggest banking, insurance, QSR and retail are all equally nuanced and complex – how would changing agencies every year help resolve this? Or treating agency staff like shit and having them leave?
Look at it this way, if I got married and divorced five times in six years, it would be a certain sign I’m a massive arsehole. Equally, Voda is an evil, arrogant basket case.
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Couldn’t be further from reality. Vodafone group cleaned out the remaining 3 executives when it installed Bill Morrow as CEO back in 2012 and since then the company has being running under instruction from Vodafone group. The irony is that if Vodafone group had stuck with the 3 network and the 3 culture the subsequent network disaster of the Vodafone network never would have occurred which would then have meant a very different marketing approach.
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Dear I Wonder,
I think you’re right that it is hard to report to overseas HQs that an agency won’t pitch for a client that’s ‘hard to deal with’.
But the behaviour of Voda reported is far beyond that.
Agencies are getting better and better at recognising the indirect costs that come from staff churn and dissatisfaction. I think there’s evidence enough to support a no-pitch decision on Voda that HQ would support.
As for the criticism of the media agency, well all I can say about them not understanding your problem is that you’ve not invested the time to share it. Every media agency I’ve worked with is very keen to understand the problem, and maybe it’s to show how smart they are, but that’s another problem altogether.
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Worst client I’ve ever worked for…… ever.
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We got in touch with Vodafone, only because the same agencies mentioned above are equally notorious in their own ways. Just because an agency’s work is high profile, highly awarded and you senior management are great at PR-spin, doesn’t mean you’re not an operational shit show with wide ranging talent issues too. Too many agencies sow their own discomfort by staffing the account with junior AMs and creatives that treat retail work as funding for award fodder.
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To works both ways
You’re an idiot.
When an agency decides to take on Vodafone staff, build a bespoke offering for the client and put everything on the relationship being successful…i think your points are arrant nonsense. Dont guvebthis client the benefit of the doubt…too many agencies have suffered at their hands
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in my time in the industry, the only client that would be in the argument with Vodafone would be Westfield.
plenty of other difficult clients in challenging categories, but neither with such a widespread history of toxicity, bullying, disorganisation and promiscuity
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I’ve worked on both. Vodafone were worse.
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Agree
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“…a continuous clusterfuck of calamities.” < Best.
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@ Works both ways : You got in touch with Vodaphone? If the worst client in the country doesn’t want to work with you what does that say about you?
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I am so glad this article was written. Having always worked publisher side, I haven’t been directly subjected to the mess that is Vodafone, until last year.
We watched them rip shreds off Bohemia, have unrealistic demands and be so disorganised and unaware of the media landscape. I felt so sorry for the media agency – we were made to work directly with Vodafone and bypass the agency.
It makes it hard for people agency/publisher side to create/implement great campaigns when the people on the approval end 1. have no idea how media works 2. lack basic respect for other people.
To the creative/media agencies they have pulled down with them – I high five you for hanging in there.
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What a crock @Mitch … When 3 Merged with Vodafone, which was almost a reverse takeover, the then 3 execs ran a gourmet restaurant like a local fish n chip shop and ran both the network & the brand into the ground. It has sadly never fully recovered from the bad taste/experience it left in the mouth’s of users, due to the ignorance of those in charge at the time … My comments are specific to brand damage & network failures, not marketing specific, but you can put lipstick on a bulldog & it’s still a bulldog, so marketing (& agencies by extension) are then in the unenviable position of trying to repair damage created by the poor management of other key areas, departments & management of the business
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I agree! They tried to partner with agencies pre-2009, then it went downhill. The fact that it’s a global brand but the business in Australia is only 50% owned by Vodafone Group further adds to them being confused about who they are as a brand, which is reflected in the advertising.
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The only telco’s that have had any moments of good advertising and the most days of positive agency relationships are O2 in UK, Voda in Germany, AT&T in US, and Vimpelcom in Russia. Everyone tries to copy them as quickly as they can, with no success. By and large, telco’s hire process flunkies and money-chasing agencies. It’s up to you to deliver on the brief.
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Vodafone’s business across marketing and everything else in there is just beyond horrendous. Would tell every person, every agency and anything that comes in close contact with them to BACK AWAY! Wouldn’t do any type of business with them EVER. Worst Telco by far!
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