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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.

vodafone-logo

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.

Ben Macintosh to head newly merged Vodafone sales and marketing unit.

Ben McIntosh to head newly merged Vodafone sales and marketing unit.

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.”

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”.

The commenter

The prediction wasn’t far off

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.”

Vodafone Nova

Vodafone has been accused of being too tied to a global template.

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.

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