The changing shape of Adland

Brent Smart. Photo / Richard Robinson

Never mind the slick world of 1960s New York depicted on TV's Madmen, we have our very own version of Adland in this country.

The martini lunches are rare and you won't see an ashtray, but the industry is a highly competitive battleground.

This week top agencies Saatchi & Saatchi and Colenso BBDO both revealed big changes to the upper rungs of their management.

It has emerged that Saatchi & Saatchi chief executive Andrew Stone and executive creative director Mike O'Sullivan - aka Rocky and Mike O - are both negotiating exit packages with global president Kevin Roberts.

Over at Colenso BBDO, managing director Brent Smart is stepping down after five years to work at Colenso's sister agency BBDO West in San Francisco.

Saatchi's New Zealand operation - which holds a special place in the global empire because of Roberts' own branding associations and affinity with this country - is facing difficult times.

There have been tensions with the country's biggest advertiser Telecom, an account that dates back to the days of ad favourite Spot the Dog. Telecom delivers more than half of Saatchi's revenue.

Despite industry talk, Telecom says there have been no moves to put its account out to pitch. But the telco says even if there were changes planned Roberts, a Telecom board member, would not have a role in discussing the issue.

Another longtime client, Television New Zealand, has already left, shifting to Aim Proximity, the direct marketing arm of Colenso's owners the Clemenger Group. That move marked a shift in the balance between Saatchi and Colenso.

Colenso, which made a name for developing and maintaining indigenous Kiwi advertising culture - is on a five-year high, says founder Roger MacDonnell.

MacDonnell left Colenso last year and removed his last ties with Clemenger only weeks ago.

The two agencies have ebbs and flows in their creative output and it's doubtful MacDonnell would ever claim outright victory over Saatchi.

"I always used to worry hugely about being on a high - there is only one way to go after that, which is down. It is a matter of maintaining that," he said.

MacDonnell - whose affable but speak-your-mind style is said to suffuse Colenso's approach to advertising - is quoted as saying that the time for change is the good times, not the bad.

Now MacDonnell's protege Smart - who has led Colenso through these golden days - is heading for San Francisco.

New Zealand has a strong tradition of advertising creativity based partly on the willingness of marketers to take risks with ad campaigns. But it is also built on Colenso and Saatchi & Saatchi rivalry.

The imminent departure of Saatchi's Stone and O'Sullivan is a big event. Both men are steeped in the adverting and corporate worlds, as is Saatchi itself.

The Saatchi & Saatchi Wellington agency in the 1990s marked a high for creative advertising. Campaigns such as the bungy fisherman brought global accolades. But extraordinary creative talent gave way to hubris and the agency lost its mojo.

Kevin Roberts - a former Saatchi client at Lion Breweries before being poached by Saatchi's global office - has given New Zealand a special status inside the group.

Roberts hand-picked his former Saatchi account director - Stone - to lead a renaissance at the agency.

In turn, Stone hired Irishman and former Colenso BBDO creative boss O'Sullivan to lead the creative charge.

That he did with campaigns such as the Tui beer commercials (featuring a bevy of babes working at the brewery in Mangatainoka) and ads for Toyota. There was a sense that Saatchi had lifted its game from a nadir back at the start of the decade.

But was it enough? Stone will not comment about talks with Roberts or the future for himself, O'Sullivan or the agency.

With ad executives holding intimate details of clients' long-term marketing strategies, generous severance pay and gardening leave are an integral part of Adland.

With the two men's prestige and corporate contacts, nobody expects they will be out of pocket.

Interviewed this week, Stone would not comment about the scale of the change. He talked about the wider upheavals for the advertising and media industries - the complexities of agencies reaching people and keeping a lid on costs.

All of this sees agencies trying to squeeze more work out of advertisers, who are looking for savings.

"I think it's an amazing time," The changing shape of Adland

Stone said. "Media are becoming more diversified.

"I still believe Saatchi has the X-factor. It is an incorrigibly strong brand. If you ask a member of the public to name an advertising agency I think that most will say Saatchi & Saatchi."

He says digital technologies such as search engine marketing will become hugely influential.

"But we are still telling stories. It has been effective for five centuries and will be in five centuries' time."

MacDonnell says he respects Stone. "You would never underestimate Rocky as a competitor. His greatest quality is that he is absolutely tenacious.

"But I cannot help but think that they have lost their way in the last little while."

Smart has also been driven by the rivalry with Saatchi and says they are an unbelievable adversary.

"But I think that the work should be better on the big brands," he said.

The best work recently had been a new series of ads for Toyota that was likeable but not ground-breaking, Smart said.

Ad agencies will point out that an agency's output also depends a lot on the attitude of clients.

Big agencies such as Saatchi have decades-long relationships with clients. When clients go through periods of changes - as Telecom and Television New Zealand have recently - they risk being perceived as part of the past and not the future.

Going back to the days when Saatchi & Saatchi controlled more than half of the advertising media spend, TVNZ seemed to rely on the agency which produced lavish and expensive promotions.

But there had been frustration also with Saatchi's approach to change.

TVNZ went straight to Clemenger Group and the direct marketing arm, Aim Proximity, without a competitive pitch. Then it moved brand promotion to Colenso BBDO.

Likewise, Vodafone started with Aim Proximity -- then moved its brand advertising to Colenso BBDO.

Smart has a reputation for being focused on the creative product - the ads. But, like Stone, he is obliged to work on the big questions about the business model and how the business is funded.

TVNZ has led a push away from commissions for money spent on ad time, hastening the shift for agencies to charge one-off fees.

"Clients paid for ad work by commissions. We got paid based on time, as opposed to the value of our ideas," Smart said.

"The only problem with fees is that you get rewarded the same amount for ideas that last six months as you do for those that last five years."

The industry is busy trying to work out how to make a buck in the new digital world. But the strong rivalry between Saatchi and Colenso shows that in a small country, intense and sustained competition can maintain world class standards.

NEW ZEALAND'S MADMEN

Roger MacDonnell

Colenso founder and 40-year veteran of the New Zealand advertising business. A straight-up style is at the heart of the Colenso culture. MacDonnell cut his last ties to the group last year and his protege Brent Smart maintains the charm factor.

Jim Moser

Numbers-focused chief executive of Clemenger's New Zealand operations with 15 companies. The American-born Australian is steeped in the world of Colenso's Aussie owners. Moser took on the daunting task replacing MacDonnell.

Brent Smart

The Aussie managing director of Colenso is confident, direct and amiable with a self-deprecatory streak that has made him popular with clients and staff. A protege of MacDonnell's, one client said Smart did not have such a great rapport when he took over. His departure will remove some of the colour and flair from the agency - a deficit Moser will need to address.

Kevin Roberts (KR)

The highly engaged Englishman- turned-New Zealander is Saatchi & Saatchi's global president. He holds special interest and affection for the New Zealand operation. The former Lion executive was a strong admirer of then account director Andrew Stone, and picked him to revive the agency that had fallen on tough times three years ago. Based in New Zealand for part of his time, staffers will be waiting to hear his next move.

Andrew Stone (Rocky)

Soon to step down as CEO, Stone - or Rocky - was the right man at the right time to boost Saatchi and repair damage from a period of introspection in the early 2000s. On the face of it Rocky is conservative, but he is respected by clients and through various roles - at Saatchi and elsewhere - has an impressive network of business contacts. MacDonnell described Stone as 'extraordinarily tenacious".

Mike O'Sullivan (Mike O)

Irishman who made his name as executive creative director at Colenso BBDO with the Air New Zealand campaign and whose appointment was a key part of Saatchi's revival.

Loves fishing and a laid-back lifestyle, wearing jandals to upmarket restaurant appointments.

He is highly focused with a knack for surrounding himself with talented offsiders.

BRAND WARS


SAATCHI & SAATCHI


Part of global advertising group Publicis.


Top campaigns:


TUI. The Jack-the-lad beer brand featuring a brewery staffed by gorgeous women is classic Mike O'Sullivan fare. Likeable, laddish and with a laugh along the way.


TELECOM. The Richard Hammond ads for XT mobile was most hated in the Fair Go commercial competition. Optimists will say the award proves the ad has been noticed.


TOYOTA: A new campaign has launched with old-fashioned folksy charm - including a flying fox.


COLENSO BBDO


Part of Clemenger Group and linked to the BBDO network of advertising agencies.


Top campaigns:


VODAFONE. The biggest and most significant win for Colenso. The "fold" ad has been a big hit and is being used by Vodafone in eight countries.


FRUCOR: A new campaign for energy drink V, featuring people with a jet backpack, has attracted a strong reaction online.


YELLOW: An account win from Saatchi & Saatchi, the ad campaign features a treehouse restaurant built using Yellow Pages contacts.