JWT’s Krupski on Shoppers

Seldom do advertising accounts of the size and scope of the Shoppers Drug Mart chain come up for grabs.When it became known in the spring that Shoppers was reviewing its estimated $20-million national advertising account after about 30 years with Kert...

Seldom do advertising accounts of the size and scope of the Shoppers Drug Mart chain come up for grabs.

When it became known in the spring that Shoppers was reviewing its estimated $20-million national advertising account after about 30 years with Kert Advertising, it appeared as though this would be a frenzied affair with the usual speculation and insider gossip involving Toronto’s top agencies.

But, in fact, the review has been handled relatively quietly. And some of the agency names that had been expected to surface never did.

In part, it may be because that is the way Shoppers wanted to handle the situation, but it also may be due to the increasing competition between retailers and manufacturers in the marketing of branded products.

That is how it became viewed by J. Walter Thompson, as the agency – one of four on the list – headed into the final stages of the review.

JWT, which is national brand agency in Canada for Pepsi, could see a direct conflict with Shoppers’ Life cola brand.

In the following interview, Andy Krupski, jwt president and chief executive officer, explains why his agency withdrew from the competition.

‘We found the Shoppers Drug Mart people to be really terrific, both in what they represent and what advertising means to them.

‘But as the review unfolded, it became clear that we were talking about marketing the Shoppers Drug Mart brand, which is made up of private label products. We could see potential problems with that. Then they launched Life Cola.

‘At that point it became really clear to me that J. Walter Thompson needed to decide what it wanted to be. Our job has always been to build clients’ brands at the expense of their competition, and it is becoming clear that that competition comes from the retailer.

Investing time and money

‘Here we are publishing white papers on how to combat retailer brands. We’re investing all this time and money to understand what to do about consumer brands and how to help our clients win against private labels in the marketplace.

‘To have one side of the agency working on that premise and another side working on doing different things that would support a company that has a successful private label program seemed to smack of – aside from pure conflict of interest – a question of integrity.

‘At the end of the day I said, `I think we have to pick sides.’ We thought it through carefully and decided, `Great opportunity, probably the single largest opportunity that will come by in 10 years. Wonderful client, great people. But, ultimately, if we were the agency when Life Cola had to be launched we would be in an incredibly compromised position.’

‘So I met with the Shoppers people and I said, `I would love to be your agency but I don’t think we could give you the kind of counsel you really need. We would always be tempering our perspective based on our client base and that’s not the kind of counsel you should have.’

‘I think more agencies are going to have to make similar choices. The answer is to pick what you want to do – whatever you feel can make a difference – and then do it really well.

Work to understand

‘In our case, we work hard at understanding the consumer and their points of view on brands and we use that insight to help our clients build their businesses.

‘I think that if, psychologically, everything you do is built around building national brands, it becomes very difficult to do the same kind of job for retailers’ brands, whose basic role in life has been to create a cheap product in terms of cost and market it to the consumer on a value premise.

‘Advertising is a business where, to a certain degree, you have to specialize. That’s not saying we wouldn’t do integrated marketing. But in our case we have a huge client base whose businesses are being threatened by private labels. For their agency partner to turn around and say we’ll help you over here, but we happen to be helping another person over there who can actually hurt you … philosophically, I find that very difficult to do.

But in terms of our core agency, I think you have to decide what your strengths are. Where your emotions are and what you care about. When you try to be all things to all people, you are prostituting yourself to a degree. There comes a point when you can’t serve all the customers and you have to make a choice.

‘The late eighties and the early nineties have been tough on agencies. The focus has been on just getting the work done, with fewer people and a lot of restructuring. You tend to forget what it was that got you into the business in the first place, which was to craft great communications programs and to build businesses for your clients.

‘I think agency people have made it collectively tougher on ourselves and have lost our way a bit. Everybody has beating up on advertising, saying that television isn’t going to survive because of Death Stars and direct marketing is taking over.

‘If you really think it through, yes there are more media opportunities, but advertising is – in whatever form – still the most efficient way to talk to your customers. And if you do it really well it becomes even more efficient.

‘People haven’t lost sight of that in Europe, in parts of the United States, and anywhere where great advertising continues to be done.

‘Also, and this may sound a bit corny or old fashioned, but you’ve got to believe in your clients’ products. If you do buy into that, emotionally, then you look at your clients’ competitors as your competitors. As we move towards knowing our client’s business more and better than even they know it, then it stands to reason that we’re going to be as angry as they are about their competition.

‘A body of thinking suggests that in Canada, where retail trade concentration is very high, more people will be making decisions such as ours. It will occur in the area of distribution partnerships. You can’t continue to serve competing distribution systems which tend to drive down the price and value of what you market.

‘There will be new alliances such as those now occurring in the food service world, where certain chains sell Pepsi, and others sell Coke. In this era there may well be a new role for agencies in understanding broader issues, such as distribution systems, to help in developing better and smarter marketing plans, because that’s really what it’s all about.’