Sprint/BBDO parting raises conflict issue

The abrupt split between Sprint Canada and its newly hired agency of record BBDO has put the spotlight on the whole issue of client conflict - an area of growing concern for the industry in an era of widespread consolidation....

The abrupt split between Sprint Canada and its newly hired agency of record BBDO has put the spotlight on the whole issue of client conflict – an area of growing concern for the industry in an era of widespread consolidation.

Sprint, which made the announcement on April 12, just weeks after awarding its creative account to BBDO, cited "competitive changes in the telecommunications environment" as the reason for the parting of ways.

The move was prompted by the news that one of Sprint’s major competitors, Telus, plans to purchase a majority stake in QuebecTel. The QuebecTel account is handled by Montreal-based PNMD Communication, which is part of the BBDO network.

Vickers & Benson, which already handles Sprint’s Internet and direct response business, has been awarded the balance of the creative assignment, including business and residential voice services and small business.

At the same time, Sprint announced that it was moving its $16-million media account to Genesis Media from incumbent Harrison, Young, Pesonen & Newell, following a review.

Mike Fyshe, president and CEO of Toronto-based BBDO, says it was his agency that initiated the split.

"Obviously, BBDO and PNMD share a number of clients," he says, "and therefore it created a conflict where we had to favour the incumbent client."

BBDO also has other ties to Telus, Fyshe adds. OMD Canada, the agency’s media management division, handles the telco’s $50-million media buying account. And some of the Telus creative business is with two of BBDO’s sister Omnicom agencies in Vancouver: Palmer Jarvis DDB, which handles the $30-million consumer creative assignment, and Lanyon Phillips Communications, which has the $15-million wireline business creative job.

With more and more consolidation taking place, in both the client and agency worlds, some industry executives say the potential for these kinds of conflicts has increased greatly.

In some hot categories such as financial services or the dot-com business, for example, it’s almost impossible to find an agency that doesn’t already have one such client on its roster. In years past, agencies might have created spin-off shops to get around conflicts, but that remedy has become far too expensive for most to even consider.

Jim McKenzie, president and CEO of Toronto-based Leo Burnett, says the whole client conflict situation may be further complicated now that a number of major Canadian agencies have moved to spin off separate media management companies – although that has not yet been seriously put to the test.

Leo Burnett, for example, established its standalone media division, Starcom Worldwide, last year. What would happen if Starcom took on a client that competed with one of Leo’s? Obviously, McKenzie says, the agencies would have to be able to assure the clients that there was "total separation" between them.

Conflict is a challenge to deal with, he adds, because it can be as much an emotional issue as a pragmatic one. Clients are, naturally, concerned about compromising confidentiality – but they also object to the idea of their agency getting revenue from a competitor.

"Each category has its own peculiarities as relates to conflicts," McKenzie says. "Ultimately, the client determines what the rules are and, within reason, you have to live with them."

Domenic Caruso, president and CEO of Toronto-based MacLaren McCann, says there needs to be a more relaxed view on conflict if clients want to be able to work with their agency of choice.

That’s already happening in some international markets, he says. In Japan, for example, agency consolidation has reached the point where Dentsu now controls the lion’s share of the country’s advertising business. And because Dentsu is deemed the best shop around, clients are willing to put up with the agency also working on competing accounts – provided that the different business groups are rigorously kept separate.

In Brief: The Garden picks CDs to take on daily creative leadership

Plus, Naked names two new leaders of its own and Digital Ethos comes to Canada.
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The Garden promotes two creative directors

ACDs Lindsay Eady and Francheska Galloway-Davis have taken over responsibility for day-to-day creative leadership at The Garden after being promoted to creative director roles.

The pair will also help develop the agency’s creative talent, formalizing mentorship and leadership activities they have been doing since joining the agency four and three years ago, respectively. In addition to creating the agency’s internship program, the pair have worked on campaigns for Coinsquare, FitTrack and “The Coke Challenge” campaign for DanceSafe.

Eady and Galloway-Davis will continue to report to The Garden’s co-founder and chief creative officer Shane Ogilvie, who is stepping back from daily creative duties to a more high-level strategic role, allowing him to focus on client relationships and business growth.

Naked Creative Consultancy names new creative and strategy leadership

Toronto’s Naked Creative Consultancy has hired Yasmin Sahni as its new creative director. She is taking over creative leadership from David Kenyon, who has been in the role for 10 years and is moving into a new role as director of strategy, leading the discipline at the agency.

Sahni is coming off of three years as VP and ECD at GTB’s Toronto office, where she managed all the retail, social and service creative for Ford Canada. She previously managed both Vice Media and Vice’s in-house ad agency Virtue.

Peter Shier, president of Naked, says Sahni’s hiring adds to its creative bench and capabilities, as well as a track record of mentorship, a priority for the company. Meanwhile, Kenyon’s move to the strategy side, he says, makes sense because of his deep knowledge of its clients, which have included Ancestry and The Globe and Mail.

Digital Ethos opens a Toronto office

U.K. digital agency Digital Ethos is pursuing new growth opportunities in North America by opening a new office in Toronto.

Though it didn’t disclose them, the agency has begun serving a number of North American clients, and CEO/founder Luke Tobin says the “time was right to invest in a more formal and actual presence in the area.” whose services include design, SEO, pay-per-click, social media, influencer and PR,

This year, the agency’s growth has also allowed it to open an office in Hamburg, Germany, though it also has remote staff working in countries around the world.

Moray Hickes was the company’s first North American hire as VP of sales, tasked with business development in the region.