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.

From Karen Howe’s dining table: Creativity, COVID and Cannes

ICYMI, The Township's founder gathers the best of the best campaigns and trends so far.

Cannes Base Camp

By Karen Howe

I’m attending Cannes from the glory of my dining room table. There’s not a palm tree in sight, yet inspiration and intel are present in abundance.

Cannes Lions is a global cultural pulse check. The social course correction in the wake of the murder of George Floyd and BLM has delivered far greater diversity in the judging panels as well as the work. And we are all better for it.

I’m proud to say that creativity defeated COVID, which speaks to its power. Great work and big ideas flourished, despite unimaginable odds.

The work from the past two years spans a vast emotional range. From the profundity of Dove’s “Courage is Beautiful” to the hyper exuberance of Burberry’s “Festive,” they are opposite ends of the spectrum, but each answered a need in us.

Take note, the ascendency of gaming cannot be understated. Smart brands have embraced the channel. It makes sense, because gamers participate to meet others around the world, not just to play. And they represent a huge and powerful community. That’s why QSR Wendy’s gamified their iconic gal in RPG’s Feast of Legends.

Burger King sponsored the unknown Stevenage Football Club, transforming the team into online heroes and vaulting BK into the fray at the same time. Once again, the brand embedded itself in culture.

The birth of gaming tourism arrived when Xbox snuggled up to travel guides and created a brilliant baby: a travel guide for gaming worlds. It, too, embedded itself in culture.

From the standpoint of social good, Reporter Without Borders showed how it worked with Mindcraft for its “Uncensored Library” to bypass press censorship, with Minecraft providing a loophole to a space where young people could be educated. It provided youth with a powerful tool to fight oppression: truth.

COVID changed us in unexpected ways. We learned how to pay attention again and there was a notable lack of 30-second commercials. Instead, longer format content thrived. Apple’s WFH was seven minutes long. Entertainment reigned king, so we find ourselves returning to our advertising roots.

Seeing competitive brands form partnerships was one of this year’s other great surprises. The brilliantly simple “Beer Cap Project” by Aguila to reduce binge-drinking saw the brand reach out to competitive beers to join in. Aguila put incentivizing (keyword: free) reminders to drink water, eat food and get home safely on its bottle caps from all sorts of fast food chains, ride-share co’s and H2O brands.

On a personal level, I’m so proud of Canada again this year. Given that it was two years of work from all over the world being judged, even making the Cannes shortlist was an accomplishment. Canada is herding in the Lions in tremendous numbers – and it’s not even over. Fingers are crossed.

KAREN-HOWE-PIC-higher-rez-300x263Karen Howe is a Canadian Cannes Advisory Board Member and founder of The Township Group