There was a certain irony in New PHD setting up a joint venture media planning outfit to win new business in the same week it lost most of the planning for key client First Direct.
The new operation, called Media Science (or MSc for short), is a 50:50 venture between New PHD and Partners BDDH, and has just picked up its first piece of business – media planning for BDDH’s car account Mercedes. It will be located within BDDH’s new offices just off London’s Oxford Street (MW October 2) and both investors are currently recruiting for an agency head.
The benefits of MSc to BDDH are clear. It has no in-house planning capability and in the past has had to work with a string of media agencies, including New PHD. As managing director Nigel Long says: “It is something we’ve been thinking about for three years. When it comes to pitching it helps to have someone in the loop on the planning side.”
In other words, in-house planners are a great new business tool.
Of all the agencies it could have linked with, New PHD is the most logical fit. It is strong on planning, in expansion mode and Long used to work with New PHD managing partners Jonathan Durden and David Pattison at White Collins Rutherford Scott (later to become WCRS).
Until this week the advantages for New PHD were less obvious. In the past the agency has not had any apparent problems convincing clients it can work on conflicting accounts. After all it had four banks – First Direct, Midland, Hamilton Direct and Prudential Bank.
But in the case of First Direct, client conflict would seem to be the key reason why New PHD was dropped from its strategic planning business, although the company remains tight-lipped. As New PHD has kept the buying on the account, First Direct is obviously not dissatisfied with the agency as a whole.
Durden says: “We are being kept on for part of the planning. By taking on Michaelides & Bednash for media planning, First Direct is just adding to the talent pool.”
He says New PHD’s involvement in MSc is part of its expansion plans for the agency. “We are looking to set up companies which accurately reflect the skills of New PHD. We’re not the Spice Girls – we are not just spreading ourselves around everywhere,” he says, adding there will be another launch or joint venture from New PHD at the start of next year.
“To be a real player in planning and buying you need to be a certain size. Then you can achieve economies of scale and afford research tools. You cannot be sizeable if you can only take one product per category. Organic growth is not fast enough and so we are interested in these joint ventures,” he says.
But one observer from another media agency comments: “It seems rather bizarre. Clients do not know what they are getting. In fact, all they are getting at the moment is a recruitment agency for media planners. And if they thought they would be tapping into New PHD’s car expertise, it will all have been borrowed from another car – Volvo.”
Oliver Johnson, Mercedes general manager for passenger car marketing, says: “I do not really think it is a risk. We will make sure we are getting people we want to work with and I think it unlikely that Leslie Butterfield and Nigel Long would employ dumbos.”
The creation of MSc fuels the old debate of whether full-service agencies are superior to specialists – MSc is a hybrid. BDDH claims the structure of MSc is unique, but says it is most similar to Michaelides & Bednash and its relationship with HHCL & Partners (M&B is a 50:50 joint venture with HHCL).
Andy Tilley, managing partner of strategic planning agency Unity, says: “It is just another agency which has realised that you need media as part of your strategy.
“But what clients want is independent advice which is neither linked to the creative or the trading side. You have to look at whether this sort of agency will be giving impartial advice.”
Observers argue that however good a creative idea is, it is useless if it cannot be implemented, so it is better to have the media planner on board from the start. But others say the more logical split is between creative and media, and if you start splitting media planning and buying, planners become too isolated from the day-to-day workings of the market.
Nick Manning, partner at Manning Gottlieb Media, says: “There will always be a problem for the client in splitting planning and buying, especially if an agency loses the planning side, because it will always want to have a hand in it.”
Long insists that MSc will be a separate agency with its own management, though he refuses to divulge who will head it. However, if MSc staff become a part of BDDH’s brand teams, they will not be able to pitch for business as a standalone agency if there is conflict with BDDH’s existing client list.
Both Long and Durden deny reports that MSc has any clients other than Mercedes at this point. Whether it will win any others – and it is said to be pitching for another major piece of business at the moment – may largely depend on the calibre of the people it recruits.