Client bias causes a greater conflict

Conflict is always an issue for advertisers, who seem to be much tougher on creative agencies. Such discrimination may not last. By Amanda Wilkinson

Conflict of interest has always been an issue for media and creative agencies, but the different way in which clients treat the two types of agencies is becoming ever more pronounced.

Advertisers appear to take a more relaxed view on conflict in relation to media agencies than they do creative. Media agencies have been able to manage numerous financial services brands with overlapping interests, while creative agencies could only ever hope to handle one bank, one insurance company and possibly an investment house.

By ensuring that there are separate planning teams on conflicting pieces of business, PHD Media is able to handle Bradford & Bingley, HSBC Bank, Prudential Assurance, Sainsbury’s Bank and Charles Schwab.

Even in the notoriously competitive car market, Aegis juggled four car brands in the UK – PSA-owned Peugeot and Citroën, and BMW and Renault – between sister companies Carat and BBJ. Eventually Aegis was forced to drop PSA due to Renault’s concerns over conflict, leaving BBJ to handle BMW and Carat to handle Renault.

When it comes to conflict at creative agencies, advertisers appear to be less relaxed in their approach. Publicis has just been forced to resign easyCar’s advertising account less than a month after its appointment by the car hire company (MW last week). It is understood that the move was forced by Renault, which perceives easyCar’s positioning as a direct alternative to car ownership as a conflict.

MediaVest chief executive Jim Marshall says: “Creative work is always going to be a massively emotive issue. Often it’s down to the fact that clients are looking for one big creative idea and fear that their competitor may get it.

“With media, the conflict issue is a less difficult one these days as, when it comes to buying media, everybody competes with each other. But when it comes to planning media, it is a more difficult area with a need to maintain confidentiality.”

The fact there are fewer media agencies than there are creative agencies has forced clients to take a more relaxed attitude to conflict, as their choice is restricted. Advertisers, according to Carat marketing director Jenny Biggham, are also happy to benefit from better prices through pooled buying points such as Carat and BBJ’s joint system and Zenith Optimedia’s outfit. “In our experience competing advertisers are more comfortable and get more benefit from pooled buying, but they like to keep planning separate,” she says.

However, Debbie Morrison, director of membership services at the Incorporated Society of British Advertisers, believes that clients are becoming increasingly sensitive to issues of conflict at media agencies as consolidation erodes choice.

She says the reason advertisers appear to have adopted a stricter attitude towards conflict at advertising agencies is that they are more concerned about ownership of the big idea and less about confidentiality and data.

Where there are two brands in the same sector using the one advertising agency creativity can suffer, she says.

Morrison believes that Peugeot got the better deal when its sister brand Citroëshared the same agency – Euro RSCG – before moving to Partners BDDH: “I always thought Citroëwas the poor relation at Euro RSCG.”

However, Rainey Kelly Campbell Roalfe/Y&R joint chief executive Jim Kelly argues that creativity is an “infinite resource” and that there are more obvious conflicts in media where “there are only so many poster packages or peak spots”.

He also makes the ironic point that client companies are happy for their solicitors, management consultants such as McKinsey and bankers such as Goldman Sachs to work with rivals.

But Martin Jones, owner of the AAR, believes advertising agencies spend too much time thinking about the issue of conflict from their own perspective rather than that of the clients: “The clients, to be truthful, don’t trust agencies. The agencies always talk about management consultants and accountants, but the clients have been able to trust them because they don’t gossip.”

There is also the fact that management consultants tend to work on a project basis, while solicitors have their own conflict rules relating to transactions or litigation.

The degree of trust attached to advertising agencies has also been dented by attempts to keep potentially conflicting business secret from existing clients, says Jones.

Even with advertising agencies, clients have had to take a more realistic approach to consolidation. Many years ago clients such as Procter & Gamble would never have tolerated being in the same agency group as a competitor.

Groups have developed different networks to cope with such conflict issues. These days, for instance, you find Publicis-owned Leo Burnett handling Procter & Gamble and part-owned sister agency Bartle Bogle Hegarty (BBH) handling arch-rival Unilever. There are even competing advertisers using the same network but in different markets.

Consolidation among advertisers has also thrown up conflict issues as well as expansions of their own businesses through extensions into related product areas or new sectors, such as supermarkets launching banks and gas companies offering telecoms services.

BBH deputy chairman Jim Carroll says conflict issues are no longer “black and white” as service brands which have increased their spend over the years are more difficult to define: “We had Sony Ericsson and One 2 One before it was rebranded T-Mobile – to many people two mobile phone brands – but, one was a network and the other a handset manufacturer, where knowledge from one sector complimented that of another.”

But agencies should be wary of complaining too much about clients’ attitude to conflict. In Japan, where large agencies such as Dentsu have numerous competing clients that are managed using “Chinese walls” and separate teams, there are fewer agencies. If clients become more relaxed on the issue of conflict then logic dictates that the number of agencies will decline and agency executives might find themselves without a job.

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