Nokia’s appointment last week of Wieden & Kennedy as lead creative and strategic agency on its £175m global advertising business comes as the Finnish mobile handset giant unveils a new structure to tackle internet and mobile convergence.
The world’s number one handset brand is seeking to shed its dependable but uninspiring image and tap into the flair and style W&K has shown on brands such as Nike, Honda and Coca-Cola.
According to Nokia’s senior vice-president of marketing for the mobile phone division, Jo Harlow, the aim of the appointment is to make Nokia the “most loved and admired iconic brand”.
Nokia has built a leading global market share of some 35% against nearest rival Motorola’s 20% through a mass-market position which appeals to all and offends no one. Its handsets offer an ease of use unrivalled in the market, though they have lacked the slick and trendy appeal of competitors’ models.
The Finnish brand’s main advantage is its almost universal distribution across operators, something rivals have failed to establish. For these reasons, some believe it is doubtful that W&K’s appointment signals a change to radically fashionable, youth-oriented advertising.
W&K replaces Grey as Nokia’s lead agency and will launch its new work early next year, though Grey’s “Connecting People” slogan will continue. W&K will create work for Nokia’s core markets of the UK, US, India, China and Brazil. A “network” pitch for adaptation and local work in 140 other markets is taking place this month, pitting incumbent Grey/Bates Asia against DDB Worldwide and JWT. Lowe continues as incumbent on the N-Series business.
However, Nokia’s organisational restructure has led to uncertainty about which personnel will lead the brand push. In place of the current structure, three units will be established: Devices; Services and Software; and Markets. Marketing will report into the Markets unit, headed by Anssi Vanjoki. An overall marketing director has yet to be appointed, although it is understood global marketing will be controlled from the UK head office in Farnborough.
Harlow says: “I have nothing specific I can tell you about my future role at Nokia, but the rumours I am leaving are not true.” She disputes the idea that Nokia is a “boring” brand, though she adds that it needs “a more emotional relationship with the consumer”. She points to products such as the N6300, N95 and E65 which show that Nokia has become more fashionable over the past year.
Meanwhile, Strategy Analytics director Neil Mawston says of the restructure: “Nokia has laid its cards on the table. They are trying to emphasise that the market isn’t just about hardware but software as well. It is taking its lead from Apple and it is at the forefront of handset manufacturers in that.”
Aiming for increased revenue
According to Carolina Milanesi, research director at Gartner, the Nokia restructure is ultimately aimed at boosting margins, which have fallen by about one third in four years. “There is a lot of pressure from competitors in China and from mobile operators and margins are getting squeezed, so they need to find a way to increase revenue,” she adds. “They need to do what Apple has done with iTunes, to create the ecosystem to get people locked into the Nokia brand.”
Nokia needs to enhance its image to battle margin pressures and justify premiums on top-of-the-range phones in Europa and the all-important developing markets of India and China. It also needs to keep up prices of low-end phones in the developing world. With alluring new advertising from W&K and a strategy focused on converging calls with music and internet, the company hopes it can rescue its margins and prepare to compete with a new set of entrants to the mobile market led by giants suchs as Apple and Google.