Churchill’s appointment of WCRS to handle its &£20m advertising account is further evidence that the financial services sector is something of a “special case” when it comes to client conflict. Churchill is owned by Royal Bank of Scotland, which also owns Direct Line. WCRS counts Abbey and Prudential among its clients, but says there is no conflict because Prudential’s car and home insurance is provided through Churchill, while Abbey’s is underwritten by Norwich Union.
The decision highlights the fact that financial services brands tend to see the presence of rivals on an agency’s roster as less a source of conflict and more a mark of its expertise. Martin Jones, director of advertising at the AAR, says the complexity of their message means financial services companies prefer to use agencies with experience in the sector. And, whereas packaged goods clients can choose from any number of suitable agencies, there is only a handful with experience of handling top financial services brands.
“It’s one of the few sectors in which there are more advertisers than agencies,” says Jones, who points out that some agencies, such as CCHM/Ping, specialise in financial services.
But while financial services clients may have been forced to accept a degree of compromise, observers say the same is not true of advertising generally and point out that it is client conflict that keeps many agencies from growing beyond a certain size. With so many to choose from, advertisers simply do not need to consider an agency that is already working for a rival brand.
“If you’ve got five or six very good agencies with experience in a particular category then why would you bother?” says one agency executive.
Others say that advertising agencies are not set up to handle client conflict in the way that other service providers, such as banks and law firms, are. For all their promises of separate account teams and secure IT systems, their creative teams still freely interact, they argue. One industry insider recounts how a client walked through the art room of an agency to find his ad sitting next to a rival’s. This, coupled with the generally held perception of the industry as a “gossipy” one that leaks information to the press, worries clients.
Another argument is that consumer goods brands are more reliant on creative advertising to stand out in the market and, as such, feel that if an agency works for a rival its ideas might be diluted.
By contrast, “financial services clients want specialists, so are prepared to compromise,” says Pete Edwards, former Starcom director and now partner at start-up planning agency Edwards Groom Saunders. “Packaged goods brands are more reliant on that little bit of brand magic to differentiate themselves.”
Yet while advertisers may have a wealth of choice on the creative side, observers point out this is not the case when it comes to planning and buying their media. As a result of consolidation, there are fewer networks, particularly with global capacity, so choice is limited.
The economies of scale offered by a major network are also attractive, so clients have been more prepared to accept a degree of conflict.
AAR managing director Paul Phillips says because media has become so fragmented, the issue of prized television spots (in and around popular soap-operas like Coronation Street, for example) going to the bigger clients is no longer relevant.
But outside the financial services sector, client conflict looks like being a problem for creative agencies for the foreseeable future.