Memo to M&S: ‘By all means fire RKCR/Y&R – but not just yet’
In the 16 years RKCR/Y&R has handled the M&S account, its performance has pretty much gone sideways. Dominic Mills wonders where it all went wrong
When, just a week ago, M&S announced that it was reviewing its advertising business, the odds that RKCR/Y&R, its long-standing agency, would retain the business seemed pretty long.
When, two days later, recently promoted M&S chief executive Steve Rowe announced the retailer’s latest results to a nervous City, the RKCR/Y&R task got even larger and the odds even longer.
Pre-tax profits were down 20%; UK clothing and homeware sales dropped 2.9%; a new strategy would hit profits in the short-term; M&S would move away from ‘catwalk fashion’, reduce prices and inconsistent pricing (i.e. too many promotional offers); tart up the stores, increase the number of floor staff and give the toilets a lick of paint; and target and cherish its core customer – ‘Mrs M&S’ – while at the same time not writing off young customers.
In short, Rowe ‘kitchen-sinked’ his immediate predecessor’s reign, and pretty much all the efforts of the three before him – Stuart Rose, Roger Holmes and Luc Vandervelde – going back to 2000.
That, incidentally, is the year RKCR/Y&R first won the M&S business, and announced itself with M&S’s first-ever clothing ad, a naked woman running up a hill shouting “I’m normal”. It turned out to be a disaster, but to give the then M&S team credit, it stuck with RKCR/Y&R.
And in those 16 years, M&S has pretty much gone sideways. Revenues are marginally up, the share price the same. After a spike in 2007-2008, when profits hit some £1.1bn, last week they stood at just over £600m. Contrast that with the performance of Primark or Next over the same period.
Over those years, the basic problem – defining the M&S brand – has remained stubbornly unfixable, and the damage that the failure to solve that has caused is evident in the performance of the core women’s clothing unit. The occasional Alexa Chung suede skirt triumph glosses over what is a dismal situation.
During that time, M&S has spent about £350-£400m on advertising. It’s hardly surprising, given yet another reshuffle of the marketing team at M&S, that RKCR/Y&R finds itself in the firing line.
And yet this seems grossly premature. The really big problems – women’s clothing, a poor pricing model, and increasingly tired shops – are hardly ones that can be laid at the door of RKCR/Y&R, or have anything to do with the advertising.
Indeed, the one area where M&S has been successful – food – is also one area where its advertising has been outstanding. Last year food sales rose 2.4% – incredible given the beating the whole market is taking from Aldi and Lidl. RKCR/Y&R can convincingly claim to have invented a whole new genre of TV advertising – the so-called ‘food porn’ style.
If there is one area where RKCR/Y&R is potentially guilty it is in any work it may have done around the M&S clothing brand, where no-one seems to have had any success defining it. Is it upmarket or mid-market? Does it compete with Primark, Topshop and H&M for young women who want disposable fashion? Is it for fashionistas or middle-of-the-road women? Or is it a bit of all-things-to-all-people?
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But we don’t know the extent to which RKCR/Y&R has been invited to, or allowed to, tackle this problem. It may be central to the failure to tackle this, or it may have had nothing to do with it.
But all is not lost. Hard-pressed execs at RKCR/Y&R should take heart from the AMV BBDO/Sainsbury’s story. In 2005, Sainsbury’s faced many of the same issues – declining market share, a problematic brand, and a change of management. What would have been easier for it than to fire its long-standing agency, AMV BBDO, and start again?
Against all the odds, AMV BBDO won the repitch, and Sainsbury’s progress since shows the benefits of its decision.
It seems to me that firing RKCR/Y&R would be the easy answer, but it wouldn’t necessarily solve anything. It’s too late now, but M&S should have waited to introduce its new ‘brand’ (assuming it can find one), and the other operational changes that have nothing to do with advertising before deciding whether to fire RKCR/Y&R or not.
If I’m going to guess, I’ll say RKCR/Y&R will keep the food business, but lose the rest.
£125,000 pa just to chat about ads
I hear there’s a nice job doing the rounds; the salary is about £125,000 a year and the prime function is to talk about ads and advertising.
It’s not even that onerous – two to three days a week, although I’m sure the holder can pull the occasional sickie or ‘work from home’ when they can’t be bothered to make the commute. That might reassure a contact of mine, who assumed the role was two to three days a month, and on that basis thought the money/time equation was, in his words, ‘just about do-able’.
The only catch is that knowing too much about advertising is considered a disadvantage.
The job is chairman of the ASA, and is currently held by Lord Smith of Finsbury, better known to you and me as Chris Smith, former Culture and Media Secretary (and also, but we’ll gloss over that, famously sacked as chairman of the Environment Agency in 2014). His 10 years are up in November, hence the search by headhunters Odgers Berndtson.
So, what makes an ideal ASA chair? Without seeing the job ad (strangely, the ASA doesn’t ‘advertise’ it on its website), I’d say the holder has to be good at running committees, juggling the interests of different stakeholders, and keeping the ASA out of the news.
That makes it well suited to former politicians and ex-Whitehall insiders (Smith’s predecessor was Lord Borrie, a Labour Party life peer and one-time boss of the Office of Fair Trading).
But the idea that it is a cushy number, a sinecure in God’s waiting room, is misplaced. The ASA, and by extension its chairman, has dealt with many thorny issues in the last ten years: Wonga and pay-day loans; ‘greenwashing’; religious advertising; air-brushing and photo-shopping; and vloggers.
And there will be plenty more for the next chair, not least in contentious areas like sugar, high fats and children. Then there will always be those politicians who want to bring advertising under statutory control, or to earn cheap headlines by calling for bans.
Come to think of it, it doesn’t sound like a cushy number at all. But I’ll still bet it goes to an ex-politician who might treat it as such.