Leo Burnett and Fiat part ways after Europe…
by Jennifer Whitehead Brand Republic 20 Mar 2006 14:20

LONDON - Leo Burnett London has parted ways with Fiat following the car maker’s decision last year to reorganise the way it runs pitches for pan-European campaigns. The decision does not affect Leo Burnett’s sister agency Arc, which will continue to work on Fiat’s UK direct marketing account. The direct marketing work is now a major area of activity for Fiat UK, which has cut its total UK media spend from £25.5m in 2004 to £7.4m in 2005. Of that figure, around £3.5m is believed to be billings handled by Leo Burnett in London. Following the appointment of Gregory Pingree as international advertising coordinator last year, Fiat now runs pitches from its head office in Italy for major campaigns, with roster agencies competing against each other for the work. Leo Burnett lost out in a pitch to handle the launch of the new Fiat Punto last year….

So what does this mean?

Well Leo Burnett have been working on the Fiat account for over 5 years now and often in close partnership with Arc. They created the Spirito Di Punto camapaign aswell as launch the Fiat Idea MPV whilst Arc always followed up with DM and digital.
There are two arguments to this. The first being that this is a very stupid move by Fiat. By pulling out your portfolio of brands from one network and then having it carved up amongst a number of other agencies when it’s campaign time is a bit dangerous. There is unlikely to be the close synergy between whichever agency gets the new gig (one off campaign) and Arc (Leo Burnett were in the same building as Arc, shared many of the same clients and Arc acted as their marketing services dept). Arc are going to have to be flexible enough to work with a number of new advertising agencies and to be honest, Arc isn’t really known for being able to do much let alone enforce a process of working alongside new agencies and have great reaction times. So therein lies the dilema. A shaky and unstable future for the Fiat brand.
On the flip side however this can be argued as a sign of the times. The budgets do tend to shrink these days for traditional advertising (TV, press, print and radio). This could very well be quite an intelligent move by Fiat who see the potential in DM, digital etc and as a result wish to focus there. Branding in its traditional sense (TV etc) can now been done on an ad hoc basis with no (fee) commitment to a large ATL agency network. After all, the DM results must be producing some return in order to make this move.
What’s surprising is that this move is made by a car manufacturer which you would think needs the branding and image that only TV, press, print etc can bring. I very much doubt that a huge lift in sales can be achieved by allowing Arc to take the helm and lead campaigns based on junk mail and some new POS in dealerships. But hey, that’s just my take, we’ll see how Fiat does and if they decide to pick up an ATL agency later on when the brand maybe a bit lost.

Production houses threaten to boycott BBH
Kate Nicholson Campaign 3 Mar 2006 00:00

Bartle Bogle Hegarty is facing a crisis with news that up to 40 production companies are threatening to boycott the agency’s TV briefs.
The dispute centres on BBH’s contracts with production companies. The main bone of contention is BBH’s decision to pay editors directly, rather than via the production company. Production houses including RSA Films, Blink, Academy, Stink, Gorgeous, Partizan and MJZ gathered at the Advertising Producers Association on Tuesday to discuss a ban on working with BBH. Production companies have previously had the right to negotiate contracts and fees on behalf of the editor, on a job-by-job basis. Steve Davies, the chief executive of the APA, said: “Cost is an issue, but this is more about the production company’s creative role. It may not be BBH’s intention to erode this, but there is the fear that is what will happen. Production companies are in business and seeking to make a profit. There is no reason why they should…

So what does this mean?

This follows on nicely from Leo Burnett’s dilema with Fiat. What better way to show your client that you are serious about their account and their advertising by wishing to save them as much money as possible.
The traditional production system is currently:
1. Agency recieves client brief
2. Agency creates concepts which are then approved or amended
3. TV production sources film crew, director(s), actors
4. Ad is then shot
5. TV production then hire production house to edit the footage alongside the creative team and the director to create a TV ad

Seems straight forward enough. But in the 5th stage BBH have tried to cut some corners by suggesting they approach the guy who edits the footage directly and brings him in to do it in house as opposed to his place of a work – a production house. This means saving money (as production houses have started a blanket rise in their rates) and having a much greater creative ownership as they will be able to control the editing much more. It seems fair but production houses have hit back saying they will put an all out boycott on any BBH brief (not likely, production houses make 80% more making TV ads than say a music video and movies are quite laborious and time consuming when compared to the fees made by TV ads). Production houses have also said that the potential saving by doing this can only be in region of £2k. However, considering the harsh auditing that agencies undergo even £2k is a big deal.

So are BBH right to change the goal posts and try and cut out one of the middle men in order to save a quick buck? If it doesn’t compromise creativity and the client is happy, sure.