What’s Stuart Archibald up to these days?
Stuart is totally focused on getting AIS International up and running, backed by Havas Media. Havas [85% owner of AIS] has developed Media Contacts – a chain of digital media specialists in 20 countries because it makes sense for digital creative to be tied up with media.
So, at low cost, AIS has now got offices in Spain –an agency of 40 people that is not yet branded AIS. There are [also] huge opportunities in New York and Stuart’s going there to get that sorted.
Don’t you miss having Stuart around so much?!
If ever I could escape Archibald, it would be a wonderful day! There isn’t a day goes by without a phone call. He’s a brilliant person to be around and clients love him. It’s put pressure on me to run the UK agency and run the O2 account. So some good has come out of it, because you need a fresh challenge after 10 years.
How did you survive last year?
It was a difficult year. We were over-reliant on too few clients and set out to address that and the reduced spend from Abbey (Santander) due to the financial turmoil.
Income-wise we were up 25% in 2008. The biggest single impact was winning EDF, which is a huge account and growing. We were fortunate that our clients are in markets - O2 in telecommunications and EDF in the energy business – that need to keep talking to their customers and are less at the whim of financial markets.
EDF is a 2012 sponsor and bought British Energy. They have big aspirations and haven’t been big in the digital area. One of the reasons they chose us was they needed to move their marcoms online and had seen what we did for O2 in an incredibly competitive market.
How has AIS dealt with recession?
We’re doing a lot of things differently – we’re much harder on credit control and much more proactive on chasing money and being clearer on terms upfront.
We’ve got our cost base right down – recruited at lower salaries, renegotiated contracts with recruiters and avoided them where possible – that’s a huge cost [saving].
We are 10 people less than we were a year ago – more about not replacing people when they left.
With clients it’s about honesty and openness. We’ve had to have some pretty frank discussions with clients because we’re here to make profit.
What about credit insurance?
With clients’ businesses going to the wall, agencies will get themselves into trouble if they don’t take out credit insurance. Agencies have to insure themselves or get payment up front.
As an industry we’ve been bad at commercial management, but we're getting better. AIS is lucky to have a very good financial director who can have those discussions with clients, away from day-to-day account management.
We’re also fortunate to have clients who are big multinationals– but when it’s local clients in certain markets … So far, touch wood, we had only one issue of a company owing us money.
Any upsides to recession?
As an industry we’re generally quite complacent. Recession helps with wage inflation – funny how a dose of reality sets in! Staff salaries, especially in digital, were going through the roof. In 2007 we'd offer people a job and then they'd call us and say they'd been offered £200,000 and were we going to match that. The vast majority of our employees are under 30 and haven’t been through a recession – this has brought a real dose of reality.
You got short-listed for Cannes but didn’t go…
I went last year and loved it, but it felt like the last hurrah. Nobody I know went this year. Everyone is finding it difficult to justify going when people are being made redundant. We did say three of us would pay for ourselves to go and take it as holiday, but our workload wouldn’t let us.
Any new business to talk about?
In 2008 we were pitching relentlessly and it took the eye off existing clients. Two or three pitches came to nothing and cost us £100,000 each in resource.
So we decided in the first six months of this year to focus on existing clients – it’s a lot easier to win from existing clients. It’s been the best strategy ever.
We were invited to do the TV Licensing pitch and one of stipulations is taking on 35 people from Proximity London [the incumbent] or shouldering the cost of making them redundant. You could manage that with one or two [staff] but 35 is the size of a small agency. I hope that Proximity actually retain it, because they’ve done a good job on it.
We’ve put in the initial request for the Post Office account. We're hearing next week about who’s on the ‘long list’. We've lost nothing by doing it.
What’s new from AIS?
We’ve got some activity for EDF energy on churn and did the web build for Green Britain Day and Team Green Britain, all the online advertising and the communications that come out of that. It’s all direct marketing but online, driving everyone to the website to sign up.
We did a huge integrated campaign – ‘Love food hate waste’ - for government body Wrap. It put the whole subject of food waste on the map. It’s good timing as last year, no one was worried about recession and the amount of money being wasted on food.
Tony Spong of the AAR believes that few agencies are integrated in reality…
Our original ambition was to be an integrated agency and solve clients’ problems without the answer being predetermined. For our founder client Virgin.net we did everything from TV to inserts. We developed a central idea and spun everything off that – so we weren’t just taking a TV ad, creating a still, putting it in press ads, folding it and sticking it in an envelope.
Agencies pay lip service to integration, with traditional ad agencies only interested in doing advertising. The client never gets genuine integration and that’s why we’ve kept everything including people together under one roof.
Because all of our income is fee-based, we don’t make money from production of TV or print. We’ve got the only model that works if you want to deliver integration.
Apple’s iPhone has transformed the way people communicate and work. Inevitably with things becoming online it's integration from bottom up – integrating the brand into people's everyday lives.
A good example of this?
We recently did a good old-fashioned mail pack for O2 where we sent a group of loyal customers a bar of chocolate that said nothing but thank you. I went into Martin Lewis’ moneysavingexpert.com website and a whole group of people were chatting about how nice the chocolate was and others asking ‘why didn’t I get it?’.
How has your creative structure changed to suit digital?
We have changed our creative department but ideas remain at the heart, alongside specialist expertise in digital to help them to bring that to life. We now have a head of creative technology – half-way from a creative person to a geek – called Geoff Gower. He’s great at educating the creative team on how to do things online, [such as] the award-winning O2 Stare Out campaign.
What do you think of ? His views on digital marketing have …
I got a copy of it and was still reading it four hours later. I understand where Steve is coming from. Just because everyone wants to do digital, all the old rules of great direct marketing and advertising still hold true on how you get people to respond and engage in conversation. That’s what DM has been doing for years and it's what Steve was really saying.
And the next big thing for AIS?
We’re always looking to do more in mobile. I don’t think mobile marketing has reached its potential. The launch of the iPhone has moved things on but I don’t think there are many examples, aside from O2, where brands are using it well.