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Fonterra goes out and gets Naked, OMD cries over spilt milk

There's been plenty of talk around the industry traps recently about both the commoditisation of media and the apparent fragmentation of big clients' business. A lot of it seems to be just that: talk. But not when it comes to the country's biggest company, Fonterra, which has split up its media business, giving Naked Communications the communications, strategy and channel planning work and leaving OMD with the media buying.

Having the thinking taken off you and being left with the doing—the trading and negotiations—is a bit of a slap in the face for OMD, but Naked director Matt O'Sullivan, who also worked at OMD for a short time, says it's not too difficult to draw a line between the two disciplines. In fact, it's exactly why Naked set up the "A bit more focused and bit better" model.

What is difficult is for big agencies to admit they're not good at something. But he believes this is the price they will continue to pay if they keep playing the low-margin procurement game.

"If you focus too much on buying, eventually the strategy side of it will go," he says.

Responding to questions for a story on independent agencies that's set to run in the September/October issue of NZ Marketing, James Blackwood, chief executive and creative director at bcg2, says "multi-nationals often get defensive about losing potential revenue or kudos and usually won’t ‘play nice’ in collaborative efforts". So it remains to be seen how nicely this working relationship between Naked and OMD will pan out (on the advertising front, Fonterra uses Colenso for its bigger consumer brands, and indie agency Shine for its stable of challengers).

Naked already does similar strategic and planning work on the Coke account and, with Fonterra now on board, that's two very big clients to have nabbed in under one year of operation. And it's also a great platform for the business to push off, O'Sullivan says.

Naked has made a couple of appointments to support the new business. And, to rub a bit more salt into the wound, one of them was pinched from OMD.

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