For more than 20 years, Telecom's main creative agency has been Saatchi & Saatchi and whether it be Father and Son, Services and Products of Telecom (aka SPOT), weekend calling or any of the other memorable, often emotionally charged campaigns aimed at getting New Zealanders to use their phones, the pairing has created some of the country's best advertising. In more recent times, however, as Saatchi lost its mojo and Telecom's share price hit the floor, those glory days are long gone and the work hasn't really come close to reaching those heights. So for many in the industry, the fact that agency and client are still together is somewhat perplexing. But we understand Saatchi & Saatchi's long hold on the creative account could soon be broken.
We have it on good authority that DDB has recently completed a project for Telecom (depending on who you listen to, it's either a huge brand campaign or a small sideline project), but for reasons unknown the launch date has been pushed back.
DDB Group's direct and digital arm Rapp Tribal is on the Telecom roster, and, as is often the case in this networked advertising world we live in, the boundaries often blur and it's not unusual for partner agencies to slip in an idea for a project to try and get their foot in the door, as DDB has done recently with Yellow and Steinlager. It goes the other way too, of course (Saatchi's recently did the Double Data Wheel for Telecom), but that's never quite as sexy.
Not surprisingly, everyone involved in this saga was keeping mum. DDB's managing director Justin Mowday didn't want to comment and all he would say was that "Rapp/Tribal continues to do great work for Telecom".
When we asked Telecom's chief marketing manager Jason Paris for a quick chat to talk about whether Telecom had indeed been working with DDB, we received an email from the comms team saying "Telecom works with lots of different agencies with three core roster agencies (Starcom, Rapp Tribal and Saatchi’s) and there is no intention to change these at present." And Saatchi & Saatchi's chief executive Nicky Bell is away until next week.
As many have pointed out to us, the fact that there hasn't been a formal review of the account for many years, despite fairly difficult times for both agency and client, is all the evidence required to show that having the chief executive of Saatchi & Saatchi Worldwide, Kevin Roberts, as a board member of Telecom is a conflict of interest (he joined the board in 2008 and was reappointed after Telecom did the splits last year).
David Walden, the chief executive of TBWA\ and ex-managing director of Saatchi & Saatchi, went on the record saying he finds it extraordinary that a large corporate like Telecom hasn't had anywhere near the same level of scrutiny placed on its agency-client relationship as other large corporates.
"And the only thing you can put that down to is Kevin Roberts ... He's been a very good safety net, a very successful advocate for them."
While Walden doesn't have any specific examples of Roberts interfering in Telecom's operational matters, he believes there have been times when the cavalry has been called in during difficult periods or the agency has been given a "stay of execution" to get better. This view is backed up by a number of other senior sources we've spoken to who have a connection to the account. And Roberts basically confirmed it himself when he came out in support of Telecom's Abstain from the Game campaign and told people to "Do your duty and ... Abstain For the Game!", despite retail chief Alan Gourdie pulling the campaign due to the public response and offering a personal apology to staff "for the angst or embarrassment this has caused".
As Lance Wiggs points out, "board members should not, as a rule, be doing other external business with the company they are governing".
The Telecom Board Charter states that “The Board must affirmatively determine that the Director does not have a material relationship (other than solely as a consequence of being a Director); and disclose the basis for this determination in the annual report.” Roberts would fall under the material relationship clause which states “A relationship as a principal of a material professional adviser, a material consultant to the Company or Group or an employee materially associated with the service provided, or employed in an executive capacity by the Company or Group held at any time within the past three years.” This is all recognised in the 2010 annual report, which states that Roberts is “Not Independent“.
The other document to examine in these sorts of situations is Telecom’s Code of Ethics, which states “A conflict of interest occurs when an individual’s interests interfere, or appear to interfere, with Telecom’s interests. Telecom expects its people to act in Telecom’s best interests at all times.“
So is the role of Roberts acceptable? Could his influence possibly be limiting the options available to—or putting pressure on—the marketing team? And shouldn't Telecom, as one of the country's biggest advertisers and a company that will have a big marketing fight on its hands if Vodafone's takeover bid on TelstraClear is accepted, be able to find out if it is working with the best creative agency?
Simon Moutter is set to join as Paul Reynold's replacement as chief executive and managing director in September, so, depending on whether he decides to maintain the status quo or give the okay to look elsewhere, that could be a watershed moment for the pairing. And while there's no doubt Saatchi & Saatchi is improving at the moment under the new management structure, one has to wonder how much longer the hand of God will be able to protect, as one source called it, "Saatchi & Saatchi's golden ticket".