McCann loose Microsoft – and there may be tears in Munich
Crispin Porter + Bogusky win Microsoft. It’s being praised as a “rebel alliance win” and although Microsoft are saying that McCann will remain the lead agency, a yearly spend of $325 Million minus the $300 Million that Crispin get to do their “project” does lead one to ask the question – lead of what? (Update: Martin has left an interesting comment which suggests that this may not be correct. You can read it here.)
It remains to been seen what effect this will have on the European market but according to the press release Crispins have been handed a “new global creative assignment” so that does to include that bit of old Europe called Germany.
Considering that both McCann and Wunderman have been staffing heavily for the Microsoft account in their Munich offices I’m sure that there will be some frantic meetings taking place today between the two agencies and their respective CFO’s. The headcount per account per euro equation will need some explaining (the word words “eggs” & “basket” spring to mind). They will probably seek comfort in the fact that Crispins are “only” dealing with a B2C project (a $300 Million global project) but I’m still predicting that there maybe tears in Munich by the end of today.
There are a couple of things I find really interesting about this decision. Firstly we have Microsoft’s statement:
“Crispin was chosen based on their strategic approach, the strength of their creative ideas and the passionate and diverse team of people at the agency,” Source Adweek.
Which kind of means that everybody else involved in the pitch couldn’t bring that kind of stuff to the table; including McCann.
Secondly, I think it’s interesting that McCann have actually lost Microsoft – and not particularly that Crispin’s have won it.
I’m sure we will hear things like “the industry is going through a creative renaissance” and the quality and current success of agencies such Crispins, Goodby Silverstein and Wieden + Kennedy etc. cannot, in any way, be denied but considering the current financial state of the bigger network agencies:
- JWT down 25%,
- Publicis down 24.4%,
- DDB down 10.7%,
- Ogilvy down 11.9%,
- Lowe down 14.76%,
- McCann down 5.5%,
- Grey down 2.6%
source W+K London
you would have thought that they would all try a little harder to keep a piece of business like Microsoft. Which makes you wonder where they hope to get their revenues from doesn’t it?
POSTSCRIPT: I’ve just gone back through my interview with Kris Hoet of Microsoft Europe - check out what he has to say about agencies.
If you think that others might been interested in this would you be so kind as to Stumble it?
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lauren
whoa… i can feel the rumble from here.
Feb 28th, 2008
Tim Keil
OMFG! OMFG! OMFG!
I don’t know why, but I’m kind of excited by this.
Feb 28th, 2008
The Kaiser
Tim – this is important and that’s why I think it’s so exciting. It would seem that Blue Chip organisations like Microsoft and Nokia are shifting away from the corporate dinosaur thinking of agencies such as McCanns and are looking for something a little more honest – something a little closer to the money – with creative teams that are led by creative people who are hungry and interested.
It’s exciting because it’s a courageous move from Microsoft to offer CP+B the business and courageous for CP+B to accept it.
I just hope that this really does impact the work in Europe, and I really hope it has some effect of what goes on in Germany too. Everybody knows I’m a massive Microsoft fan – I think they deserve better and hope they finally get it.
Lauren – see above, that’s why you can hear those rumbles down in Australia.
Feb 28th, 2008
Martin
Marcus, stop me, if your heard this before but, the creative assignment is about a campaign that is backed by a $200 million to $300 million media budget (see http://adage.com/article?article_id=122342) for reference). A media budget doesn’t say anything about what actually will be left for the creative agency for handling the campaign. Also, as AdAge points out, McCann’s budget of $325 million is a part of a $1 billion Microsoft has spent last year in measured and unmeasured marketing (see http://adage.com/agencynews/article?article_id=125393 for reference). So your and George Parker’s math is probably wrong by suggesting the $300 million of CB+P’s assignment just leave $25 million for McCann.
In regard to a flood of tears in Munich, Wunderman is handling the CRM part of advertising of Microsoft. The assignment handed to CB+P is clearly not taking place in the CRM realm. Not only given the budget but also given what it aims for. Thus Wunderman might not shed any tears at all, because there just is no reason.
Last but not least, with all due respect to CB+P’s creative capabilities I wonder how the campaign is going to be rolled out worldwide from four US and one UK office.
Feb 28th, 2008
George Parker
Kaiser Baby…
Great fucking post… Nearly as good as one of mine… Just make sure you don’t make anyone “Off” themselves… Anyway, the point is, If I was a BDA and looked at those numbers, I would be shitting myself, ‘cos it’s obvious, they are fucked. Oh, and while you’re sober… Intel is next to fianlly get the fucking message and shove a BSS (Big Shitty Stick) up the arse of their agency… Which happens to be McCann… Mmmm, does anyone sense a pattern emerging here?
Cheers/George
Feb 29th, 2008
The Kaiser
Martin - hello, welcome (I don’t think you’ve commented here before) and thank you very much for your excellent comment. There’s quite a lot in there so I’ll take them on bit by bit.
The Maths. You maybe right and we maybe wrong (I’ll make an update in the post up above pointing to your comment). But in a market (the advertising industry is a market) where the differentiation between network agencies like McCann is almost zero (http://tinyurl.com/2ezan4 ) the kind of client and the work that an agency does for that client is really the only point of difference. Each agency is itself a brand that needs to attract both customer (retain and develop existing clients, attract and win new clients) as well as talented staff and, in the case of agencies owned by holding companies, keep the share holders happy. The damage to the McCann brand that this Microsoft decision has caused is massive, regardless of the size of the budgets.
CRM. Firstly I don’t think I said a flood of tears, this is Germany and we like to keep a tight reign on our emotions. Tears yes – gushing floods no. A couple of things about your Wunderman comment. I find it interesting that you obviously consider CRM outside of the realm of a creative brief. Secondly, although this piece of news only talks about McCann it should really shake up any agency that has Microsoft on its books.
For me the decisions marks a real shift in the way Microsoft procures it marketing and advertising communications (please don’t forget that as an agency you are nothing but a vendor to Microsoft – that’s why you get invited to the Microsoft “Vendor Days”). Microsoft are obviously looking for effect, creative and flexible ways to reach various markets with various products and it can only be a matter of time before Microsoft audit the way they deal with CRM. If we examine the client, the market and the kind of work that Wunderman actually do for Microsoft, one does wonder why Microsoft doesn’t consolidate their CRM work to ava Razorfish which has subsidiaries in Germany (Neue Digitale). And Microsoft own ava Razorfish too. I’m pretty sure that Microsoft procurement department will be having a bloody good look at CRM soon so, off the back of the McCann news Wunderman should be worried.
The international rollout. Interesting question, and one I simply can’t answer. I’m sure CP+B sold the MDC-Partners network into the pitch – and I know that they have some good people down in Asia. Maybe there will be a model similar to W+K and JWT on the Nokia account. As I mentioned in my comment above it took a lot of courage to offer this to CP+B and likewise a lot of courage for CP+B to accept it.
Feb 29th, 2008
Martin
Marcus, thanks for getting back. Regarding CRM, generally I wouldn’t consider CRM outside the realm of any creative brief. Still, in this specific case I would. This assignment’s goal is changing perception and ‘buying consumer affection’. It probably also is related to a search for a Windows Seven evangelist, who is selling a Microsoft life style, like Apple does. (http://tinyurl.com/22xtv7) I think that for such a task CRM still does not provide appropriate means.
Feb 29th, 2008
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