The split, the switch and what’s next for TD Bank
September 17, 2012 | Chris Powell | Comments
Is it RIP for the grumpy old men, or can the old guys evolve?
John Boniface lets out a laugh when it’s suggested he’s already reached the “acceptance” stage of the famous Kübler-Ross grief cycle.
DraftFCB’s chief operating officer could have been as grumpy as one of the two old codgers that star in the commercials his agency created for TD Bank over the years. But speaking with Marketing the day after longtime client TD Bank Group announced it was moving its creative assignment to Leo Burnett, he was sanguine and composed.
“We’ve been fortunate enough to be on the receiving end of good news more often than we have the other side of it,” said Boniface. “You walk away from these things with some disappointment and sadness obviously, but also as a company you say, ‘That was a long run, a successful partnership and we did some thinking and creative work that you’re very proud of.’
“It’s onward – that’s what you do as an organization.”
TD had informed Boniface about a week earlier that it was not retaining his agency’s services, bringing to an end a 13-year partnership that produced award-winning marketing that also drove TD to record financial results.
Displaying the conservatism inherent to the Canadian financial services industry, TD declined to comment on the account move other than providing some bare-bones information on the review itself: it began in early May and concluded the week of Sept. 3; Joanne Davis Consulting Inc. assisted in the review process, which did include DraftFCB (no particulars were provided on how many agencies participated and a shortlist).
The win consolidates TD’s offline and digital advertising, as well as social media and merchandising, with Leo. Media remains with Leo’s sister shop Starcom MediaVest. TD spent $36 million on measured media advertising (excluding digital) in 2011 according to Nielsen ad spend numbers.
Boniface said he received the call from Dominic Mercuri, TD’s chief marketing officer and executive vice-president of community and environment, informing him of the decision late in the week of Sept 3.
“My first reaction was obviously one of disappointment; we reminisced a little bit,” said Boniface. “Once you get past the reality of it, you get down to business. You ask some questions and then you digest for a bit and then you move forward.”
Why the change?
With TD declining to speak, it’s unclear why the company opted to align itself with a new agency. From all outward appearances, the move seems curious given its recent performance from both a brand value and financial perspective.
As recently as June, Interbrand named TD as Canada’s most valuable brand with a value of $9.69 billion, placing it ahead of iconic Canadian names such as Tim Hortons and Shoppers Drug Mart. Interbrand attributed TD’s impressive 45% gain in brand value to the company’s attention to customer experience and its brand strategy.
(Interbrand’s values are determined by factors such as the financial health and business of the brand, the brand’s role in creating demand and the future strength of the brand.)
Meanwhile, Brand Finance Canada’s 2012 edition of the 50 Most Valuable Canadian Brands showed TD shooting up to second place from sixth place in the 2009 survey. Financial results for the three months ending July 31 showed reported net income of $1.7 billion, up from $1.49 billion in the corresponding year-earlier period. Revenue increased to $5.84 billion from $5.38 billion. TD also reported that its personal and commercial banking segment posted a record quarter, with reported net income of $864 million.
Boniface said he’s proud of the work DraftFCB has produced for TD over the years, building it up as the home of comfortable banking in Canada. Indeed, when your commercials get spoofed on TV, as they were by Rick Mercer, it tends to indicate they are resonating beyond mere advertising.
“When that happens, you know you’ve made it into a cultural place that very few brands have the opportunity to enter into,” said Boniface with a chuckle. “It’s bigger than advertising, so we’re kind of proud of that.”
But to hear some industry experts speak, even the most comfortable chair can eventually get put out to the curb.
John Farquhar, partner and chief creative officer with Rain43 in Toronto, speculated that the longevity of the DraftFCB/TD relationship may ultimately have worked against the agency. A high comfort level between agency and client, he said, can lead to safe marketing.
“Sometimes with a brand it’s time to make a clean break and get people who can really give you something of an objective viewpoint on the world,” he said. “You get a couple of months to be outside the view of the client’s world, and then you get absorbed into the host. You kind of become part of who they are.”
“Oftentimes clients will reach out to new agencies to really get an objective viewpoint on the world.”
Another senior ad executive, speaking on condition of anonymity, likened the client/agency relationship to a marriage. “You love and like each other, but you lose the passion,” he said, likening the creative product to sex.
“The work may be good, but sometimes the relationship between the parties isn’t,” he said.
Farquhar agrees. “Clients don’t always leave agencies because of the work itself,” he said. “There are other things that are sometimes in play. Politics, changes in management, relationship issues of some sort. It doesn’t necessarily have to be about the work.”
What’s next for the old guys?
While Farquhar says a “Not invented here syndrome,” is common in agencies, new agency partners have to be willing to accommodate ideas that may not be their own. “Every agency thinks they can do it better, but you have to look at it from a business perspective as well,” said Farquhar. “You have to analyze what’s working and what’s not working, not just abandon the whole thing.”
He pointed out to Crispin Porter’s work for U.S. health insurance provider MetLife for which it resurrected the Peanuts characters prevalent in its advertising more than a decade ago. “There are certain legacies you can pick up on for longstanding brands. The trick is how you make them relevant for today.”
The anonymous executive, however, speculated that the creative product would change. “Leo is one of the top agencies in the country doing some great creative work,” he said. “Either they’ll take the characters and reinvent them some way, or they’ll come up with something new.”
Boniface said that DraftFCB will work “collaboratively” with TD over the transition period before the formal hand off to Leo. “It will take some effort, there’s no question, about it,” he said. The industry standard for these transition periods is about three months, which gives DraftFCB until roughly the end of the year to determine how it will proceed post-TD.
It’s too early to talk about the impact on staff, said Boniface. “We’re a pretty big agency with a very broad and deep client list, so the [transition period] will allow us to assess that situation more directly. It depends on projects for existing clients, new business and other things like that. It’s undetermined right now.”
Farquhar also predicted that DraftFCB would bounce back from the loss. “Those body blows come in every so often,” he said.