Following a lengthy, and often tortuous, agency review that lasted nearly two years, Coles has finally handed its $52 million supermarket ad account to DDB. Picking through the debris of the process and working out what the future holds for the retail giant could soak up even more time in the coming months.
Coles first mooted the idea of consolidating its agencies in December 2006. Since then, the review, under several different guises, has been hampered by last year’s Wesfarmers takeover and the arrival of Joe Blundell from Britain as marketing director in August.
It’s understood that DDB and Leo Burnett were the only agencies in real contention from early October. But other agencies, including JWT, Badjar Ogilvy and George Patterson Y&R, were still in talks with Coles until a relatively late stage.
At a time when agencies’ financial margins aren’t exactly ballooning, the cost and time involved in a seemingly never-ending pitch has provoked private ire.
“The review was a complete and utter debacle,” says one agency executive close to the process. “The Wesfarmers takeover was out of their control, but there was a real lack of regard for agencies.”
Nick Condon, managing director of the victorious DDB, has sympathy for those who missed out.
“I feel for the agencies that didn’t have success, especially Leos as the decision was very close in the end,” he says. “There’s a big personal commitment that goes into pitches, and this was a real marathon, so it’s natural to be disappointed.
“But when you look at how the company has changed, with both Wesfarmers and new marketing personnel coming in, it’s not surprising that they haven’t been able to make the decision until now.”
Looking forward, Condon says that the work on Coles will be wide-ranging, but the agency has started with a “blank sheet of paper” in terms of creative solutions.
“We’ll be working closely with them in the next couple of months. In terms of creative, it’s still a long way off. This is the greatest opportunity for any agency, as Coles is looking to rejuvenate itself.
“Coles is looking at all aspects of its business at the moment. Positioning is key, but so are things like store opportunities. It’s an exciting time for the supermarket industry, there’s lots of competition and Coles is in a broader business transformation plan.”
Coles, which declined to talk to B&T, has stated it is carrying out a five-year turnaround process in the midst of pressure from rivals Aldi and Costco, as well as Woolworths.
A pitch insider says: “Coles have got problems and they need to put it right. They’ve lost a lot
of ground due to a lack of investment and strategy. They weren’t looking for a quick advertising solution, they wanted a long-term business partner.”
Coles may be keeping an eye on the bigger picture, but there’s no doubt its brand could do with a jump-start.
Grant Rutherford, DDB’s high calibre ECD, will have to formulate a proposition to rival Woolworth’s “Fresh food people” strategy. Rival agencies feel he has plenty of work to do.
“At a top of mind level, I struggle to think of Coles’ advertising, at least in a positive, empathetic or meaningful fashion,” says Paul Bradbury, managing director of Whybin\TBWA.
“I know Woolworth’s is ‘The fresh food people’, but I’m unsure just what it is that Coles stands for. What is it that differentiates them from their competition and draws me to them as a preferred shopping destination?
“I know at a rational level they are a large food retailer and I know they spend lots of dollars promoting loss leaders to drive traffic. But there’s no real raison d’etre and no meaningful point of difference.”
Rob Belgiovane, ECD at BWM, says: “Coles needs to challenge the perception that they’re essentially second rate. They look old-fashioned. I always get the impression that Woolworths looks contemporary and Coles a bit dated.
“I’ve got no idea where they stand or what they stand for. I can’t distinguish between Coles and Kmart now.”
Coles’ problems appear to run deeper than the next ad campaign, as Bradbury points out: “Ultimately they need to appreciate that powerful advertising can only ever mirror the reality of
a business.
“In that sense, Coles’ greatest challenge is not an advertising challenge but a business and marketing model one.”
