London FOG

By Published on .

Amy Lawson is Wieden & Kennedy's third London managing director since the U.K. agency opened in April 1998. She has just hired creative directors No. 5 and 6.

Light years and a few blocks away in trendy Soho is Fallon, run by the same equity-owning managing partners it started with six months after Wieden. Unlike Wieden, Fallon's London office was a formidable competitor for U.K. new business from the day it opened; it slipped into profitability in its second year.

Why does one U.S. agency brand transfer easily to London, the world's largest ad enclave after New York and Tokyo? True, London's billings of $20.5 billion are hotly contested since accounts are much smaller than in the U.S. and are fiercely fought over. But why is Fallon navigating the gossipy, competitive and overstocked market so much better than an equally successful U.S. rival?

The answer may be partly that Fallon started by empowering local managers and creating a clear new-business mandate. And although it opened with a signature account, Lee jeans, the agency wasn't limited by it. The Fallon partners took advantage of local interest in a new agency, participated in the close-knit creative community and quickly became the darlings of the U.K. trade press.

The outset was different for Wieden, perceived as having opened reluctantly in London as the only way to win global client Nike's U.K. business. It was also hampered by an agreement with Nike that barred the agency from new-business efforts for the first six months in London, making the shop seem standoffish. British ad execs say their friendly overtures to a newcomer were rebuffed, and recount tales-denied by Wieden-from the parade of departed creative directors and managing directors of interference from U.S. headquarters.

"There's got to be something greatly wrong with an agency that starts with an asset like Nike and goes through as many creative directors and managing directors as Wieden has in the last few years," said the CEO of one of London's largest agencies. "There was a bit of a belief that all they had to do was open in London and be Wieden and business would come walking in."

Wieden execs claim that charge is unfair, although Dave Luhr, Wieden's chief operating officer in the Portland, Ore., headquarters admits the agency staffing started out wrong. "We didn't have a cohesive team of leaders-creative directors and managing directors with a common goal-until our most recent hire," he said.

Wieden's first London management team was led by Susan Hoffman, a Wieden creative director from Portland who moved first to the Amsterdam office, then to London to assume the same post. She was paired with Managing Director Mike Perry, ex-managing director of TBWA Simons Palmer, the agency that lost the U.K. Nike account to Wieden, and Co-Creative Director Nick Gill. Mr. Perry left after 10 months "to pursue other interests;" Mr. Gill departed within six months, and Ms. Hoffman returned to Portland after 15 months.

Mr. Luhr said Ms. Hoffman had never planned to stay long-term in London. "When Nike put the U.K. account up for review, we saw it as a great opportunity to open in London," he said. "To be a global company, you have to be represented in London. Would we have opened in London without Nike? It's hard to comment."

The job of building the shop now falls to Ms. Lawson, an ebullient French-speaking Australian who was a chef in Paris and formerly worked for Australian telecommunications giant Telstra before she joined the agency world in London. Ms. Lawson has been a new-business exec at three London agencies over the past eight years. Even critics think Wieden may finally be on the right track with Ms. Lawson. "Clients love her," the London CEO who criticized Wieden said.

One of her first moves was to hire in September as co-creative directors Tony Davidson and Kim Papworth, a team from legendary creative shop Bartle Bogle Hegarty, who did award-winning work on Levi Strauss & Co.

Ms. Lawson is blunt in her assessment of what went wrong for the London agency. "This market thrives on diversity, but you've got to be a player," Ms. Lawson said. "The biggest criticism [of Wieden] was that they weren't even seen to be trying."

Fallon, she acknowledged, clicked from the beginning. "New business was a driving force [at Fallon] from day one," said Ms. Lawson, who had just spent the weekend in the office working on a Wieden new-business pitch. "When you start up, it's a sexy time. By the time Wieden [woke up] our sexy six months were up."

Wieden's initial foray into Europe was a decade ago, in the easygoing Amsterdam ad community. Today, 135 people from 18 countries cluster in a charming 17th century house on a canal, working mostly on often-stunning ads for Nike. The Amsterdam office does all the creative work for Nike in Europe as well as all Nike's soccer-themed ads worldwide. The more ambitious and international Amsterdam office often seems to overshadow the newer London shop, which handles Nike's U.K. work, local projects for Diet Coke, Virgin Interactive and the Flextech cable networks.

In Amsterdam, Nike still accounts for about 60% to 70% of billings "but that's going to diminish greatly over the next year or so," said Creative Director John Boiler. In October, the Amsterdam agency won a $30 millon mobile-phone account from Siemens.

While Wieden's London office was hamstrung on new business, Fallon, which opened in October 1998 with VF Corp.'s Lee jeans European account, picked up its second client, a local confectioner, before the agency's offices were even habitable-writing the pitch at a local cafe. Its second month, Fallon won the British BBC Radio account. All three pitches were against some of London's hottest creative shops.

Another major difference between Fallon and Wieden's London start-up: deeper local roots. In Fallon's case, Robert Senior and fellow partner Michael Wall were account and client services directors at TBWA Simons Palmer when they realized they were both talking independently to Fallon about opening an agency.

"We were mates, we compared notes, and told Fallon they needed a team," Mr. Senior said. "They let us put the team together. That's the absolute killer blow. They were magnificent at resisting not getting too involved."

Messrs. Senior and Wall added three other founding partners: Richard Flintham and Andy McLeod, a creative team who had worked together at three agencies, and Laurence Green, a planner.

"Clients had never heard of us," recalled Mr. Senior. "And they still haven't. They come in and ask which one of us is Fallon."

The shop has wasted no time in getting work out. Fallon launched Starbucks in the U.K. and, in September, wrested a U.K. brewer's Budweiser beer account from BMP DDB in London. Now the kudos are rolling in for a sales- and image-boosting campaign for Volkswagen-owned Skoda, a formerly shoddy Eastern European car maker still considered a joke in the U.K.

In one spot for Skoda's new Fabia model, an irate supervisor shouts at workers at an auto show not to unload their dazzling car at the Skoda stand. In another, a horrified parking lot employee warns a businessman that some vandal has put a Skoda badge on his magnificent new car. The tagline is "It's a Skoda. Honest. The new Fabia."

"The subtext," Mr. Senior said, "is `we know you think it's rubbish."'

Despite a tiny $7 million Fabia launch budget, Skoda's sales have grown 15% since the March launch compared with the year-earlier period. And the number of consumers who wouldn't dream of buying a Skoda fell from 60% to 42%, according to company research.

Fallon's ownership structure, with the five partners holding a minority stake and Fallon the majority, gives the agency a joint-venture feel. It's worked well enough that London, the first Fallon agency outside the U.S., offers a template for the offices that Maurice Levy, chairman-CEO of Fallon's new parent Publicis Groupe, has charged Chairman Pat Fallon with setting up in key countries.

"The Fallon name can be exported and be commercially viable," Mr. Senior said. "Now they [Publicis] will feel comfortable about releasing $25 million [for international growth]. We're helping with the European expansion. It's finding talent, which cities to be in. We're doing an analysis about where the Fallon brand should be."

Mr. Fallon has made several trips to Asia, for example, initially trawling unsuccessfully for agencies to buy in Hong Kong or Singapore, then looking for executives for a start-up.

Wieden, with offices in Tokyo, Amsterdam and London, is considering opening elsewhere, such as Asia and Latin America, although probably not until it has grown the current shops further, Mr. Luhr said.

The next agency being lured to London is Deutsch, after talking about starting up in the U.K. market for more than a year.

Deutsch, which last week agreed to be purchased by Interpublic Group of Cos., may use Interpublic's resources to help fuel a global push.

"We hope to be open in the next 60 days," said Peter Drakoulias, partner and director of business development at Deutsch. "We're close to a management team." He said Deutsch's London office will be run by a Brit but that he and other Deutsch execs will fly over frequently during the first month.

But Deutsch, which currently has no London client, is going in with its eyes open. "London needs another agency like it needs a hole in the head," said Mr. Drakoulias. "We're doing it because we need to grow our business and clients are asking about our international and U.K. capabilities."

Most Popular
In this article: