Cell C Account – KC’s cell-out

Posted by Zweli Mokgata on 7 May, 2012 / News

Cell C’s decision to cancel the appointment of new advertising agencies, following the arrival of CEO Alan Knott-Craig, has alarmed the advertising industry.

The mobile phone operator’s communications head, Karin Fourie, has confirmed that the account will be retained by Ogilvy Johannesburg, which has held it since October 2009.

“Other agencies may be considered on a case-by-case basis depending on Cell C’s requirements,” she says. “However, we believe that Ogilvy is best placed to execute the company’s new strategy.”

In February, Cell C’s then-sales and marketing executive, Mandy Waddington, announced that the traditional, above-the-line advertising account would be awarded jointly to Cape Town agencies FoxP2 and KingJames, while Trigger Isobar would handle the digital component and Prima Plus the direct marketing.

However, when former Vodacom CEO Knott-Craig took up his Cell C post at the beginning of April, he halted the process. Shortly afterwards the company announced Waddington’s suspension, followed by a formal resignation.

In an earlier interview with the FM, Waddington alluded to friction with former CEOs Jeffrey Hedberg and Lars Reichelt. She appeared to hope Knott-Craig might give her department more space. “He might be comfortable to step away from the marketing but still want to see everything before it goes out, as opposed to Lars, who was intimately involved even up to logo development and voice recordings,” she said.

Fourie says the appointment of FoxP2 and KingJames was never finalised. “No new contracts have been awarded,” she says. “At the time we went out to contract [late 2011] we did not know that Mr Knott-Craig was joining the company.”

As things stand, Trigger will keep its digital share of the account but Cell C is “holding discussions” with Prima Plus.

KingJames executive creative director Matt Ross says the account cancellation is a shock. “It’s left a bitter taste in our mouths,” he says. “It was seismic in terms of the size of the account, but with Knott-Craig beginning his term they had a cause to reboot all the important accounts.”

Ross says the existing account pitch system is “very antiquated” and many clients believe they can do what they want. “The industry is very upset about this as it has cast a negative light on the agencies involved,” he says.

FoxP2 MD Charl Thom, however, hopes there won’t be any reputational fallout. “The industry and our clients have been extremely supportive,” he says. “As far as we are concerned we participated in a legitimate pitch process. While our appointment has subsequently been withdrawn by Cell C, this is not through any fault on our part and we are not aware of any negative public perceptions.”

Thom says the agencies are now in discussions with Cell C to decide on a possible course of action, including payment of compensation for work they did in the pitch process.

Association for Communication & Advertising CEO Odette van der Haar says while the body is constantly appealing on behalf of the marketing industry for more stringent pitch processes, agencies must ensure they acquire solid agreements with clients. She says: “For any business, it is imperative to ensure that a contract, letter of intent or memorandum of agreement is in place before incurring costs or making changes to the business as a result of new business acquisition. In that way both parties have a clear understanding of the way forward.”

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