FCB Australia Agency - Essay Example

Draft FCB Australia Agency Report Draft FCB Australia Agency has been in existence for only a few years. Despite this shorter period of its operations as a part of a much wider global network of marketing communications firm, the company has successfully imitated some of the campaigns in Australia to achieve some remarkable progress. Its Honda Civic campaign is said to be one of the most successful in terms of scope and community outreach. In comparison to Team Detroit's campaign on 2010 Ford Fusion, the former campaign has both some advantages and disadvantages. However the most remarkable aspect of Draft's campaign lies in the Agency's commitment to a far reaching strategic vision that encompasses value creation efforts for the client and a host of benefits either way. 1. Company profile Draft way back in 1978 was engaged in direct marketing as an agency and was then known as Kobs & Brady. In the year 1986 it was sold to Ted Bates Worldwide and Howard Draft who was an accounts executive in the company then was passed along to the new management. In 1988 Draft became its Chief Executive Officer (CEO) and the Chairman. As a result the Agency was named Kobs & Draft. Again in 1995 the ownership of the Agency was reverted to Draft and was called Draft Direct Worldwide. In 1996, the Interpublic Group of Companies acquired Draft Direct Worldwide. With the merger of the two companies in 2006, Draft FCB became the biggest advertising agency in Chicago (http://www.draftfcb.com.au/). As at present the Agency in Chicago has approximately 11,000 employees and the world-wide offices including the Draft FCB Australia are headed by Howard Draft, as the Executive Chairman, Laurence Boschetto, as the CEO and president, Jonathan Harries, as the Vice Chairman and Global Chief Creative Officer and Neil Miller, CFO. Draft FCB Australia Agency has acquired a unique distinction of being one of the leading advert agencies in the whole country. This unique positron is attributed to its remarkable accounts growth with best of clients. Australia and New Zealand Agencies were opened simultaneously with the merger in June 2006. Strategic management perspectives and the recent organizational successes in Australia that run through a haze of corporate and organizational assumptions and goals have been invariably influenced by the relative importance of dynamic event-oriented outcomes including those related to the benchmarking organizational efforts (www.adage.com/datacenter/2008) . 1.1. Organizational Structure of Draft FCB The organizational structure of Draft FCB Australia is said to be unique in that it's probably the only organization with a unified agency structure thus delivering its communications services through-the-lines capabilities to a diverse and complex group of clientele. The operational structure in regional agencies like that of Australia and New Zealand is democratically structured with a country head or director in charge. The company's optimal operational structure with the Integration Committee of 35 individuals is headed by a president and a world chief creative officer. Three major tiers can be identified in its managerial and operational hierarchy. The first tier at the top is occupied by the President, the Chief Executive Officer and the Global Chief Creative Officer. Immediately under the above triumvirate comes the layer of Integration Committee Members who assume both executive powers and accountability to the top management (Briggs & Stuart, 2006). Each Committee member is responsible for the design, planning and implementation of the company's integration policy in a few assigned countries. The third tier is occupied by those senior managers whose responsibilities include the planning and execution of strategy. Thus many responsibilities for day-to-day operational management of Draft FCB Australian Agency are assumed by this Integration Committee. Despite the fact that country operations are carried out on an individual unit basis for the accounting and financial purposes, there is substantial interlinking of operations at the global level so that management structures become integrated at all levels of the operational structure. 1.2 Draft FCB Australia agency style According to Michael I. Roth, the Chairman and CEO of Interpublic which merged with Draft FCB in 1996, Draft FCB has been performing well in every aspect of the business. Its new management structure and model have been tested across the globe in all major global markets. The senior managers at Draft FCB are entrusted with new roles under the new system and are expected to deliver through-the-line capabilities of the company while still functioning under a well supervised unified agency structure. Integration of managerial functions at the bottom of the operational structure reflects the top management's concern for a continued evolution of the vision of the founders of the organization. This strategic vision is further reinforced by a desire to integrate a well defined system of work ethics by the top management. (Barney and Hesterly, 2007). Thus creativity and accountability are the key words in the mission and the vision of the company. Though, the company has branches in 120 odd countries a single thread like vision cuts across its global operations thus radiating the inherent message down the line to the bottom level of the organizational hierarchy. In other words the management philosophy of the organization is charcterized by a highly pervasive culture of creativity and responsibility on the part of each employee (Fulton, 1986). The leadership strategy of Draft FCB, according to Draft, is "globalist" and is based on creativity and accountability to the client. This vision has enabled it to grow by threefold between 1997 and 2009. The ever increasing clientele is a good barometer of this success story based on a system of values that seek to integrate the functional strategy of the company with the work environment. This organizational culture has led to the current level of success and achievement of the company. 1.3 Profile of Client Base After the merger, Draft FCB has been able to win over accounts from major market payers. The list includes such names as Kraft, Starbucks, Kmart, General Motors, MillerCoors, SC Johnson, Yum! Brands, Nestle and Qwest. At regional level BP in Australia, Mexico's Cadbury, Japan's Disney Land, Brazil's Banco Central, Microsoft in Singapore, British Chevrolet and China's Haier are some of the big names that have been won over by Draft FCB. Within Australia the Agency has been successful in winning over big time advertisers with annual marketing budgets running into millions of dollars. The company has been very particular about how and why clients tend to identify success or failure of campaigns with the strategic vision of the project team. For instance BP of Australia was attracted to Draft FCB after many years of advertising experience with other agencies like Saatchi & Saatchi. Haier of China and Brazil's Banco Central had similar experiences. The modern and value-based strategic initiatives at Draft FCB have been well known to these clients 2. Current Status of Agency According to Michael I. Roth, the Chairman and CEO of Interpublic, Draft FBC has been performing well in every aspect of the business. Its new management structure and model have been tested across the globe in all major global markets. The senior managers at Draft FCB are entrusted with new roles under the new system and are expected to deliver through-the-line capabilities of the company while still functioning under a well supervised unified agency structure. Integration of managerial functions at the bottom of the operational structure reflects the top management's concern for a continued evolution of the vision of the founders of the organization. Currently the Agency is focused on the concept of "Little Sheep". In other words in the relationship between big agencies and small agencies in the advertising industry in Australia, small agencies are able to cut in to niche markets with remarkable success as against those big agencies. Right now Draft FCB is doing the same thing. 2.1. Observations at the workplace The company has initiated some highly effective strategic functional processes and systems in keeping with its own strategic competitive environment as determined by SWOT analysis. For instance internal organizational arrangements for communication, quality management, internal value chain management, employee relations, HRM function, budgetary control, cash flow management, motivation and structural changes have been aligned with organizational goals (Salz, 1983). Draft FCB Australia Agency has apparently adopted some strategically important measures such as positive public relations and making the best use of available strategic choices in this competitive environment (Barton, 1955). The Agency has focused its attention on some sound strategic long term goals such as market share, profitability, an increase in the share price, quality improvements, customer satisfaction and brand loyalty have to be achieved by adopting such strategies as good internal and external communication practices, employee relations, good motivation strategies and HRM practices, sound financial management including positive cash flows and better overall performance metrics. Within a very short period of time the company has successfully captured some of the best accounts that were previously managed by rivals like JWT (Lee, 2005). 2.3. PESTEL analysis of Draft FCB Australia Agency PESTEL analysis of Draft FCB Australia has to be conducted against the above backdrops and then posit them against the current performances to determine the future possibilities. In the wake of political, economic, social and technological developments that took place at the country level in particular and at the global level in general, it's all the more imperative to focus attention on the recent and current developments at Draft FCB Australia. (Wilmshurst & Mackay, 1999). Economic influences in Australia assume a very formidable dimension again. Draft FCB Australia was intended to pose a challenge to leading advertising firms both global and Australian. However the global economic downturn developed at this time. Thus many firms were forced to reduce operational costs and thus obviate a probable breakdown in operations (Group, 2008). While cost cutting exercises were not feasible at the existing firm level, average and marginal costs could be reduced through expansion into different segmental niche markets. This was combined with a near universal freeze on wage rates to all staff including the executive and administrative staffs. However, the government's minimum wage policy did not act as a hindrance (Jones, 2000). In keeping with its motto the Agency has been successfully carrying out its programs on corporate governance to a certain extent so that positive social influences by way of demand for its service have been very high in international markets (Percy & Elliott, 2009). For example it's the biggest achievements elsewhere in the US and Europe that have enabled it to have a far reaching impact on its Australian operations too (Hameroff, 1998). 2.4. VRIO framework analysis of Draft FCB Australia Agency However the internal strategic advantages based on the VRIO framework of resource-based advantages are quite different from one company to the other. It's here that Draft FCB Australia leads in some market segments, especially the highly concept oriented segments like services, e.g. banking and insurance (Chuvala, 2002). It has been pointed out that Draft FCB Australia basically with market leadership in many segments including healthcare related advertising has adopted goals-based strategic planning. Its strategic planning process within the organization is focused on both market leadership and strategic competition orientation. Such a business organization when adopting a strategic planning process would necessarily be influenced by its strategic internal environment and the external competitive environment (Spanier & Rash, 2005). Part B 3. Honda Civic Hybrid Campaign - Environmental Campaign 3.1.Strategy of campaign The strategy developed for the Honda Civic Hybrid Campaign has some the best appealing features such as affordability in price and a smart way to save (Williamson, Cooke, Jenkins & Moreton, 2003). 3.2. Execution of campaign The campaign was systematically developed to introduce the functional variabilities of the product - e.g. the advent of the electric motor producing good clean exhaust air in place of pollution caused by the fuel motor. The product details were further enhanced by the strategic focus on Hydrogen FCX clarity and the emission of water vapor. Next the campaign focuses on the most remarkable feature of the product, i.e. the i-VTEC engines would pump fuel only when necessary. Thus the customer's perception of the product is further reinforced with such details about its specificities. 4. Campaign from same product category by a different agency - 2010 Ford Fusion 4.1. Strategy On the other hand the Team Detroit, a combination of five advertising agencies - JWT , Y&R, Wunderman, Ogilvy and Mindshare, The Park- in-house creation lab - is in charge of the of the Ford's campaign for 2010 Ford Fusion. It's the latest sensation, "Ford Fusion", a four-cylinder gas powered Sedan that boasts of such highly advanced fusion technologies. Its clients include such big names like Ford, Shell, Bosche, Brine, Oakwood, United Way, Compuware, Dollar General and Warrior. 4.2. Execution Its focus is on the potential customer. Thus the execution phase of the campaign was so marvelously carried out with adverts on the most popular "American Idol" show. Coupled with internet pop-ups the campaign has been executed successfully. 5.. Comparison between the two campaign strategies The Team Detroit has been known for its strategically focused ad campaign for the Ford Fusion on the Yahoo portal. These internet pop-ups have not been rejected or blocked by many internet surfers as they would most of those unimaginative adverts (Halinen, 1996). The reason for this glorious success of the 2010 Ford Fusion campaign is the fact that the Team Detroit has drawn on its experience as a targeter. On the other hand Draft FCB Australia Agency's campaign has been carried out with skewed focus on one or two features of the product. The emphasis on a clean environment went down well with environmental groups but much less with the potential customer. A successful marketing mix requires the choice of place to be made with reference to its ability to generate sales. The internet is thus the most modern place to advertise products. Except for a few featured advertisements by way of search engine based recommendations, Honda Civic campaign did not show up on a regular basis. In terms of value generated on the basis of sale per dollar spent on advertising the Honda Civic campaign performed very poorly in comparison to the Ford Fusion campaign. 6. Limitations to measurables (recommendations) 6.1 In terms of sales It must be noted here that both the campaigns have not yet come to an end but the recent surveys carried out on the blogger sites of the internet suggest that the Team Detroit's Ford Fusion campaign has generated such good enthusiasm among car lovers and potential customers. Thus Draft FCB Australia Agency must be more focused on viral marketing strategies as adopted by Team Detroit. Viral marketing efforts on the internet would bring in more potential customers thus increasing sales. The latest figures for Honda Civic campaign are encouraging though. 6.2 In terms of PR value for ads and collaterals The strategic Public Relation (PR) execution phase of the Draft FCB Australia Agency's campaign requires much more vigor and focus in terms of adverts and collaterals than what's taking place right now. In terms of value generated through the number of inquiries and clicks on the internet, the Ford Fusion campaign by Team Detroit stands out though yet again financial ratios are much less available to measure the respective success rate of each campaign. After all both the campaigns are still going on and therefore it's difficult to determine with accuracy which campaign is likely to be more successful. Conclusions Draft FCB Australia has been successfully orienting itself to meeting not only the challenges posed by its competitors, both small and big, but also been able to achieve an ever expanding growth trajectory in keeping with its global strategy of being creating value through-the-line. It must be noted here that both the campaigns have not yet come to an end but the recent surveys carried out on the blogger sites of the internet suggest that the Team Detroit's Ford Fusion campaign has generated such good enthusiasm among car lovers and potential customers. Thus the strategic execution phase of the Draft FCB Australia Agency's campaign requires much more vigor and focus than what's taking place right now. In terms of value generated through the number of inquiries and clicks on the internet, the Ford Fusion campaign by Team Detroit stands out though yet again financial ratios are much less available to measure the respective success rate of each campaign. After all both the campaigns are still going on and therefore it's difficult to determine with accuracy which campaign is likely to be more successful (Dealtry REFERENCES 1. 'Agency Report 2008: Top 15 Consolidated Agency Networks', Advertising Age, viewed 18 October 2009, www.adage.com/datacenter/2008. 2. Barnes, R 1989, 'Prop.103 impacts agent advertising. (Agency Services Review)', National Underwriter Property & Casualty-Risk & Benefits Management, no. 37, pp. 17(2). 3. Barton, R 1955, Advertising Agency Operations and Management (Marketing), McGraw-Hill Education, New York. 4. Briggs, R & Stuart, G 2006, What Sticks: Why Most Advertising Fails and How to Guarantee Yours Succeeds, Kaplan Business, Chicago. 5. Chuvala, B 2002, 'A sound signal: advertising agencies say phones are ringing again (Focus: Marketing and Sales)', Westchester County Business Journal, vol. 41, no.38, pp. 13(2). 6. Chuvala, B 2001, 'Advertising agencies face a bad year. 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Ben Mack (Author) > Visit Amazon's Ben Mack Page Find all the books, read about the author, and more. See search results for this author Are you an author Learn about Author Central Rex Briggs (Author) 27. 292229> Visit Amazon's Rex Briggs Page Find all the books, read about the author, and more. See search results for this author Are you an author Learn about Author Central 29.Williamson, D, Cooke, P, Jenkins, W & Moreton, KM 2003, Strategic Management and Business Analysis, Butterworth-Heinemann, Massachusetts. 28. Wilmshurst, J & Mackay, A 1999, Fundamentals of Advertising, 2nd edn, Butterworth-Heinemann, Massachusetts. > Visit Amazon's Robert Solomon PageFind all the books, read about the author, and more. Read More