Coltas and Tiny
Blake and Craig: still looking on the bright side despite a restructure looming.In the Scottish advertising industry the Coltas story has surely been one of the most envied of recent years.
The agency has always been a heads-down, hard-working example of Scottish determination. Building up from a small retail base in Glasgow\'s distinctly unglamorous Rutherglen, Coltas has grown from being a \'one to watch\' to one of Scotland\'s biggest communications groups.
Last year, the agency struck gold.
The Tiny Computers account, reportedly worth £40m, surprised just about everybody by travelling north of the Border and moving in with Coltas.
The agency, already expanding with a call-centre operation and separate new media company It\'sNotRocketScience, almost overnight became one of the biggest agencies outside London.
Beneath the veneer, however, all was not well with Tiny and last month the administrators were called in after the company\'s credit insurance notice was withdrawn.
Then, in yet another strange development, the troubled Tiny was scooped up by former rival Time Computers. Although no doubt an exciting development in the field of PC retail, the deal has cast a shadow of uncertainty over the future of the Tiny advertising account, which has, for the time being at least, now moved out of Coltas.
The agency itself however, is claiming to be viewing the development as a positive one, stating it has been anything but caught off-guard by Tiny\'s downfall.
However, although Coltas say they are confident they were not confident enough to speak directly to The Drum channelling all enquiries through its PR company Hatch Group.
Hatch Group\'s Jeremy Hamilton said: "It didn\'t come as a surprise to Coltas. They were prepared. Coltas was the creative agency, but they didn\'t handle the media buying, which was outsourced to Golley Slater. Coltas did well on the account; over Christmas they did a very successful campaign and really managed to carve a place for themselves within the market."
Undeniably, the account\'s move has had an effect on the agency though. Hamilton admitted that: "Coltas will be making some major changes in terms of staffing over the next couple of months" and industry sources have suggested that as many as ten staff have been laid off already as frantic phone calls are made to creative departments looking for work on both sides of the country.
The cut-backs have apparently been made across account management, studio and creative departments.
Another blow came recently when Steve McLaughlan resigned from his business development post to move back into the press arena, as managing director of RIM Scotland.
Despite the gloss being applied to the loss it will no doubt hit the 130-strong call centre pretty hard, which handled much of the telesales and enquiries for Tiny, as well as activity for ScottishPower, WL Gore, Terrormobile and the Cauldwell Group.
Coltas also picked up the advertising business for Sports Connection late last year to sit alongside its clients such as the Daily Record, Radio Clyde, Semi-chem and BBC Resources.
At present the Tiny account is in a state of transition. Time Group marketing manager Brian Trevaskiss says: "Basically we\'re bringing things into the Time Group and we\'re quite self-sufficient with our advertising and marketing requirements. We\'ve got a review going on at the moment for Time, Tiny and our new brand Computer World and we are currently deciding whether we will take the accounts in-house or call a pitch.
"I like the work Coltas has done for Tiny and we\'ve told them that should we call agencies to pitch we will definitely contact them."
Fortunately, with the growth of Coltas over the last couple of years the advertising side of the business is no longer the only one bringing in revenue. In fact, the company\'s directors have pumped more than £3.5m into developing Coltas\' offering to its clients.
Hamilton was keen to point out that "Coltas is now an integrated group and the part played by Tiny in the overall business was small." The group now consists of the original Coltas advertising agency, It\'snotrocketscience, a call-centre operation and telecommunications and consultancy arms. As the company was built up and began to diversify, director Joe Blake was perfectly at ease with admitting that the move was as much about self-preservation as expansion. Last year he stated: "When a business like Sports Division sells up, that\'s £7m-worth of business straight out the door. You cannot replace that kind of business easily in Scotland. And then DX Communications and Texstyle World do the same. All of a sudden you become a victim of your own success, rather than your client\'s success.
"So our business plan was that we had to diversify in other areas of the communications industry. Therefore we move into 2002 and there is an advertising slump which we don\'t think will affect us because of our client base. We can fall back onto the additional skill sets that we now have, such as the call centre, internet, research and consultancy."
All of these measures seem to have been put into place with a rather chilling sense of foreboding. But nevertheless they may well act as the safety net for Coltas in the wake of Tiny\'s departure.
This month It\'snotrocketscience is to unveil a new software package, which has been in development for a year and cost around £500,000 to complete. The product, called Pollenate, will aim to rival Microsoft\'s Powerpoint and is to be launched in Prague at an international design conference.
"People aren\'t blown away by Powerpoint anymore," Coltas claims. "The reason is the technology has moved on so much. That\'s where Pollenate comes in. It\'s like watching a digital movie."
Also, the end of the relationship with Tiny is apparently now opening doors for Coltas which were previously locked tight. "Coltas are in talks with other PC manufacturers now the relationship with Tiny has ended," said Hamilton. "They\'ve now established themselves as specialists in the field of PC marketing. This is not a major setback - they saw it coming and they are moving on."