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Faulds

By The Drum | Administrator

July 4, 2003 | 8 min read

Faulds' recently installed MD, David McGlone says the agency will return to London in the future

News Feature

A combination of tough economic conditions, the loss of two major clients and a fair measure of bad luck has forced Faulds to retrench from London after less than a year. Gordon Laing speaks to Faulds MD David McGlone about the Scottish agency’s foray into the London marketplace.

After months of speculation the deal was signed and Jim Faulds handed over the keys of his agency to the MBO team. Since that day at the end of 2001 there have been many ups and downs for the agency under its new owners.

First came the departure of (or the refusal to repitch for) the Royal Bank of Scotland business. But that was tempered by the signing of a deal to expand Faulds into London with the takeover of Malcolm Moore Deakin Hutson. That was followed with more good news in the shape of the £6m NEC account and connections reportedly being forged with Japanese giants ADK. Boom. Creative director Billy Mawhinney leaves to return to London. But again, good news is quick to counter bad as it is announced that Faulds is in the final pitch for the multi-million pound Capital One business. Bang. In perhaps the biggest blow yet Kwik-Fit leaves. The future looks less certain. Capital One appoints McCann-Erickson. Yet again Faulds bounces back with the announcement of Standard Life Bank. But it isn’t big enough to avoid major change. David McGlone replaces Dennis Chester as MD as Chester takes the seat of chairman. An undisclosed number of job cuts are made and in a last blow of indignation, Faulds shuts its London office after just a year.

Maybe quite rightly then, David McGlone is being cautious. Honest, yet cautious.

“I guess looking back, the timing wasn’t great. Everyone was struggling and agencies that perhaps wouldn’t have been fighting for the same sort of business that we were fighting for had retreated back into that territory. Agencies that wouldn’t have looked at a £2 or £3m account of old, are now fighting tooth and nail for that business, with fewer and fewer pitches going around.

“We got on some fantastic pitches down in London, including Capital One and we also did some great work with Danone, but that became victim to European policies, and didn’t come to fruition.

“When we lost Kwik-Fit obviously the impact was such that we really had to look at all the elements of the mix. London hadn’t won any new business, as much as it had come close, so we took the view that we needed to downsize in London. Anna (Hutson) and Graham (Deakin), in account management and planning, were replicating roles in Scotland, and given the absence of business in London, there didn’t seem to be any logic in keeping that commitment.

“We looked to retain a presence through creative directors Tony (Malcolm) and Guy (Moore) in London, but they were offered the job at Weiden and Kennedy and when they moved on, in a sense, that forced our hand.”

However, as the recent history predicts, good news follows bad and Faulds now retains several partnerships with agencies in London (Consolidated PR and designers Unreal) that it has forged links with.

“We haven’t turned our back on London,” continues McGlone, “we have just decided that it would be financially prudent not to have the size, scale and formalisation of the office right now.”

Furthermore, McGlone reveals that Faulds is already in talks with ad agencies in London as the agency continues to look to strike up partnerships in the city.

“We will have a future in London again, and that won’t be dependent on the current market picking up. What is dependent on the market picking up again would be our willingness to bank roll a move back down south. We are not against having a presence down there, but perhaps we will look more at partnerships rather than having the formalisation and cost of a bricks and mortar agency. When things pick up we may look at doing that again, but it would have been irresponsible of us to continue with what we had in terms of the cost of the operation against the level of business that was coming in.”

When Faulds took over MMDH the London-based agency was experiencing a few problems of its own, so there wasn’t a huge, ready-made client population.

“We put a commitment behind winning new business, because if we didn’t, the level of business that was left wasn’t sufficient to sustain a way forward,” says McGlone.

That didn’t happen, says McGlone: “We took a hit on London. There is no way of disguising the fact that we made a financial commitment and due to the market conditions it didn’t come off. We took what we thought was a considered risk at that time, but the markets changed and the turn of the cards didn’t go our way. Had Capital One gone the other way we would have had a good sized, very profitable London agency.”

Kwik-Fit is notorious amongst the Scottish ad industry having left a number of crumbling agencies in its wake. Although some have survived, the initial hit is hard.

However, Faulds learned from others’ lessons and created a stand alone department to service the account, perhaps building a ready made shield against the effects of its departure.

“I think that Kwik-Fit represented a far bigger slice of the balance sheet of the other agencies than it did on ours. We also took the decision when Kwik-Fit came on board to effectively ring-fence that piece of business. Partly because it deserved a certain amount of discipline and input and partly because we didn’t want the retail elements of that campaign to make other clients suffer. So, in a sense, it made it far easier to react to the changes because there were some very clear areas that Kwik-Fit made demands on. There was never any danger that Kwik-Fit was going to have a long term effect, to the extent of putting us under as it has so many other agencies in the past.

“We’ve acted prudently and we are now in good shape to move forward. Lean, fit and hungry. A change like this certainly makes you hungry, partly by need. You have to pay the bills and we are committed to having a profitable agency. We are not prepared to run at a loss. Also it gives you a desire to prove a point.

“As much as you understand the commercial reality of business movement you always take it a bit personally, but most of the time you know that it isn’t and you just have to roll your sleeves up.”

As the rebuilding gets underway the agency is embarking on an aggressive new business drive. Already it has secured work from Standard Life Bank and Pokerroom – a Swedish-based online casino, the seventh largest in the world – which it is launching into the UK and US. As part of the rebuilding process Faulds is looking to recruit a new creative director to replace the departed Malcolm and Moore: “We want to put creative back on the front foot. Tony (Malcolm) and Guy (Moore) were good guys, very well respected. Billy Mawhinney was a big name. We’ll be looking for an established creative director or a real up-and-coming creative director from one of the established agencies. But we will take our time to get it right. We have a great team of creatives up stairs that will do a fantastic job in the mean time.

“One thing that you can’t deny is that we have a whole load of challenges ahead, and that is the sort of thing that you should relish, not shy away from.”

So, perhaps against the odds Faulds is still hungry. Let’s hope that it will get its bite back too. It may need it. The Scottish Executive will hold its statutory review next year. Can Faulds retain the highly sought after piece of business?

Guardian Media Group is rumoured to be looking to sell Auto Trader. If the sale goes through to a venture capitalist, in a similar case to that of Kwik-Fit, will Faulds keep hold of the business?

Whatever happens, McGlone is ready for coming challenges.

Captions:

Below: (left) Faulds’ recently installed MD, David McGlone, says the agency will return to London in the future. (right) the directors of Faulds in London, who have now departed.

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