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Leith Agency

A labour of lost love - Denholm v Faulds

By The Drum, Administrator

February 13, 2008 | 9 min read

Denholm v Faulds

The rivalry - and the reputations of both Faulds and The Leith Agency – was founded upon the two men’s contrasting approaches to marketing. An insight into this came when the Gorman invited each man to suggest an epitaph for the others.

Faulds would only go so far as to say that, whatever was on Denholm’s headstone, it would be beautifully designed, elaborate and ornate and win lots of awards – but would not say a lot about Denholm himself.

Faulds’ would simply read, said Denholm, “Not bad for a boy from Coatbridge.”

“Our focus, unlike Faulds I suppose, was very much the creative work,” said Denholm, “Of course we were also in business to make money, but perhaps rather naively we hoped that if we got the creative work right, the money would follow.”

“What I remember about Leith,” counters Faulds, “was how patronising they were. We didn’t want to do things that were admired. We wanted to run a profitable business. However, I have noticed some stuff on The Drum forum, and even had to check if the postings by one Rodger Stanier were actionable in law.”

The Drum assumed he was joking, so with that caveat in mind we remind readers of some of what Stanier – a Leith founder – said of the agency they referred to as ‘The F Word’.

Pissed off

Claiming that Faulds seemed to have more affinity with car dealership, retail outfit, plumbers etc he wrote: “Faulds Advertising opened its doors a month after Leith. By some lucky timing we had inadvertently stolen his thunder. We heard he was pretty pissed off, we’d pulled the rug from under his feet.”

“For the record,” retorted at Faulds, “We did not build our business on car dealerships. John, what was your first client? Yes, Eastern Western Group, a car dealership. And I wasn’t ‘pissed off’ that you had got in before me. In fact I had never heard of you!”

But ,of course, he did soon get to hear of The Leith and acknowledges: “The existence of both of us fuelled the drive of the other. Things they did got me off my arse.” The spirit of competition was reciprocated, agrees Denholm.

“We were frightened to open the Sunday papers.” Said Denholm: “If Faulds had won anything it really did ruin your weekend.

“But the competition did help us both raise our game. For example, Faulds were always banging on about their planning department. That spurned us into taking on Charlie Robertson, a top UK planner.”

He was also on a top UK salary. The London trade press at one point said he was the highest paid planner in the world.

The Leith Agency was anxious that their creative reputation was at times counterproductive. For example, at that time, the roster for the then Scottish Information Office was dominated by Faulds.

Particularly galling to The Leith was when Faulds picked up the Scottish electricity privatisation account – business that contributed to them making £1m in profit at that year end.

“The public sector is huge now and was then too,” says Denholm. “Faulds got into it very early, and we looked on from the sidelines for what felt like decades. It is very important, but I would rather private business was bigger, and government was smaller.”

“Don’t quote me on that” he adds.

Creatively Irresponsible

Succeeding with the Government business was simply down to understanding the client mentality, according to Faulds, which was different to a brand like Tennent’s, for instance. Denholm says this is when their creative positioning was a problem – particularly when trying to gain business from a conservative minded client, such as the Government.

“They hated us, and thought we were creative prima donnas,” he says. “You get labelled early on. Creative is good, but we didn’t do ourselves any favours. They thought we were creatively irresponsible. As we grew we were able to convince them we were a safe pair of hands.”

Denholm agrees that if you understand the issues the client faces, vital in the Government roster, you’ll get there eventually.

Denholm and Faulds have, of course, now left the daily fury of the creative arena behind them, but neither is at the end of their professional journey. Faulds holds non-executive directorships, which includes chairmanships of the Dunfermline Building Society and Newhaven, while Denholm is chairing recruitment firm Denholm. “I would like to think my biggest achievements still lie ahead,” said Faulds, responding to a question from the floor. Denholm agreed: “I would like to think I had achieved a lot in advertising, but am still able to have a crack at something else, basically applying the same skills in a different area.”

Faulds nevertheless admits to getting a kick from being regarded as a good boss, and is proud to have been told by his former staff that he was a pleasure to work for. The merits of a well liked character are also appreciated by Denholm.

“For an extra few bob, what is the point of going around town and having everybody hates you?” he asks.

However, if they had their lives over again would they spend it in advertising?

“Absolutely not,” said Faulds, “We all worked in an industry that is high stress, and very low margin. That is largely our own fault for selling our services far too cheaply.

“You would not believe the diddies that make a fortune with a fraction of the brain power you get in advertising. It is just scandalous.

“If you want to enjoy yourself, work with interesting people, do interesting things, go into advertising. If you want to make money, don’t.

“The worst thing that ever came along are media independents. They have completely buggered-up the whole thing. It will go full circle, and they’ll become full service industries.”

Denholm however, retains a slightly more positive outlook on the future.

“Optimistically, maybe the wheel will turn the other way,” he argues. “We sell ideas, but we are going through a long, bad patch. What we do is too valuable not to do well. We need to get digital technology out of our system. There has been too much focus on how it comes about, rather than on the idea. It is still a good business to be in.

“But, at the end of the day, it depends what you want; if you want pots of money, don’t go into advertising. If you want to have a really stimulating time, working with interesting people, having an interesting time, then do. There are all sorts of reasons for going into business.”

Both men have successfully sold businesses. What advice would they give to others business owners looking for an exit?

“Actually when we set up we had no plan for an exit strategy,” says Denholm. “If we had been more focused, I might have been doing something different a bit earlier. I would advise someone to have half an eye on the exit at an earlier stage than we did. We built a bit of brand value into Leith. Cello saw it, but we would have benefited from having more of a plan.”

Faulds is even more emphatic. “The way I went about it was totally wrong,” he says. “You have to be proactive, and go out and sell it. I always thought buyers would come to me. Wrong. You have to go to them. Selling your business is about knowing your potential buyer, and packaging it subtly.”

It was not the only mistake Faulds put his hand up to at the meeting. He also says the branding of his agency was wrong.

“When I started, I had no money, no clients and a restrictive covenant,” he says.

“I only had a reputation, which was something. But it was a mistake. I shouldn’t have called it Faulds and wouldn’t do it again.”

A monster

Both men agree though that after overcoming the difficulties of start-up, there is an optimum size at which business can function. A staff of around forty, they conclude, is sufficiently big to be ‘enough’.

“Any small business has to grapple with larger companies,” says Faulds, whose business had 170 staff at the time he left. “You are incrementally winning, and as you do so, you become a bigger company.

“But don’t build a monster.

“Faulds was at its best when we had forty or fifty people. The teamwork was great, everyone knew each other. Then we got bigger.”

But in Scotland the end of the big agency is nigh according to Faulds. Lack of new business opportunities are effectively turning Scotland into a relative ‘cottage industry’ when compared to the likes of London.

“I don’t believe Scotland will ever see an agency the scale of Faulds or Leith again,” he adds.

Talk of tough trading conditions ultimately led to the topic of the sad final chapter of Faulds Advertising. On this front, Faulds is disarmingly honest.

“I wanted out for a long time,” he said. “It is a hard shift. Clients are unrelenting in their unreasonableness. It is a young person’s business. I thought it was beginning to repeat itself. My only regret is that I didn’t get out earlier.

“Don’t get me wrong. I loved advertising,” he adds. “I have been very lucky, and I loved my career, but it’s not the priesthood.

“When it went I was terribly sad for the people that worked for me, but it wasn’t my dynasty. I wasn’t crying in my tea.”

“I wasn’t terribly bothered at the demise of Faulds,” says John Denholm, in contrast, and to huge laughter. And concludes by summing up succinctly the ultimate legacy of all of us in this nebulous trade – something which will have special resonance at 1576.

“People get other jobs. Life moves on. While you are in the thick of it, it is your whole life. When you leave, you move on to something else.”

Thanks for the memories, guys.

Leith Agency

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