Pitch me baby, one more time

When HSBC's $600m-plus worldwide advertising account came up for grabs, the British firm WPP resolved to win
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The Independent Online

Over the past four months, advertising executive Toby Hoare has clocked up so many first-class air miles that, by way of a thank you, Lord Marshall, chairman of British Airways, has invited him to drinks at the House of Lords.

Over the past four months, advertising executive Toby Hoare has clocked up so many first-class air miles that, by way of a thank you, Lord Marshall, chairman of British Airways, has invited him to drinks at the House of Lords.

Hoare's itinerary included two trips to Mexico City, three trips to the US, three trips to Hong Kong, plus sundry other flights to Brazil, Dubai, Australia, India, Malaysia and Taiwan."I've probably flown round the world several times since January," says Hoare wearily. "I know I haven't spent more than three consecutive nights in the same bed since then." Even by international business standards his schedule was extreme. But then Hoare had an extreme motivation. He was in hot pursuit of an enormous prize: the $600m-plus worldwide advertising account of global banking giant HSBC.

It is the biggest single contract in British advertising history, the biggest contract to come up for grabs anywhere in the world for 18 months and, in the end, the biggest win in the 17-year history of Hoare's employer, the advertising and marketing group WPP. Some commentators say the pitch may even reshape the entire $350bn-a-year global ad industry.

The pitch came about when, late last year, HSBC decided it wanted to keep its advertising line "the world's local bank" but it needed, for the first time, one company to handle all its commercial communications in every one of the 79 countries in which it operates. Previously it had had more than 200 agencies around the world.

Hoare's role was to make sure that every one of the 700 WPP people working on the pitch, from New York to Kuala Lumpur, presented a united front and showed that they could work together seamlessly.

If Hoare's to-ing and fro-ing was extraordinary, the final presentation, at the Knightsbridge offices of WPP's J Walter Thompson advertising agency, was little short of jaw-dropping say observers. In an industry renowned for the creativity and brio of its presentations, WPP's pitch was truly epic.

An entire floor of the JWT building was converted into a walk- through theatre with nine different venues. In the first, an astonished team of HSBC executives were confronted by the sight of a dancer fronting a troupe of drummers who changed their style from reggae to tabla to rock 'n' roll to illustrate, in the words of Craig Davis, J Walter Thompson's creative head, "that the world moves to the same beat but with different rhythms".

Executives made presentations in other rooms and actors played out scenes from proposed advertisements. And in a mark of just how much Hoare and his colleagues wanted the account, one of those scenarios even starred WPP's multi-millionaire chief executive Sir Martin Sorrell, dressed in morning coat to play the role of a business magnate in a commercial aimed at the very rich.

Despite the weeks of effort, Hoare says he didn't do the bonkers dance of a lottery winner when he found out two weeks ago that WPP had secured the business: "I felt a mishmash of emotions," he says phlegmatically. "I was thrilled, proud to be part of the winning team. But I didn't go out and get hammered. I suppose I realised that the real hard work of carrying out our promises had just begun."

The win caps an extraordinary 17-year journey for Sorrell from complete unknown to one of the very few British figures who can be said to truly dominate their industry. He founded WPP in 1986, after serving as finance director to the Saatchi brothers for eight years.

When he acquired a small listed manufacturer of shopping baskets called Wire and Plastic Products, he embarked on an acquisition spree, borrowing heavily to buy some of the world's best-known advertising companies, including Ogilvy and Mather and J Walter Thompson.

In the recession of the early Nineties the whole thing nearly imploded under the mountain of $800m debt that Sorrell had acquired. But he soldiered on and by the late 1990s, WPP had become the biggest marketing-services group in the world.

Advertising industry insiders suggest that the entire pitch for HSBC cost WPP the best part of £1m. The other two contenders for the business, the US-owned IPG and Omnicom groups, are thought to have spent similar amounts.

But as Sorrell prepared himself for his cameo role with the thespian question "what's my motivation?", surprisingly the answer would not have been "money".

Although $600m sounds like an obscene amount to spend on commercials, it certainly won't be going into the wallet of Toby Hoare - or Sir Martin Sorrell, come to that. Probably 90 per cent will go to media owners, such as newspapers and television stations. The ad agency will be lucky to see 10 per cent in fees and commissions. On that $60m it might make profits of $8m. Better than a poke in the eye, but hardly untold riches when you consider the hundreds or even thousands of people who will work on the account all round the world.

The real driving force behind the pitch was in fact the race for globalisation - in both the banking and advertising industries. To be sure, $600m is a large advertising budget, but it places HSBC only near the top of the first division rather than in the premiership of global advertisers. There are at least 20, mostly American, corporations that spend more than $1bn on advertising a year.

However, under its ambitious chairman John Bond, the former Hong Kong and Shanghai Bank aspires to join that elite group of global brand names. In little over 10 years it has gone from being a regional player in Asia with 30,000 employees, to one of the most global of banks, with more than $1 trillion in assets, nearly 10,000 offices and 300,000 employees.

It is now the second-largest financial institution and the eighth-largest corporation in the world. "To become a serious global player, they need a serious global brand," says Hoare. But just as there are winners in this story, so there are losers. Principal among them is Interpublic Group whose agency, Lowe, best known for its work on Tesco and Stella Artois, created the HSBC tagline "the world's local bank". Lowe's loss of such an important account has prompted the advertising magazine Campaign to question its very survival.

Some senior Lowe executives, meanwhile, are saying privately that the pitch may even undermine the existence of its holding company IPG, the world's third- largest advertising group. "This is a test of whether IPG adds any value to its agencies. It's a test IPG can't afford to fail," he said before the result was announced. It did.

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