Magazine article Marketing

Rover Breaks the Mold

Magazine article Marketing

Rover Breaks the Mold

Article excerpt

Car firm Rover has challenged traditional client/agency relationships with a decision to set up a new agency to handle its marketing.

Contrary to earlier rumours, the new marketing agency will not be an in-house operation but totally separate. It will be owned and headed by Rover's top marketer Kevin Morley, who will nevertheless remain a Rover employee with a seat on the board.

Morley has appointed a head-hunter to find 50 new staff, many of whom will come from the agency world. He has already signed up ex-BSB Dorland chairman Jack Rubins for a senior post in the new organisation.

The still unnamed agency bodes ill for Rover's current advertising and below-the-line agencies whose contracts are now under question. It will begin life working solely for Rover but it will tout for business outside.

A second account is said to be lined up already. But a Rover spokesman remains cautious. "Only if this company is providing the right level of service to Rover would we accept it could work for anyone else," he says.

Rover's initiative is being simultaneously interpreted as a vote of no confidence in agencies' ability to meet its needs and as a desperate cost-cutting measure. Rover itself claims the new operation will be the UK's first truly integrated marketing services agency, and will lead to much greater cost effectiveness.

"If you're dealing with one company rather than five, you're bound to make savings," says spokesman Michael Kennedy. It is "premature", however, to say just how much Rover might save. "It's an enormous calculation." Rover's existing marketing department won't be affected, he adds.

The move follows similar initiatives by Daimler-Benz and Ciba-Geigy (see above).

The biggest questionmark over the new firm is the potential conflict of interest between Morley as Rover marketer, and Morley as owner of a service supplier. But says Kennedy: "Obviously we don't see it like that because otherwise we wouldn't have been able to take this step.

"There is no question of Kevin being able to make unilateral decision on this company. There are always checks and balances operating in a company like [Rover] which avoid that sort of thing happening."

He adds: "It has been discussed at all the appropriate levels both at Rover and at [parent] British Aerospace--and all the appropriate questions have been answered. …

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