DDB forced to make cuts after dual account losses

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  • November 15, 2013
  • Ben Fahy
DDB forced to make cuts after dual account losses

David Walden used to say that those working in advertising were paid danger money because you never knew when clients would walk out the door. And, after losing a couple of accounts recently, DDB NZ has felt the burn. 

Chief executive Justin Mowday says the loss of Volkswagen and George Weston Foods to Colenso BBDO has been the catalyst for the changes.

"It's an unfortunate part of the advertising business," he says. 

He says it has grown other sides of the business recently, particularly Dynamo, but it needs to manage its expenses and labour costs are usually the biggest cost for any agency, ahead of property. 

He wouldn't go into specifics about the number of job losses because he’s "currently working through a process with staff", but it’s thought to be in the single digits. 

He says DDB is "really good at looking after people", with lots of staff benefits and development opportunities, and some of the credit for that can be placed at the feet of HR director Karen Sew Hoy.

"So we don’t take making people redundant lightly," he says. 

He says it has looked at a whole lot of areas across the business, and while group business director Greg Jones has offered to take voluntary redundancy and is either heading overseas or starting his own thing, he says no other group business directors or creative directors are departing. 

Jones says he's had a great time at DDB working with "some great clients, talented people and doing a lot of great work that I'm proud of" over the past seven years.  

"But our industry is changing quite a lot. There are more and more opportunities popping up with tech-based companies and a lot more content is being produced. And that combined with 20 years of me saying I'm going to live overseas, I thought I should do something about it and jumped at the opportunity."

He says the initial plan was to take a big chunk of summer off. But already he's found there are a lot of consultancy opportunities around.  

Mowday says Angela Watson, who is returning to Colenso BBDO as group business director, was not among those made redundant and had resigned before this process began. Zoe Alden is also set to return to DDB after maternity leave.

We had been told that up to 20 staff were leaving, with a rumour that a lot of the McDonald’s work that is shared between New Zealand and Australia was moving to DDB Sydney in an effort to protect the business from Leo Burnett. But on both counts, Mowday says that’s "absolutely not true".

“We’re in discussions with McDonald’s about what our scope of work will be next year, but we’ve got a massive amount of work to do in New Zealand, with a roll-out of Georgie Pie and the local marketing campaigns and initiatives.”

Not surprisingly, it's thought DDB is putting a lot of effort into the current BMW pitch in the hope of reversing this trend of recent losses. 

Across at Colenso BBDO, Scott Coldham, head of account management, says Watson’s breadth of experience across a wide range of categories and strategic disciplines makes her a very exciting asset. 

“The agency has not only been building its capabilities with pace over the last 18 months, but has also grown steadily in scale through winning new business. To maintain that momentum and service our clients well, two things are really important: we need to continue to hire the best people and we need to continue to innovate how we work. Ang will help on both fronts … She’s is a wonderful person, an amazing creatively driven suit, a mentor, a mother of four and a great cultural asset to have back in the building. She will make our agency better.”

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