StopPress understands BNZ has ended its retainer agreement with Colenso BBDO.
An advertising agency retainer is a payment method whereby the client agrees to pay the agency a specific amount of money per month (or annually) for all work performed on the account.
A spokesperson from BNZ's communications team would not comment on the details of its partnership with Colenso BBDO, but did confirm that there had been recent changes to the agreement.
"As you’d expect, we don’t share details of commercial contracts in the media," the spokesperson said. "However, as with our other strategic partners, we continually review how we're working together to deliver the best outcomes for our customers and brand. This has enabled us to recently establish a new operating model."
A source familiar with the account has revealed that the payment arrangement has now been shifted to one based on the work delivered.
The source estimated the BNZ retainer brought in around $2 million a year in revenue to the Clemenger Group and estimated around 15 people worked on the account. It is thought that number has been reduced substantially since this decision was made (Deborah Simpson, who was helping to run the account, is among those to have departed the agency).
Asked about the reduction in staff working on the account, a PR spokesperson for Colenso would not comment on specific numbers, but did provide the following statement:
“We constantly work with all of our clients to ensure that we have the best mix of talent and the right mix of skills to deliver the freshest ideas for our clients. The BNZ account is no exception. Today, it’s fair to say that we have a more diverse group of talent servicing the bank than ever before.”
Managing director Scott Coldham also points out that Colenso BBDO is still the lead creative agency on the BNZ account and he remains optimistic about the partnership in the future.
“Over the last five years Colenso and BNZ have built up strong partnership and our focus continues to be firmly set on working with the BNZ to help drive their creative strategy and delivery," Coldham says. "We are still retained by the BNZ to help drive the brand forward. As with all working relationships we continuously review how our model can better service the needs of their customer base, and how we work together to deliver the best creative and commercial outcomes for both parties.”
Departure of Craig Herbison
This news comes shortly after the departure of BNZ's director of retail and marketing Craig Herbison, who started with the bank in late 2011 and has worked closely with the Clemenger Group over the years.
In a statement, BNZ CEO Anthony Healy singled out Herbison's work establishing the 'Be Good With Money' brand, "which will stay with us for a long time", the success of the broker hub and the creation of small business hubs in Christchurch and Hamilton. He also said the usual things about Herbison resigning to 'move on and look for new challenges', but when asked to comment on the exact circumstances of his departure, the BNZ spokesperson said: "It’s BNZ policy that we don’t comment on private employment matters regarding any employee, as we are unable to, owing to the Privacy Act."
Herbison resigned from the bank in September and is yet to be replaced.
His responsibilities have in the interim been picked up by director of products and technology David Bullock, who has taken on the role of acting director of retail and marketing.
"As you’d expect our search will be rigorous and take some time," the spokesperson said. "We’ll be sure to be in touch with any appointment announcements."
Pros and cons of a retainer
While some bigger clients keep their agencies on retainer, it is increasingly rare (partially because clients now tend to work with a large number of agencies) and it largely depends on what the organisation is trying to achieve through its marketing.
Speaking broadly about retainers, Datamine managing director Mike Parsons says there are various pros and cons that marketers should be cognisant of before deciding to go one way or the other.
Parsons says that one of the main advantages of keeping an agency on retainer is that it reduces the amount of friction—and approval steps—necessary to get jobs done.
"Considering the broad move of most organisations towards agility, innovation and disruption, this friction is a killer to making progress," he says.
Parsons explains that this flexibility can, however, also be to the detriment of the retainer relationship if there isn't a clear strategy in place.
"The obvious downside of a retainer is if it’s spent doing work that is not material to a desired, meaningful strategic or tactical outcome," he says.
"To maximise retainers, I think it’s important for organisations to be structured in their approach and have good roadmaps and prioritisation ... Both parties have a responsibility to ensure the investment is being utilised in a way which delivers a good ROI. I find that happens with a good relationship governance rhythm which includes regular sessions where everyone stands back and assesses how it’s going, with honesty."