Claire Beale on Advertising

It's a people business - and there's always someone stirring things up

One of the very best things about British advertising is that it is - still - a people business. Despite the relentless internationalisation, the domination of the holding company behemoths, and the cost pressures that threaten to reduce creativity to a mere commodity purchase, and despite the fact that the advertising business is often more about business than it is about advertising these days, people still matter.

You see it in the proliferation of names above agency doors. You see it in the way key accounts and key clients follow their favourite, trusted ad execs (yes, even in this era of pitching by numbers and the rise of the procurement director). And you see it in the relatively unusual but deeply significant way that the ad business offers levels of mutual support that other equally competitive industries would find alien.

So it's no surprise that David Pattison's decision to leave the agency he co-founded 17 years ago has met with such interest from the industry at large. Pattison - the P in PHD - announced his resignation from the Omnicom-owned media shop last week, and I guarantee he will have been overwhelmed by notes of support and offers of help.

It's not just because Pattison has become a fixture on the media agency scene, or because as the current president of the IPA he has assumed a status on the wider industry stage. It's also because, over his time in the business, he has built himself a reputation among clients, peers and colleagues for being one of the industry's most decent and respected operators. In a people business as intimate as this one, all of this guarantees a firm support network.

And the ad industry likes nothing more than a "people" story... well, perhaps the news of a £50m account up for grabs might have the edge, but in a people industry, who's doing what, to whom, and why is absolutely bread and butter for London lunch-tables. So, in between writing those notes of support, there will be plenty of gossip about why Pattison is baling out of the agency that has dominated his life for almost two decades.

I suspect that one of the main reasons has something to do with the fact that, although PHD still bears its founders' names and remains relatively true to its founding principles, the company is now part of a global marketing services machine.

Pattison (a bit miserable, a bit shy but fiercely clever and packed with integrity) launched PHD with the wise Nick Horswell and the ever-brilliant Jonathan Durden back in 1989. It was a time when media was dominated by a bully-boy, pile-it-high-sell-it-cheap trading approach, and quality was rarely as important as price. PHD opened its doors with the aim of bringing high-level creative and strategic thinking to the media discipline, and over the years it has grown into one of the most successful UK media agency brands.

So successful, in fact, that Omnicom snapped it up in 1996 for £12m and, in the last year or so, has driven it out around the world as a second-string media network to the OMD chain. Very few adland entrepreneurs get to see their names exported around the globe quite this way.

So P, H and D made some money along the way and their success encouraged others to follow the entrepreneurial route: PHD spawned Naked, the strategic media hotshop founded by three former employees, which is now itself launching around the world and will no doubt be acquired for a dazzling sum before too long.

But, as any ex-independent businessman will tell you, selling your business comes at a price - a boss. The archetypal adland success story might run like this: bright young graduate gets job in big international agency. Star rises and corporate rewards (big-dick salary, nice expense account, fancy car) swiftly follow. Then our star (by now an industry figure) gets frustrated by the constraints of corporate life, knows his or her name has currency and reckons they can do it better on their own.

So they launch a new agency. Clients come. Star rises and one of the big holding companies (Omnicom, Havas, WPP) offers to buy (back) the talent and the client base.

It's a scenario that's been played out many times over the past few decades, and which has fundamentally shaped the London agency scene. Many of the industry's best, most seasoned executives have been involved in such a start-up.

The problems really come when those stars finds themselves back in corporate life, richer but... well, frustrated by all the stuff that hacked them off first time round. But probably more so, since the ad business is now a truly international one, with ever-increasing network pressures, longer reporting lines and more ruthless cost controls.

Oh, and by this stage statistics show that our star could well have an expensive divorce settlement (a consequence of all those compromises required to build your own business), a couple of hefty mortgages and a vintage car habit to sustain. So the big corporate job and its rewards can become a necessity. No wonder so many of advertising's former entrepreneurs end up feeling trapped within a stifling holding-company structure.

I'm sure something of this sort of frustration will have played a part in Pattison's decision to quit. Now, the perfect end to that adland start-up scenario would be for Pattison to do it all again: launch a new business and shake the industry up all over again. I reckon he's got enough fight in him to go for it. And he will certainly not be short of supporters willing him on.

SO IF you want to make a million, advertising isn't a bad industry to bet your talent on.

If Pattison's example isn't evidence enough, consider the fact that, according to a new report by the accountants Willott Kingston Smith, adland's top executives enjoyed a 39 per cent hike in their salaries last year. The highest-paid executive at an independent ad agency earned a wallet-busting £667,000. OK, the executive in question (anonymous, but I'll give you two guesses) works for arguably the UK's best agency - Bartle Bogle Hegarty - but even so it's the sort of sum that would take most of us years to match.

And if last week's news that Clemmow Hornby Inge (highest-paid director's salary: £559,000) is being courted by Havas plays out, there will be a few more advertising stars joining the ranks of the super-rich.

Figures vary wildly on what CHI might be worth, particularly as the agency's growth rate has been so impressive since it launched in 2001; one rival agency chief executive reckons £60m.

An agency such as CHI, with billings last year topping £142m, can inject dramatic growth into an ailing London outpost of a network agency and shore up a weak management team, both of which could have a real effect on a holding company's share price. So perhaps £60m isn't quite as ludicrous as it sounds.

Anyway, what all of this underlines is that the British advertising industry is still a natural home for entrepreneurs. This is a business where people and personalities are the key assets, where start-up costs are modest, revenue can be built quickly and overheads (assuming the founders can keep their salary expectations in check) are relatively low. It's to be hoped that CHI's example will encourage a fresh round of start-ups eager to make a lot of money. Oh, and do great advertising.

Claire Beale is editor of 'Campaign'. claire.beale@haynet.com

BEALE'S BEST IN SHOW M&S

The shops might be selling baubles in September, but it never really feels like Christmas is coming until the TV ads go all high camp.

One of the best of the yuletide extravaganzas this year comes from M&S, whose agency, Rainey Kelly Campbell Roalfe/ Y&R, has managed to marry a suitable seasonal high-gloss romp with an oh-so-now James Bond theme.

So we get Twiggy and the girls being summoned, 007-style, to the Arctic where - and this is Christmas, so don't worry about logic - there's a magnificent icicled nightclub. And the star turn is Dame Shirley Bassey, belting out "I'm Coming Up".

This is glorious fun, looks like it was a real laugh to shoot and definitely makes me want to sequin up. Another winner from the 32-per-cent-profits-hike retailer. And bah humbug to all those who complained to the Advertising Standards Authority last week that Christmas ads were airing too early.