McConnells upbeat despite recent setbacks

Media & Marketing: McConnells, the largest Irish-owned advertising agency, has recently lodged its accounts for 2004 which show turnover at € 71.5 million, an increase of 7.5 per cent. This represents 5.4 per cent of the €1.3 billion Irish advertising market in 2004.

The company, which has been the subject of takeover rumours for many years, managed pretax profits of € 5.8 million, up from €4.7 million in the previous year, representing commendable growth of 23 per cent.

At the post tax level, it managed € 5 million profit, up from € 4.1 million.

The company recently lost the account of the National Lottery, a lucrative piece of business that is highly prized among agencies. DDFH&B won the creative element of this account while Carat won the media buying element of the business.

McConnells will be satisfied that profits and turnover rose in 2004, the year the electronic voting campaign was meant to be rolled out. McConnells and public relations firm Q4 won a €5 million contract to promote electronic voting but, following controversy, the campaign was called off.

Despite some of these setbacks McConnells secured plenty of other Government work in 2004, including an information campaign for the citizenship referendum.

The company's chief executive Jarlath Jennings said this week the company's balance sheet was looking strong and McConnells was getting on with business. "We will review any opportunities that come up, whether there are companies we could acquire or companies that might acquire us."

He said there had been an impression in the market McConnells had disadvantages in the area of media buying and planning, but this had been tackled. He said measurement tools to do in-depth media research had been secured and, in an effort to deal with its historical lack of scale, McConnells was now involved with fellow agencies, Initiative and Universal McCann in a new buying venture called Magma.

McConnells, established in 1916, hopes this arrangement should give it a strong position as margins come under increasing pressure in the industry. Meanwhile, Government work is still coming in - the company recently won the IDA account.

Retail rivalry

With the entrance of Aldi and Lidl into the Irish market, retailers now jealously guard their market share and like to boast about their reputation for low prices. This week's bulletin from the Advertising Standards Authority of Ireland (ASAI) certainly illustrated this. An in-house advertisement by Dunnes Stores raised the hackles of SuperValu, the chain of stores owned by Musgraves. It read: "Dunnes Stores meat prices still 20 per cent cheaper than SuperValu."

Underneath the strapline there were pictures of four meat products. The footnote, which was not asterisked, stated: "SuperValu prices checked on August 24th, 2005. Customer quotas may apply. See in-store for details. Prices apply to pre-pack only."

This campaign and accompanying qualifications triggered a furious letter to the ASAI from Grey Helme, which works for SuperValu. Grey Helme said the advertisement featured multiple inaccuracies, unsubstantiated statements presented as fact and deliberately misleading omissions.

Dunnes Stores replied that its staff had done their homework and had receipts to back up their case, but the authority was not happy and said the claims were not sufficiently supported