Orange's appointment of Mother as creative agency on its £43m account has put brand and marketing director Jeremy Dale at the centre of a storm of rumours regarding his decision.
Announced last Thursday the appointment, which reunites Dale with the agency that created ITV Digital's 'Monkey' campaign, follows a four-way pitch run by the AAR including WCRS, Bartle Bogle Hegarty (BBH) and M&C Saatchi. But allegations have sprung up around the pitch process and Dale's methods, with some industry insiders crying foul and others pointing to an absence of consumer research usually used to test creative proposals.
"If I wanted Mother from the start I would have just appointed them," says Dale. "I wouldn't have put four of London's best agencies through a pitch process if it was a sham. Mother produced the creative work that was closest to what we would run."
It was Mother's failure to come up with a creative 'silver bullet' that left pitching agencies believing the decision was still wide open at the end of the creative stage last Tuesday.
But two days later, Dale's mind was made up. The close relationship he shared with Mother was enough to swing the business its way. While some insiders say Dale has ended up with the agency he wanted all along, others believe Mother has done no more than leverage its advantage.
Gwyn Jones, managing director at BBH, says: "We didn't have any impression other than we were being completely fairly dealt with. If Mother had more access, they were doing what any agency with an existing relationship with a client would do. In many ways this was the bravest decision Dale could have made."
The first Orange work by Mother is expected to break in the New Year.
"The ads will have an intelligent wit about them; they won't be slapstick humour," says Dale, who is keen to stress that he has "moved on" from cuddly animals. "Orange always had a clear tone of voice and vibrancy. The work will keep true to the Orange brand, but reinvigorate it."
Mother's big challenge will be to create ads of equal or greater impact to WCRS' launch work - but of relevance to a market and company that has seen many changes.
Having entered the market in 1994, in the wake of its big rivals Vodafone, Cellnet and One 2 One - since rebranded as O2 and T-Mobile - Orange received plaudits for its marketing.
A transparent, customer-friendly service offer, combined with a clear identity and ground-breaking advertising, enabled it to swiftly make up ground on the other three network operators and to build what was arguably the first strong consumer brand in the sector.
But it has recently been suffering from confusion in terms of brand direction.
This review followed the resignation by Lowe, which jumped before being pushed after it became clear that Orange was dissatisfied with the level of staff turnover on its account and the quality of its creative work.
Moreover, Orange is pulling out of its Formula One sponsorship of the Arrows team, on which it spent about £20m a year, after a three-year link.
Add the fact that Orange is making 270 redundancies - some of which will involve those in marketing jobs, in a bid to make the company "more nimble and avoid duplication" - and it becomes clear that Orange is at a critical point in its development.
"Orange has been one of the best marketed brands in recent British history," says BBH's Jones. "It was brilliantly conceived and brought to life by the marketing team under Chris Moss. The legacy of that success makes it difficult to know how to continue."
Another reason Orange must now lift its branding game is the improved marketing efforts of existing players and the arrival of Hutchison Telecom, whose parent Hutchison Whampoa originally launched Orange before selling it off, with the UK's maiden 3G phone service, branded 3.
In its early days, Orange was the archetypal challenger brand: doing things differently and achieving great cut-through as a result. By demystifying the billing process and making mobile telephony seem a lot more consumer-friendly, Orange saw its customer base swell swiftly into the millions.
Now, though, the circumstances it faces are very different. Orange, with 12.8 million UK customers, is no longer a challenger brand. By some measures, including total subscriber numbers, it is even the market leader. The mobile market has also matured close to saturation and subscriber growth has slowed.
According to Oftel, subscriber growth across the industry in the first quarter of this year was 3%, down from 8% in the same period last year.
In all, there are now over 46 million mobile subscribers in the UK, which means that growth for Orange and its rivals will come from luring customers away from other networks and by upping the value of existing subscribers.
Future success for Orange will be dependent upon the impact of its marketing.
But the other players have invested heavily in brand building over the past couple of years, taking a leaf out of Orange's book and reducing its level of stand-out.
"The marketing strategy has always been to put the customer at the heart of everything we do," says Dale. "It's always been about being straightforward and honest and friendly. One of the challenges we are solving at the moment is making sure the services we bring to the market are what customers genuinely want. It's about changing consumers' behaviour; helping them understand the benefits of the technology, not shouting at them about technology."
Dale concedes that Orange failed to get the best advertising out of Lowe.
In part, he feels, this is due to the fact that other companies, both inside and outside the mobile sector, have "copied the type of advertising" that helped make the Orange name. Dale and his colleagues hope that new ideas from Mother will help reinvigorate Orange - but no one is talking about going as far as a brand repositioning.
"The brand is not at a turning point," argues Dale. "It has always had a clear direction about what it stood for and where it is going. There is nothing wrong with the customer proposition or brand promise."
Charles Vallance, founding partner of ad agency Vallance Carruthers Coleman Priest, which has O2 as a client, worked on ad strategy for Orange during his five years at WCRS.
"I used to describe Orange as the antidote to many of the ills in the market," says Vallance. "The trouble is, now everyone else has the antidote. Orange drove out all the hidden costs and nastiness in the market that Vodafone and Cellnet used to get away with. Now Orange has to drive up revenue and the trick is doing it in a way that is motivating and interesting for customers."
Partners BDDH chief executive Nigel Long, who was group account director at WCRS at the time of the Orange launch, thinks the brand has become "trivialised" and appears to be a "marketing confection".
Long thinks Orange should associate itself with the impact of telephony on people's lives, maybe by touching on big issues in society, in the process staying true to its launch positioning as owning the future of communications. "There is no brand better suited for taking the high ground. It still has a latent credibility and contemporary values."
Yet while Orange has retained some of the brand values of its early days, it is also a significantly changed firm. This is inevitable given that it has been through six different ownership structures, including two flotations, in its eight-year lifespan. UK turnover of 2.9 bn euros for the six months to June 2002 shows it is far from a minnow.
In the City, the consensus is that Orange still has the strongest brand among the UK mobile networks. But some analysts think the biggest problem they face is a dearth of customer relationship management savvy.
"They don't seem to have the CRM systems," says Deutsche Bank telecoms analyst Andrew Beale. "They are only just getting to grips with what the value of a customer is and how you incentivise them."
The slowdown in subscriber growth necessitates a shift in focus from new business to generating more revenue per existing subscriber. Orange lags behind Vodafone here.
For the second quarter of this year, Orange announced that its average annual revenue per UK user had edged up 2% to £252. To drive further increases, it will have to introduce services with widespread appeal.
As well as alerting customers to new services, Orange needs to persuade those that do not use voice and text products to expand their repertoire.
Orange's own research shows that two-thirds of UK mobile phone subscribers never review their own mobile phone plan. Many consumers are confused and apathetic.
In September, Orange sought to address this issue with the launch of Your Plan (see panel), reminiscent of some of its early initiatives.
Orange is banking on services such as picture messaging being a hit with consumers who will then upgrade to the handsets required. It projects that by the end of 2005, 40% of its customers will be using devices with this capability.
If it is to achieve this aim, its marketing will have to be every bit as compelling as it was when the brand first arrived on the mobile scene.
Only then will the future assuredly be bright for Orange.
Dec 1999 Dec 2000 Dec 2001
(pounds m) (pounds m) (pounds m)
Turnover 4725.1 7606.9 9210.2
Gross profit 1931.8 10,986.7 5660.3
Operating income (69.1) 241.6 879.1
ORANGE'S PERFORMANCE IN THE UK MARKET
Average retail revenue per subscriber per quarter (pounds)
Vodafone Orange O2 T-Mobile
63.8 44.6 40.8 36.1
Estimated retail revenues per quarter (pounds m)
Vodafone Orange O2 T-Mobile
727 559 452 382
UK subscriber market percentage share of total subscribers (%)
Orange Vodafone O2 T-Mobile
27.4 25.4 23.9 23.2
Subscriber numbers by operator (millions)
Orange Vodafone O2 T-Mobile
12.8 11.8 11.1 10.8
Source: Oftel Market Information Mobile Update, July 2002. Figures
ORANGE GOES BACK TO BASICS WITH YOUR PLAN PACKAGE
In September, Orange launched Your Plan, an all-inclusive package designed to be flexible and to minimise consumer confusion.
Your Plan allows customers to build their own service plan, choosing from the following 'menu' of services: inclusive minutes of talk time per month that can be shared with friends or family; a discounted text messaging bundle; Photo Messaging; multi-media services such as news updates, games and sports; and extras such as Orange Care.
Unused messages can be rolled over to the following month.
And if a customer uses all the inclusive minutes and messages from a bundle before the month is over, all additional calls and texts are charged at the same flat rate.
To an extent, Orange is going back to basics with this package, making great play of transparency and consumer choice, just as it did when it entered the market eight years ago.
It is also seen as a way of stimulating demand for Photo Messaging and other data services by making sure consumers are not frightened away by the perception that these will prove expensive, with costs hidden away in contractual small print.
Photo Messaging and Picture Content, which Orange launched in August, are accompanied with the promise of per-message billing. Photo Messages will be charged at 40p to the sender.
Orange launched in April by Hutchison Whampoa, the fourth entrant into the UK mobile phone market. With a strong corporate identity created by Wolff Olins and memorable advertising by WCRS, Orange quickly carved a position for itself in a market that had hitherto been short on branding. Innovative products such as simple Talk Plans and 'per-second' billing capture the public's imagination.
Floated on the London and Nasdaq stock markets and becomes youngest company to enter the FTSE 100.
Passes one million UK customers milestone.
Begins international expansion with award of GSM licence in Switzerland.
Acquired by Mannesmann, the leading mobile operator in Germany.
Mannesmann itself is bought by Vodafone, but for the deal to be approved it must sell off Orange. France Telecom pays Vodafone £25.1bn for Orange.
Orange shares listed on the French stock market.
Adds 415,000 new UK customers in the first half of the year, taking its customer base to 12.8 million as at the end of June. In the second quarter of the year, average annual revenue per UK user edges up 2% to £252. Becomes number one mobile operator in France. Launches Photo Messaging and Picture Content services. Abandons Formula One sponsorship and appoints Mother to replace Lowe.