Nando’s: we could not afford agency fees
Nando’s, which parted ways with its agency of eight years a month ago, did so because the company could not afford the agency’s fee, the fast food chain’s marketing head has said.
Kim Russell, Nando’s national marketing manager, said that the company would not be appointing a new agency and would be investing the funds in other areas.
“Nando’s does not have a big marketing budget. We just didn’t have the funds to pay a big retainer,” she said.
After splitting with The Sphere Agency, the company hired inhouse graphic designers, and plans to award advertising work on a project basis.
tight arses
If they can’t afford agency fees they can’t afford anything. You wouldn’t want to be eating there if they are broke
Groucho, that is one of the most ridiculous things I have ever read. I take my hat off to Nando’s for saying no to the inflated fees that creative agencies try to get away with charging, for generic sub-standard work that any uni-student with a bong in his hands could come up with. And this current work is far better than any I have seen come from Nando’s in recent times.
Perhaps the agency needed to be cleverer about how the client was serviced? Perhaps traditional advertising solutions aren’t right for this brand? Perhaps their process needs to be reviewed to see if they are demanding too much support and management? Maybe this is not really about ‘can’t afford’ but ‘can’t justify’ which are two different things.
We don’t know the full details so making accusations and name calling is inappropriate.
For $3M they can certainly do something of value – this is a good opportunity for a clever agency to make an impact rather than spend our time bagging the client.
How could a 300+ chain not afford agency fees and only 3 million dollars??
Something smelly going on
Good one goodone! Anne Miles also has the right idea.
I would prefer to eat in a place where the money is spent on great products and customer service than big advertising budgets..
In my opinion, the big agency retainer model doesn’t work for all businesses (if any really..) I have in-house resources now and I have not looked back.. Increased ROI and a nice mix of people with different skills working in our team. As a marketing leader you always need to make the best calls for your own business environment not what everyone else is doing.
Well done Kim.
Don’t be a moron Goodone, the client gets the work they approve. The quality and the fees are two separate issues and if you continue your idiotic line of arguement there would be no agencies.Put your hat back on, maybe your brain will stay working.
Kim Russell says we’re not about to hold a Pitch by any stretch??? but right now we are trying to drive sales in the most cost effective manner, in other words ‘i’m stuffed, i got no money, i got no sales’! What a joke! You clearly have no idea what you are doing! Nando’s used to be everywhere a year ago. What ever happened to that campaign they were running, the portugasm. That was pretty cool.
Fail, fail fail
Nando’s, Subaru…. who will be next to make a stand……
@Karina:
You said… “I would prefer to eat in a place where the money is spent on great products and customer service than big advertising budgets.”
Now there’s some really sound strategic thinking! Tell us how the hell you’d find out the place existed?
What a joke – have you seen the food prices at Nando’s lately? No marketing budget my ass.
Seen this many times, agencies charging for “crazy things” like project management, creative directors and concepting time. All you need is a junior in-house designer and you’re set!
In all serious though, usually these plans are put in place by a marketing manager who wants to look good infront of the boss, saving “millions” – meanwhile all brand consistency and creativity goes out the window, puts things back years and 12 months later a new agency will be hired to try and clean up the mess.
I think the difference between Nando’s and Subaru as brands is rather cosmic.
I can understand Nando’s position.
I can’t understand Subaru’s.
Agree 100% gavin
Groucho – I think you’re right, I did go off on a bit of a random rant there didn’t I…
Gavin’s nailed it, in my opinion.
IF ONLY agencies charged transparently for sensible services like project mgt. We all know that they take a look at the media budget, apply the percentage of spend they feel they deserve for supplying their genius, then reverse engineer a fee structure
Is the marketing manager actually the girl in the ad??
Uncanny resembelance
300 store no agency budget. This does not sound like a viable business.
Mmm a business with probably three hundred restaurant outlets around the country and a $3 million adspend can’t afford an agency smells of internal business troubles! Whats going on? Top of that leave agency and then produce stuff like that not nice!
When you’ve spent 8 years with an agency who cannot build a gif banner to save its life, I understand why they would want to go solo.
At least the website was built decently. Have you seen their other websites? They’re all like 8 years old at least!
Come on nandos what’s really happening this sounds like something’s not right inside the business. The brands been it’s most consistent over the last few years and if it come to project work well the first effort is under cooked, not so hot.
Project management is a vicious circle. Clients won’t accept how long it takes to do things. So agencies add to the cost of the project manager because they can’t get all the hours paid. Clients who do this don’t really understand the costs. The difference between the cost of an agency and doing it in-house is the margin. Say it’s 20 – 30% you’ll have a hard time convincing me there is a cost saving. Agencies are driven to get things finished. everyone who moves from and agency to a client is always amazed how long it takes to do things at the client. I bet it’s more than 30%
300 franchised outlets and $3 million = $10,000 per store per year = economically tight.
Agency / client transparency is a much wider issue that Darren Woolley covers.
John are you the idiot behind this piece of shit of a campaign. No amount of gif building in the world can save this campaign. Is that what defines a good idea from a bad one these days?
@Anonymous – your social skills are appalling. This is technically verbal abuse and an excuse to make yourself feel more important. It’s time to grow up. I’m not afraid to put my name to this either.
Seriously……. great work Sphere (i can’t believe you guys did all that with a budget of 3 million dollars……..)
I thought nandos was family restaurant ! i take my 5 and 3 yo kids there, the sleazy campaign is not only badly done but cheap all around. its kind of pathetic.
I’ve read all the comments in here and it seems like on the most part the hater’s have a distinct lack of understanding of management within this business model. If money was splashed around I’m sure they’d love to spend big bucks on retainers and have a roster of high quality agencies… However when there is a single pot of money passed down to a marketing team there needs to be a focus of funds and in this case a call has been made.
It may be that BTL or in-store tactics works more effectively and gets better return on sales. There’s plenty of businesses out there that are highly succesful without spending on huge ATL campaigns where production and agency fees take a big chunk of getting the campaign to the people.
Yes, Nando’s has had some great work over the past few years but if the pressure coming down the line is to spend money in a different way then Kim’s made a big call and I’d dare say the correct call… Only time and the P&L sheet at Nando’s will be able to prove/disprove that though.
I saw these guys in the fast 100 with a turnover of 280 million in Australia….. why do they only have 3 million budget??
Guys the question is not IF they could afford them, it’s if they VALUED them. When was the last time us Sydney folk forgot to pay our water bill, or any other essential? You find money for what is important and Nando’s have made a decision that this spend wasn’t. It’s neither good nor bad, it’s a business decision and the results will speak for themselves.
Turnover doesn’t determine everything. Profitability is key, retail can have some prett lean profit due to the costs associated with staff, rent & on top of that they’ve got all the other costs involved with selling goods. If their marketing expenses come out of the bottom line then $3m might be the magic number.
Heads need to roll…..
How interesting are all these comments and especially from the people that wont put there name to their opinion. Well I’m the one that produced this video and the shots, it was a GREAT team effort. It was a great end result, the hits on the website, and the tv time that it has received is all positive.