CANADA

Adapting to a new climate

Changes at an advertising agency illustrate the art of political survival

WARREN CARAGATA May 2 1994
CANADA

Adapting to a new climate

Changes at an advertising agency illustrate the art of political survival

WARREN CARAGATA May 2 1994

Adapting to a new climate

CANADA

Changes at an advertising agency illustrate the art of political survival

WARREN CARAGATA

Snowshoe hares do it. Ptarmigans do it. Even flounders do it. Changing color to match the landscape works in the natural world, and a Toronto advertising executive has shown that it seems to work in politics, too. In nature, where it offers protection from predators, it is known as cryptic coloration. In politics, where it has a similar purpose, it’s called hedging your bets, or just plain common sense.

But whatever it is called, it has worked well for Peter Simpson, the founder of Genesis Media Inc. In the past month, the federal government awarded Genesis a one-year extension of its multimillion-dollar contract to handle the lucrative business of placing federal government advertising, a job that the trade journal Marketing has called “the fattest sweetheart deal in adland.” It is the same work that Simpson did under the corporate name of Media Canada Inc. while the Conservatives were in power in Ottawa, when his partner was the late Roger Nan tel, a crony of former prime minister Brian Mulroney. Now, with the Tories out and the Liberals in, Simp-

son has a new corporate identity and a new partner: Vickers & Benson Advertising Ltd., a Toronto-based company with long-standing Liberal ties.

Ottawa’s decision to extend the contract without entertaining competitive bids and without fanfare is a further indication that the Liberals are having a hard time living up to their pre-election promise to bring honesty, integrity and open government back to federal politics. But it is not the only sign. Another was the recent appointment of several Liberal campaign workers to government posts, appointments that Reform MP Ed Harper said shows that the Liberals are reneging on their promises. “Nothing is changing,” he complained. The posting that drew the most fire was the appointment on April 15 of Jack Wiebe, 68, as lieutenant-governor of Saskatchewan, replacing Sylvia Fedoruk. Wiebe, a farmer who has been active in many agricultural organizations, ran the Liberal campaign in Saskatchewan in last fall’s federal election. Even Saskatchewan Liberal Leader Lynda Haverstock acknowledged that the appointment appeared to be a reward for political service.

Coming up with new mies to govern advertising and polling business has been difficult for the Liberals because of a combination of politics and turf wars. Insiders say that some new ministers, such as Justice Minister Allan Rock, have pushed for more openness and less patronage, while others, including Government Services Minister David Dingwall, contend that rewarding friends of the government is a natural and necessary part of the system. The fact that Genesis received only a one-year extension of its contract instead of a longer arrangement is a reflection of the difficulty the Liberals are having as they try to reconcile pre-election promises with political power. But both the company and the government defend the deal on the grounds that Genesis is good at what it does. “They have done it before, they have the experience, they have the knowledge,” said Dingwall. Added André Tessier, Dingwall’s spokesman: “They are probably the best agency of record around.” Tessier cited the company’s Tory past as a defence against any suggestion of patronage. “They were working for the previous government,” he said.

Genesis has had a brief, but so far profitable, life as Ottawa’s “agency of record.” As such, its main role is to buy advertising space and time for all government ad campaigns. The company was formed through a 1991 merger between Simpson’s Media Canada and the media-buying department of Vickers & Benson. The genesis of Genesis, its critics

say, came when Simpson saw the writing on the wall for the Conservative government and apparently sought Liberal connections as insurance against a Tory defeat. “It was a marriage of convenience for both companies,” said one industry insider. Simpson, who referred all comment to Genesis, has moved out of active management but remains a board member and a major shareholder in the company while heading a film production firm. Brian Pearman, executive vice-president at Genesis, said the company was formed because “it firstly made good sound business sense.” But Pearman acknowledges that the merger gave Media Canada a different political coloration. “The political persuasion isn’t something that was totally dismissed,” he told Maclean’s. Vickers & Benson president John Hayter says he made the first approach to Simpson, whom he has known for years. He and Pearman insisted that there were never any guarantees that Genesis would be able to keep the government advertising contract. “To form a venture on that alone,” Hayter said, “would be folly.”

Folly or not, Hayter makes no bones about the fact that senior executives at Vickers & Benson worked for Red Leaf, the Liberals’ inhouse election agency, in the 1993 election and in previous elections. “It so happens that many of the key executives in the company happen to be Liberals.” But, he said, the company itself is nonpartisan: “Any employee can work for any political party they so choose.”

While Hayter says that Genesis cannot survive on government business alone, Pearman said the federal contract accounts for a significant part of the company’s business. Figures released to Maclean’s under access to information rules show that the contract was worth $1.9 million in the first 10 months of the 19931994 fiscal year. In the two years before that, Genesis took in $6.1 million. Under the terms of the deal, Genesis receives a monthly fee based on how much advertising Ottawa does (an estimated $40 million for 1993-1994, making it one of the country’s largest advertisers), plus a bonus related to any savings it negotiates from standard advertising rates. Pearman says Genesis, and Media Canada before it, have saved the government $100 million over the past eight years. As well, Genesis receives a so-called windup fee, paid monthly, for sending on invoices to the government and making sure that ads have been properly placed.

It is not the first time that there has been a metamorphosis at the company holding the agency-of-record contract. In 1980, when the Liberals returned to power, ad agencies with Liberal ties set up a company called Canadian Media Corp. and were awarded the contract. The company’s president then was Ron Bremner, now an executive at Vickers & Benson. When Mulroney’s Tories won in 1984, Simpson and Nantel bought Canadian Media and turned it into Media Canada. So far, the switch has worked again. The tradition continues.

WARREN CARAGATA in Ottawa