After a tempestuous spell leading the Scottish arm of Bob Geldof’s marketing business, Vic has returned to his roots setting up the Covey Agency. Iain Mercer finds out that it is very much a family affair.
In the final year of my university degree I secured a week’s placement at Osprey Scotland plc, a well-regarded marketing and advertising agency in Edinburgh. The opportunity arose through a connection with my late father, Wallace Mercer, who regularly used the company for a number of his marketing initiatives in property and football. While I didn’t see my career being in marketing - I was studying business and went straight into journalism - the opportunity to work in a fast-paced work environment was not one to be turned down.
My short spell there got off to a bad start. As students often do, I managed to sleep in on the first morning. I then repeated the embarrassing feat the following day. Suffice to say my timekeeping has drastically improved since then - a period reading early news bulletins sorted out that particular faultline. But the person I remember standing inside Osprey’s blue-framed atrium each morning to greet that bedraggled wreck, was Vic Covey. He is a man who by that time had survived a heart attack in his mid-thirties, built up an advertising business ranked in the UK’s top 100 before selling to a listed plc.
But what this colourful entrepreneur is less well known for is his motor racing talents. The high-octane sport of screaming engines and scorched rubber provided Vic with a welcome escape to the pressures of running a UK-wide business.
“I started racing in Scotland in 1975 and raced through until 1982 with quite a bit of success,” he says, sitting in the MacDonald Hotel at Holyrood. “I won the Formula Ford 1600 Scottish Sports Car Club Championship at Knockhill in ‘81 and ‘82 and then in 1983 I was very fortunate to be working with the Japanese outfit, Canon. They were very keen to raise their brand profile and saw motorsport in the UK as part of it. I drove for them in England and in Europe over a period and actually got paid for doing it,” he recalls.
Vic senior’s racing career peaked in 1986 at the world famous Spa Francorchamps circuit in Belgium where he won a round of the Euro Metro series. No stranger to track chicanery at that time his life would encounter its most challenging turn in 1989 when he suffered a heart attack aged only 36. That, he says, was ‘game over’ as far as the racing career was concerned. But his relationship with the sport has endured and remained entwined with his business career ever since.
“I stayed quite distant from the sport for a long time until in 2003 I was asked if I could help run the commercial aspects of the Scottish Mini Cooper Cup which was just launching. I did and ended up becoming the series coordinator and ran it hugely successfully for nine years.
“At the same time my son, Vic Junior, had reached an age whereby he was really keen on it and he began his race career in the Scottish Mini Cooper Cup at Knockhill. He was actually considerably better and quicker that I ever was and he won the championship in 2008!”
Battle hardened from his experiences both on and off the track Vic’s latest business venture, The Covey Agency, has managed to post year-on-year profits since it opened in 2010. Quite an achievement when you consider how the recession hit Scotland’s creative industries. High profile collapses, such as the highly regarded Navy Blue in 2011, is an example of where a company has fatally suffered from a reduction in marketing spend by the wider business community, especially among the financial services firms.
“We’ve seen our pure advertising revenues collapse over the last five years,” explains Vic. “As I sit today, while we do an element of advertising, it’s by no means the core of our business. It’s now project-driven in terms of marketing projects. We’ve had to adapt our business to effectively become a jack-of-all-trades. And we’re happy to work with clients on individual niche parts of the marketing mix, or the whole thing.
He has witnessed a massive change in the last 40 years. “There is obviously advertising activity in Scotland, but as far as a full service advertising agency model is concerned, that’s dead. There is no advertising industry in Scotland,” he says.
One of the biggest barometers of the state of the media industry in Scotland can be seen across the street from our meeting. The Scotsman building is undergoing a major refurbishment after its owner, Johnston Press, downsized and relocated to premises 60% smaller elsewhere in Edinburgh.
Ironically it was at The Scotsman where Vic cut his teeth in the advertising world; first as a calligrapher and then as a key account advertising sales executive. It was also where he got his first big break leading to the formation of Covey Advertising.
“The account that launched my career was the Royal Highland Show, which if I go back to 1973, I handled personally from home,” recalls Vic. “I had actually been for a couple of interviews with ad agencies, but didn’t get anywhere. Actually, I wasn’t too impressed with some of the people I had met and thought: I can do this myself. I had the Highland Show account to kick-start the business, which is exactly what we did in June 1975.”
“In those days there was no such thing as media independency, so in pure advertising terms you were buying media space and getting a commission; that’s effectively gone. And there were bigger clients who were more Scotland-centric. By the late 1980s we had 90-staff with offices in Glasgow, Aberdeen, Edinburgh and Southampton. You just couldn’t sustain that today, nobody can. There are no advertising agency networks anymore.“
At its peak in 1989, Covey Advertising was turning over in excess of £6m and was one of Scotland’s top six agencies. It specialised, perhaps unsurprisingly, in the motor industry looking after well known companies such as Arnold Clark. But Covey also capitalised on the housing boom during the early 1980s. One account which made a significant contribution to his early success was CALA Homes, which the agency held for 21 years starting in 1980.
“Apart from being very good at it, we worked really hard on client service, the creativity we brought to the table was outstanding and it helped build a fabulous brand,” says Vic.
“But there is no loyalty and nothing is forever. 21-years was way beyond what most agencies hold accounts for. It’s not totally unusual, but it’s certainly not the norm. Ultimately CALA went because people change and the biggest influencer in our business is not necessarily how good or bad a job you’re doing, it’s the people. If key people change that can be the catalyst for change.”
Their client book and presence in Scotland’s capital was what piqued the attentions of the London-based Osprey plc, who bought the business in 1997. A new headquarters was built in Edinburgh’s Causewayside area ‘arguably at the wrong time’. Thereafter, adds Vic, the rot quickly set in.
“We entered into a three-year earn-out deal with Osprey. At the time it was very sexy for all parties. It turned out not to be quite that when we got to the end of the third year. Despite hitting all the targets and being due quite a considerable sum of money, the cupboard was bare.”
Osprey was eventually sold for £1 to Bob Geldof’s Ten Alps Media Group in 2001. The early days of his relationship with the former ‘Boom Town Rats’ front man were successful and the Leith-based arm of the Ten Alps operation regularly contributed net pre-tax profits of over £1m. Despite the considerable endeavours of a ten-strong team, relations soured.
“The conversations were all about cost-cutting and money and not about investment, vision and the quality of work we were producing. Through 2008 to 2010, when I departed, it became close to intolerable and certainly not pleasurable. ”
Vic was sufficiently disgruntled that he wrote Ten Alps a cheque to facilitate his exit. It lifted a restrictive covenant clause which would allow him to resuscitate the Covey brand and bring it back life through its latest incarnation: The Covey Agency.
“I was very fortunate that my creative director Euan Carmichael, who I knew from my days at Covey Advertising, Osprey and Ten Alps, was up for the challenge and joined me. He is part of the family and treated as such. Vic Junior is working in the business and my daughter Victoria helps with the accounts so, yes, it is a small family business.”
As a result of returning to the spirit of Covey Advertising and providing a personal, hands-on approach The Covey Agency has developed an impressive roster of clients. Finland’s Suominen, a global player in non-woven wipes, sits alongside a cluster of house builders such as Stewart Milne and Lundin Homes.
Servicing clients in motor sport remains a favoured niche, but the ‘horrific’ cost of actually competing in the sport has brought a premature end to Vic Junior’s involvement in this year’s Ginetta GT5 Challenge. To give an idea of the level of expenditure required, Vic says the budget for being part of a three-car team in the UK Renault Clio Cup during 2012 was ‘well in excess of £300,000’.
Shortly after this interview concluded Vic was off on a road trip to the Isle of Arran for a few days break. In a business context he tells me that he often drives to meet people wherever they are in the UK. If someone calls a meeting in Watford, for example, he jumps in the car and is there.
I get the impression he’s just that sort of guy; fully committed and determined to add value and go the extra mile for his clients and their businesses.
Vic's view on social media
'Social media has become one of the most dynamic techniques for businesses to communicate with current and potential customers. There are now a number of compelling case histories showing the power and effect that social media can have.
I recently attended a Clydesdale Bank business event, where the chairman of Albion Rovers, John Devlin, shared the result of his season ticket social media campaign: ‘Pay What You Can’. It was a unique offer which attracted increased press and TV coverage and a reported 500% increase in season ticket sales.
In making social media work, however, it does require the discipline of constant review and effort. It simply does not work if a client opens a Twitter and Facebook account and assumes everything will happen as a result. Clients need to have a clear vision as to what communications are relevant and what they can expect to achieve. Results can be stunning if it is a well-executed campaign. If it’s done badly, however, the results can be dangerous and catastrophic.'