Lace, Lowe London’s CEO, Departs After Investigation
NEW YORK Suspended Lowe London CEO Garry Lace (below) is leaving the shop, three months after his superiors launched a probe into allegations that last year he met more than once with ex-chairman Frank Lowe to discuss the Tesco creative account then at Lowe. In March, when the shop suspended Lace, it said it would resolve “certain matters that have come to the company’s attention” by the end of that month. In a statement, Lowe parent IPG wrote that Lace had “resigned,” effective immediately. Deeming the matter “confidential,” the holding company declined further comment. On Dec. 5, four days after Frank Lowe said he was opening an agency in London, Tesco reassigned its account to the new shop, known as The Red Brick Road. The actual handoff took place in March.
IPG Suffers $182 Mil. Loss On $1.3 Bil. in 1Q Revenue
NEW YORK Interpublic Group has reported a $182.1 million net loss for the first quarter of 2006—compared to a $151.4 million loss in the same period last year—on flat revenue of $1.33 billion. During an earnings call last week, IPG CEO Michael Roth attributed the loss in part to the rising cost of professional fees ($90.7 million for the quarter, versus $75.1 million in the first three months of 2005) and salaries. Despite the flat overall quarterly revenue, organic revenue grew nearly 5 percent, due in part to increased spending by existing clients.
Maroun Succeeds Kelly As President of Arnold N.Y.
BOSTON Arnold has named Mary Maroun president and managing director of its New York office. She succeeds Fran Kelly, who in March was named CEO and president of the Havas-owned agency’s U.S. operations, succeeding Ed Eskandarian, who remains chairman. Maroun, 50, will partner with John Staffen, Arnold’s CCO and managing partner in New York. The move reunites the pair, who first worked together a decade ago at TBWA\ Chiat\Day, where Maroun rose to managing director of its New York office. Maroun arrives from Young & Rubicam in New York, where she was a North American managing partner.
VW, Intel Losses Affect Quarterly Results at Havas
BOSTON Havas has reported a 2.6 percent rise in first-quarter revenue to $420 million, compared to the first three months of 2005. At constant exchange rates, revenue fell about 2 percent; on a like-for-like, organic basis, it dipped nearly 2.5 percent, according to the Paris-based holding company. Havas attributed the sluggish performance in part to several key losses from 2005, including the exit of the North American Volkswagen business from its Arnold and MPG units, as well as the departure of the global Intel account from its MPG and Euro RSCG operations.
Richards Claims Creative Of 21st Century Insurance
LOS ANGELES Independent The Richards Group in Dallas has won creative chores on the $25 million 21st Century Insurance account following a review, sources said. The agency search began in early March and was conducted by Select Resources International of Santa Monica, Calif. The insurer’s lead agency, IPG’s Dailey & Associates in West Hollywood, Calif., worked with the client less than a year. Agency relationships with Woodland Hills, Calif.-based 21st Century have been short-lived, with president and CEO Bruce Marlow conducting informal reviews and testing work in the last two years, per sources. Dentsu’s DCA, Los Angeles, continues to handle media, which was not under review.
Euro RSCG 4D Files Lawsuit Against Ex-Chief Executive
NEW YORK Charlie Tarzian, who resigned last month as CEO of Euro RSCG 4D, is being sued by his former shop for allegedly trying to recruit current clients and agency employees to his new venture. The action was filed on May 9 in State Supreme Court here, and Euro RSCG 4D, a unit of Havas-owned Euro RSCG Worldwide, is seeking monetary damages as well as a judgment to prevent Tarzian from soliciting clients or staffers for one year. The complaint states Tarzian used Euro RSCG 4D confidential client information in his attempts to recruit agency accounts and employees to his new firm, Last Mile. The complaint alleges that Tarzian in June 2005 began soliciting Euro RSCG 4D client IBM to move business to Last Mile. The action comes four days after a lawsuit filed by Tarzian against Euro RSCG Holdings, in which he claims the agency cannot preclude him from offering the software used for clients at Euro RSCG 4D at his company.
Newspaper Circulations Fall As Online Numbers Rise
NEW YORK The spring FAS-FAX report from the Audit Bureau of Circulations shows that paid newspaper circulation is on a troubling decline. It was hoped that the six-month period ending March 2006 would prove that the industry plugged the dam, but the Newspaper Association of America’s semi-annual circ analysis said that daily circulation fell 2.5 percent—one of the industry’s largest recorded drops. The result was the same for the six-month period ending September 2005, during which daily circulation dropped 2.6 percent. While paid-circulation numbers have been sinking, the NAA did release some good news: More people are flocking to newspaper Web sites. Thirty-seven percent of all online users during the first quarter visited a newspaper Web site, an 8 percent increase from the same period a year ago.
Initiative Forms Unit To Serve CBS, Showtime
Initiative said it has launched a dedicated entertainment department to handle the national CBS and Showtime businesses. The move comes six weeks after IPG’s Initiative won the estimated $130 million account, besting Aegis’ Carat, the incumbent, and Omnicom’s OMD. The unit, set up to focus on the strategic positioning of the CBS and Showtime brands, will be overseen by Alan Cohen, evp and managing director of innovations and entertainment, who will manage the group based in Los Angeles. In addition to Cohen, John Nuzzi and Greg Castronuovo will serve as bi-coastal senior vice presidents and group account directors in Los Angeles and New York, respectively.
TBWA\C\D Adds Sara Lee Delicatessen, Bakery Brands
LOS ANGELES TBWA\Chiat\Day has won the creative account for Sara Lee’s deli and bakery brands, the company has confirmed. The client spent $35 million last year in paid media on those brands, per Nielsen Monitor-Plus. The Omnicom agency in Playa del Rey, Calif., already a Sara Lee roster shop, beat Omnicom sibling Element 79 of Chicago in the final round of a review. Publicis in New York, the incumbent, withdrew from contention [Adweek Online, April 18]. The Publicis agency’s departure came one day before it was to make a final presentation for the Hillshire Farm portion of the account. Publicis was the incumbent on the Sara Lee deli and bakery account and had already made a presentation on that business, as had Element 79 (the Hillshire incumbent) and TBWA\C\D. The client called the review in January to consolidate both assignments at a single agency, according to sources. The business has combined billings of about $60 million, per Nielsen. Sara Lee last year spent more than $25 million advertising its Hillshire brand.
Lace, Lowe London’s CEO, Departs After Investigation