Little Caesars Initiates Review; Freeman Walks

Little Caesars’ decision to move forward with a national agency review for its $40 million ad account has prompted Cliff Freeman and Partners, the creator of some of the most decorated advertising in recent memory, to choose not to defend the business it has handled since 1986.
Three agencies–former Domino’s Pizza shop Grey Advertising, New York; Bozell Worldwide, Southfield, Mich.; and Fallon McElligott, Minneapolis–are contenders; a decision is expected by April, said client representative Sue Sherbow.
“We’ve had such enormous success but it was time to move on,” said Cliff Freeman, chairman and chief creative officer at the New York agency. Freeman said the decision to resign the account came after “serious soul-searching” and was especially difficult given his close relationship with Little Caesars’ owners, the Ilitch family, and the agency’s role in creating the brand. “They put us on the map and vice versa,” he said.
The review has been quietly under way since mid-January. It was disclosed to Little Caesars franchisees in a memo from vice chairwoman Denise Ilitch Lites, dated Feb. 4. The memo praised Cliff Freeman for doing “an exceptional job creating a vivid, memorable campaign for our company.” She added that the review was “a very healthy process that will allow us to take a fresh look at ideas and talent that exist in the marketplace.” At the time, Ilitch Lites wrote, the agency would continue handling the business and “they look forward to participating in the review.”
Freeman cited “a myriad of business challenges” in opting to resign, adding that the agency and client “differ greatly” on finding solutions to the problems.
The review coincides with the company’s search for a new marketing executive to develop a more consistent brand strategy and halt a two-year sales slide. The privately held company is also weighing a public offering within 18 months, said sources.
Little Caesars has slumped amid heavy competition in the $25 billion pizza market from larger rivals Pizza Hut and Domino’s Pizza.
Systemwide sales at Little Caesars have been stuck at roughly $1.8 billion for the past two years. Despite years of rib-tickling ads, Caesars’ value message may have faltered in flush economic times as consumers have opted for tastier offerings [Brandweek, Jan. 26].
Little Caesars’ owner, Mike Ilitch Sr., recently underwent a second round of heart surgery and may be ready to loosen his grip on his $1.8 billion pizza empire, said sources. Caesars recently hired a Midwest search firm to solicit candidates for a creative services post that would report to Ilitch Lites, who oversees marketing. Sources, however, said Ilitch Lites wants to leave the business, possibly to pursue a political career in Detroit, where the family is involved in several municipal projects.
Sherbow declined to comment on the candidate search and would not speculate about Ilitch Lites’ future plans. She said she was not aware of a public offering.
In addition, about 25 percent of the chain’s franchisees fell behind on payments to the national ad fund last year, leaving the company with an $8 million spending gap, said sources. Little Caesars spent $53 million on ads in 1996 and $35 million through November of last year, per Competitive Media Reporting.
–with Hank Kim