United’s Options: Y&R’s Reach or Fallon’s Creative

United Airlines heard proposals late last week from Young & Rubicam and Fallon Worldwide on how each would manage the company’s $100 million global advertising account, sources said.

One executive close to the review said the airline’s choice is between global reach and creative firepower. “Y&R has a strong network,” the source said. “Fallon is great creative.”

The meetings were characterized as “discussions” about how the agencies would manage the global account, rather than straight pitches, sources said. Creative ideas will not be a factor in determining who gets control of the business. A decision is expected in early January.

“We’re looking for solid confirmation that they can handle a global piece of business,” said company representative Matthew Triaca.

Under that criteria, Minneapolis-based Fallon could be at a slight disadvantage when seen against New York-based Y&R. With only one functioning international office, Fallon will have to draw heavily upon parent Publicis Groupe SA’s resources.

“If [Fallon] didn’t have that connection, [United] wouldn’t be doing this for them,” said one source.

With increasing fuel and labor costs, the Elk Grove Village, Ill., carrier said financial reasons were the main factor behind the consolidation. One source estimated the airline could save $2-6 million.

However, insiders also pointed to a new marketing team’s desire to have one shop. John Kiker, who joined United as vp of advertising and communications last year, had been wanting to consolidate at one agency and was “looking for a reason,” sources said.

Kiker had met with BBDO and Organic officials over the summer at the shops’ request, as well as with McCann-Erickson—the agency for USAir, with whom United is in merger negotiations [Adweek, Aug. 7 and 28]. None of those shops are involved in the current pitch.

United spent about $120 million on its global advertising last year, according to sources. The company’s budget is expected to be “10-12 percent less” next year, sources said.