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IHOP Buys Applebee's

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CHICAGO IHop today said it has agreed to acquire Applebee's for about $1.9 billion. Applebee's on Friday awarded creative duties on its $180 million advertising account to IPG's McCann Erickson, which is also the lead agency on IHOP's estimated $75 million account.

"After an extensive agency review process, we are thrilled to have McCann Erickson on board to create fresh and compelling advertising that will take the Applebee's brand to a whole new level," said George Williams, the company's chief marketing officer, in a statement. "We believe the concept McCann presented to us fits perfectly with our brand strategy. it will break through the category clutter, drive traffic to our restaurants and entertain everyone who sees it."

McCann in New York beat Omnicom Group's TBWA\Chiat\Day in New York in a shootout for the business, according to sources. Both shops had presented strategies that revolved around a "younger, more energetic" positioning for the Overland Park, Kan., restaurant chain.

McCann's Los Angeles office handles IHOP, which spent $75 million on ads last year and $30 million through the first third of 2007, per Nielsen Monitor-Plus.

Although Applebee's spends about $180 million on advertising annually, sources said the revenue from the account was relatively small, around $3.5 million.

Media planning and buying duties, currently at Publicis Groupe's Starcom in Chicago, are not affected by the review.

The business had previously been at IPG's DraftFCB in Chicago. The incumbent opted not to defend the account. That agency devised the company's current tagline, "Eatin' good in the neighborhood."

The review came shortly after Williams joined the company as chief marketing officer in February.

This story updates and replaces an item posted on July 13 with the news that IHop has agreed to buy Applebee's.