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S.C. Johnson's Decision Reflects Conflict Avoidance

Ad incumbent Draftfcb loses 2nd largest client

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By splitting the advertising portion of its massive global marketing services account between BBBO and Ogilvy & Mather, S.C. Johnson hedges its bets and insulates its business from potential conflicts.

Both agencies also work for SCJ competitors—BBDO has Procter & Gamble, and Ogilvy works with Unilever. As such, neither shop could assume all lines of SCJ's business, which spans home care, food storage, and pest control. BBDO, led by its Chicago office, will create ads for pest control and home storage products such as Raid and Ziploc, and Ogilvy will handle home fragrance and home cleaning brands like Glade and Windex.

Incumbent Draftfcb was the one contender that was conflict-free. So, the marketer's decision to leave the shop and shift $50-60 million in revenue to two rivals illustrates SCJ's determination to move on. Chicago-based consultancy R3:JLB managed the process.

Draftfcb had worked on the business for nearly 60 years and SCJ is its second-largest account by revenue after Beiersdorf. The loss will trigger layoffs and leave a gaping hole in a client roster that includes MillerCoors, Yum! Brands (Taco Bell, KFC), Kraft Foods, and Dow Chemical. 

From a holding company perspective, Draftfcb parent Interpublic Group is the big loser here, given that media incumbent Initiative and digital R/GA also came up empty. SCJ shifted its media business to a WPP Group team led by Maxus. Digital will be redistributed among several shops.

In a statement, IPG said it was disappointed by the outcome but added that the impact to the company's 2011 financial results "will not be material." That's because it will take several months to shift the business to the new agencies.

WPP's OgilvyAction retained its status as SCJ's lead agency for retail marketing. "This a company we have huge respect for and we look forward to working with them in the years to come," said Ogilvy CEO Miles Young.

In a brief statement, SCJ CEO Fisk Johnson said, "We employed a very rigorous process with very specific criteria and both [BBDO and Ogilvy] fit best with our specific future needs and opportunities."

Johnson described the split with Draftfcb as a "difficult decision," adding, "We truly value the many contributions the Draftfcb team has made to the success of our business over a long-standing partnership."

SCJ's review was a marathon that began nearly eight months ago, a few days before Christmas. Final presentations took place in late May and early June. Almost weekly since then, participating agencies have anticipated a decision. Well, the wait is finally over.