2005: Year of the Big Move

NEW YORK Call it the year of the blockbuster. Billings flew by the hundreds of millions, and it wasn't just the media contests. The most massive creative shifts included Bank of America ($600 million), Volkswagen of America ($400 million), Visa ($335 million) and Unilever's Omo ($250 million globally). And the media reviews continued to be big ticket fights—as the steady drumbeat of consolidation continued—led by General Motors ($3.2 billion), L'Oreal ($1.5 billion globally), Cingular ($900 million) and Sanofi-Aventis ($800 million globally).Once again, the media pitches appeared to be driven largely by a desire to cut costs, be it in the wake of a merger (Cingular with AT&T Wireless) or amid a decline in market share (GM). All told, some $22 billion in creative and media billings went into play this year, up 10 percent from 2004's total of $20 billion and up a whopping 57 percent from 2003's tally of $14 billion, according to Adweek reports. "It was an average year on an absolute count basis," said New York search consultant Richard Roth. "However, the amount of dollars involved was significantly larger."Many of the moves were driven by market demands—GM comes to mind—and again, M&A activity (Sprint and Nextel, Verizon Communications and MCI, Procter & Gamble and Gillette, etc.). But several fit the classic scenario of changes on the client side, coupled with a perceived falloff in agency performance. And a long history with a given client didn't seem to matter much: Visa split with BBDO after 20 years, BMW with Fallon after 10 years, and VW with Arnold, also after 10 years.While new-business volume was staggering at times, the bottom line was positive. Clients, after years of cost-cutting, sought new ways to grow business, often beyond the confines of traditional advertising. "The pace has increased, and I think it's going to stay busy for quite some time," said Brian Martin, director of business development at JWT in New York. Added Deutsch's new business head Michael Duda, "There's more of a growth mentality, so the competitiveness to grow is fueling stuff."Automotive: +47.7%Following 2004, when a staggering 15 car accounts went into review, only one event could have raised the bar—and it did: GM's $3.2 billion U.S. media review. The sound of the second shoe dropping reverberated. VW followed Mitsubishi's pattern of shifting media first, then creative. A steady sales decline at VW also augured change. (Through November, sales had fallen 16 percent from the same period last year, according to Car Concepts.) Flux in the marketing ranks also factored into the shifts. Five months after joining VW, former Mini marketing chief Kerri Martin replaced Arnold with Crispin Porter + Bogusky. New BMW marketing boss Jack Pitney split with Fallon and hired GSD&M. Reviews in the Big 3, if not the demise of famous nameplates, may be next, said Car Concepts analyst Todd Turner.HighlightsIn May, GM's Betsy Lazar moves $3.2 billion buying from IPG's GM Mediaworks and LCI to Publicis' GM Planworks for better local broadcast and new media coordination.In January, VW says it's perfectly happy with Arnold. In March, then new director of brand innovation Kerri Martin comes from Mini; by September, the $400 million account shifts to her old agency, Crispin Porter + Bogusky. Financial: +33.6%Bank of America was the big mover, uprooting $600 million in marketing services dollars from 16 IPG shops and planting it at eight Omnicom agencies, chief among them BBDO. And although the shift was the product of a July-August review, sources said the seeds of the bank's decision to look elsewhere were planted during bumpy contract negotiations in the first quarter and IPG's falling out with account czar Bruce Nelson in June. Nelson was tight with client marketing chief Catherine Bessant, and his split with IPG was said to force BofA's hand. So, a year after IPG honored its BofA team at its annual meeting and three years after it beat Omnicom to win the business, IPG said goodbye to $65 million in revenue, creating an even bigger hole going into 2006.HighlightsIn November, Visa splits with BBDO after 20 years, shifting its $335 million account to TBWA\Chiat\Day after an all-Omnicom review that also included Goodby Silverstein & Partners.Washington Mutual reviews its $100 million account in October, splitting with four-year incumbent Sedgwick Road. The contest is now down to Publicis Seattle and Leo Burnett. Food & Beverage: +10.1%The world's best-known brand got restless again and shifted nearly $500 million in business. Roster shop Wieden + Kennedy was the big winner, landing both U.S. duties and a global task on the flagship brand, amid sales declines and after the arrival of new global marketing head Mary Minnick, who shifted from president/COO of Coke Asia. "The brand has huge power. Mary's a very talented marketer. She clearly had her own ideas about what marketing should look and feel like. That's what this is about," said John Sicher, editor and publisher of Beverage Digest. "Coke clearly needed a fresh approach to its advertising." Beverage Digest estimated that Classic's U.S. sales fell 5 percent through the first nine months of the year. Crispin Porter + Bogusky also benefitted from Coke's wanderlust, winning the launch of Coke Zero and becoming Sprite's third agency in four years, replacing Ogilvy & Mather. Berlin Cameron United was the big loser: its loss of U.S. Classic duties forced the shop to lay off 40, or about 40 percent of its staff. In the fall, food giants got busy on the media front. Kellogg began a review of its $500 million U.S. media buying account, and Danone reviewed $500 million in global media business on a market-by-market basis. Both contests continue.HighlightsIn October, Coke shifts its $200 million U.S. Classic account to Wieden + Kennedy, Portland. A few weeks later, Wieden Amsterdam wins a "global iconic" task worth about $170 million in billings.In September, Kellogg reviews its $500 million U.S. media buying account, pitting incumbent Starcom against MindShare. Carat enters the mix in December. Pharmaceutical: -19.2%The sector saw $2.9 billion worth of ad reviews in 2003-04, when people were still able to joke about side effects mentioned in ads. (Remember the four-hour erection warning from Cialis?) But this year, only $1.3 billion worth of pharma advertising was reviewed as more serious side effects of drugs came to light, and consumers complained before Congress and the FDA that DTC ads create "a culture of disease and fear." There also appeared to be fewer blockbuster drugs going to market. The biggest-selling drug in the industry, however, searched for a new agency. Pfizer's Lipitor, seeking a new strategic direction, reached outside incumbent Merkley + Partners to JWT, The Kaplan Thaler Group and mcgarrybowen. Merkley was cut in September, ending its five-year tenure on the brand. In April, the FDA admonished ED drug Levitra, a joint venture of Schering-Plough and GlaxoSmithKline, for ads suggesting it was "superior" to its competitors. Two months later, the client shifted its $90 million account from Saatchi & Saatchi Consumer Healthcare to BBDO.HighlightsPfizer's review of Lipitor begins in June and remains undecided. The incumbent, Merkley + Partners, is eliminated in September, leaving three contenders: JWT, The Kaplan Thaler Group and mcgarrybowen. Billings are estimated at $60-80 million.In December 2004, the FDA demands that AstraZeneca pull ads for its anti-cholesterol drug Crestor, calling its safety claims "misleading." The following month, Crestor shifts from WPP's CommonHealth to Saatchi & Saatchi Consumer Healthcare. Spending from January through September this year falls to $120 million, down from $130 in the same period last year, per Nielsen Monitor-Plus. Packaged Goods: -32.9%"Packaged goods may be down because of consolidation and retailers maxing out on product [differentiation]," said Chris Colbert, CMO of Boston consultancy Pile and Co. That said, personal care giants L'Oreal, Gillette and Unilever all had a busy year. The trio moved a combined $2.3 billion of the $3.5 billion in billings that shifted, and Publicis Groupe shops were the prime beneficiaries. Cost savings, not service, drove most of the moves. "Everybody's got the jones for consolidation," lamented George Hayes, director of client services at Universal McCann, which saw its half of L'Oreal's $1.5 billion global account shift to ZenithOptimedia. Gillette, which became part of Procter & Gamble in the fourth quarter, yanked its $800 million global account from MindShare, a Unilever shop, and redistributed the wealth among Starcom MediaVest (North America) and P&G roster shops SMG, ZenithOptimedia and MediaCom overseas. The big winner in Unilever's global Omo review was the smallest contender: BBH.HighlightsIn the $250 million Omo detergent review, Unilever asks Lowe, JWT and BBH to work from a single global strategy, as encapsulated in "Dirt is good." And, although the brand goes by different names in different markets, Lever, in its drive to act more like a global company, wants the ads to flow from one strategy. In October, BBH wins lead strategic and creative duties, while Lowe keeps Latin America, Asia, Africa and the Caribbean. JWT is shut out.In October, BBDO retains creative chores on its $600 million in Gillette business after the client is acquired by P&G. Telecommunication: +82.1%Competing telecom brands continued to collide like so many atoms via another wave of mergers and acquisitions, this time Sprint with Nextel and Cingular with AT&T Wireless. Both mergers began in 2004 and closed this year, triggering the inevitable reshuffling of agency assignments. In 2004, Cingular consolidated its creative duties at BBDO without a review. This year was all about the media. But instead of consolidating at a single shop, the client split buying between AT&T Wireless shop Mediaedge:cia (broadcast) and Cingular shop OMD (print). Sprint's acquisition of Nextel set the stage for a West Coast-East Coast shootout between Sprint lead shop Publicis & Hal Riney in San Francisco and Nextel's TBWA\Chiat\Day in New York. Going in, TBWA\C\D appeared to have an edge: Nextel marketing chief Mark Schweitzer had been designated CMO for SprintNextel. That said, the agency pulled out all the stops, even getting Lee Clow to act out one of the spots they pitched, which later became part of the launch campaign. (In the spot, an old man seated at a diner counter says of Sprint's network: "It's big, powerful. I'd leave it alone.") TBWA\C\D walked away with the top prizes: the launch and consumer duties. Publicis & Hal Riney hung on, though, picking up business-to-business duties.HighlightsIn March, Cingular makes a split decision on $925 million in media duties, handing broadcast buying to Mediaedge:cia and print buying to OMD.In June, SprintNextel awards launch, consumer duties to TBWA\Chiat\Day and B2B duties to Publicis & Hal Riney. Combined billings are estimated at $800 million.—Adweek staff report

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2005: Year of the Big Move

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