"This one's a headscratcher," is how Deutsch CEO Donny Deutsch characterized last week's Ikea news in an internal memo to agency staffers.
After 11 years during which Deutsch es-tablished Ikea as the destination brand for hip yet functional furniture in the U.S. and Canada, the client put its estimated $40-50 million account in review.
Sources said the re-view came just weeks after the agency requested a "significant increase" in compensation.
Joakim Gip, Ikea's external communications manager, who is running the review, denied money was an is-sue. "It's not that we've been unhappy … but after 11 years you get stuck in a certain way of working. We want to reach further. A review is a good way to see how to do that. Deutsch decided not to be a part of [a review]."
In Deutsch's memo, he informed the staff that the client "could not come up with a definitive reason for wanting to 'look outside the fence,' other than 'it's time.' " Last week, Deutsch added: "We look back on our time with them fondly."
Last Monday, the same day the client told Deutsch about the review, consultancy Pile and Co. in Boston began issuing questionnaires, which are due back on Nov. 1, sources said.
According to the RFP, Ikea is looking for an agency in the same time zone as its U.S. headquarters in Plymouth Meeting, Pa. The account should be among the winning agency's top three in terms of size, but not its biggest. That requirement could be telling, considering that Deutsch was a $70 million shop with 50 employees when Ikea parked its $5 million account there. It now claims $1.5 billion and 800 employees.
Ikea, whose sales were up 15 percent from 1998-99, will make a cut by Nov. 3, hold credentials meetings Nov. 16 and 17, brief finalists on Nov. 21, and hold final presentations on Dec. 20, a source said.
Ikea's decision took the agency by surprise and struck an emotional chord. The staff memo ended with a reference to the brand logo's colors: "To all of you that have bled a little blue and yellow, I salute you from the bottom of my heart. Ikea is no longer deserving of you."