As the American Legacy Foundation continues to audit its media operations, Havas is shifting that portion of the account to its dedicated media group in order to put more talent and resources behind planning and buying.
The switch from media incumbent Arnold MPG comes as the anti-smoking organization prepares to ask broadcasters for free air time, in addition to a paid media buy, when most funding from Big Tobacco is cut next spring.
Last month, Legacy began an internal media audit. Chris Cullen, Leg acy evp of marketing and communications, has reached out to about a dozen media experts, including Carat and Initiative Media. Based on the audit's finding in the next four to six weeks, Cullen will decide whether to launch a review, reassign the account to a nonroster shop or keep the business at MPG, he said. (The account's creative portion, shared by Havas' Arnold in Boston and Crispin Porter + Bogusky in Miami, will be reviewed via consultancy Pile & Co. in the first quarter, as per mandatory guidelines.)
The foundation has begun to float the idea of asking broadcasters for two free spots for every 10 paid media spots, Cullen said. "This is a begging thing—we are saving lives here," he said.
The four largest broadcast networks either declined comment or did not return calls by press time.
Legacy's last major payout under the Master Settlement Agreement with tobacco companies comes in April. While the group said it has reserved $584 million to continue the "Truth" campaign, it will become increasingly frugal in order to make the funds last for several more years.
The creative and media shops on the account have had to "dramatically" cut fees, said Arnold president Fran Kelly. Sources estimated the agency-fee reduction at 15-20 percent, with negotiations continuing at press time. On an account of this size, media experts estimated the average agency fee is between 5-10 percent of the ad budget.
Legacy spent $70 million on ads this year through August, according to CMR. Annual ad spending, however, could drop by as much as 20 percent, Cullen said.
Media experts predicted that free air time for Legacy will be a tough sell. The foundation will have a hard time persuading broadcasters to treat it as a charity, said Rich Hamilton, CEO of Zenith Optimedia Group in New York. Hamilton worked on the White House Office of National Drug Control Policy's campaign with Bates and helped develop the notion of mixing paid and donated media.
"The media owners have been accustomed to doing business for cash with this client, so they would be asking them to give money away," Ham ilton said.
Of Cullen's free time proposal, MPG USA COO John Gaffney said, "It is something we will deliver." Gaffney said preliminary negotiations with broadcasters to mix free and paid time have begun, but no commitments have been made.
Sources said Legacy's strategy could work if broadcasters decide to donate the free time in order to secure the remaining paid spots.