Shops Rebound After Losses

NEW YORK Arnold won't hand off its $400 million Volkswagen North America account to Crispin Porter + Bogusky for several weeks, but top executives there are already developing a strategy for marketing its 10 years of car experience to other automakers. Through direct appeals, white papers, mailings and a new Web site dedicated to showcasing its VW work, Havas' Arnold hopes to fill its auto-category void—and quickly. The pitch may not be easy, considering a falloff in sales at VW in recent years. But observers believe Arnold will generate interest because the shift to MDC Partners' CP+B also came about due to that agency's past relationship with VW marketing chief Kerri Martin, who worked with the Miami shop on BMW's Mini Cooper. "It is always difficult to lose a great client, a client who helped build the agency," acknowledged Arnold worldwide CEO Ed Eskandarian. "But I think we have a great case [history], and we still have many of the talents who made that happen."While all agencies market their experience in particular categories, some have managed to replace the lost revenue in just a few months. Naturally, it helps if the incumbent wasn't dismissed because of work deemed ineffective or poor client service. If the shift in business is due simply to cost-cutting, an account consolidation or management turnover at the client, those events usually are not held against the losing incumbent, new-business executives and search consultants say. Also, a successful turnaround requires hitting the pavement the minute after the ex-client signals its intent to walk. "The second you know that you're going to lose an account, you start to think about how you can replace it," said Matt Weiss, U.S. chief growth officer at McCann Worldgroup. "At the same time, you don't want to seem like the cheap whore down the street."Recent examples of agencies hustling to fill category holes include Interpublic Group's Deutsch, which lost Mitsubishi in March and won a chunk of sponsorship marketing duties on Chevrolet in October; WPP Group's Ogilvy & Mather, which lost American Express Financial Advisors in May and replaced it with Morgan Stanley just five months later; Omnicom Group's Martin/Williams, which filled its L.L. Bean hole with The Coleman Co. in September, two months after the former went into review; and independent Eisner Communications, which replaced US Airways with Spirit Airlines this month, also in just two months.Regardless of the circumstances of an agency-client split, direct experience in a given field remains appealing to prospective clients, particularly in fast-moving categories like telecommunications or automotive, said consultants. "It has value," said Richard Roth of New York consultancy Roth Associates. "Clients say it's not necessary, but it has a value. And when we get into actual meetings, the value does increase because they're talking about a subject that they both have a knowledge [of] and interest in."The appeal of such experience diminishes over time, however. "When it's a couple of years old, it loses its cachet because clients wonder if the people that worked on that business are still at the agency," said Hasan Ramusevic of Hasan + Co. in Raleigh, N.C. "If you're going to replace business in the same category, the strike zone is within the first year of losing that business."While there's no solace in losing marquee clients such as VW or British Airways—as M&C Saatchi did last month, after a review—the ex-agencies can make cases that they produced a slew of memorable ads for both. After M&C's $100 million BA loss, the agency placed newspaper ads touting its availability in the category and created a new link on its Web site that highlights past work.Some clients may blanch at working with an agency that was fired by a competitor, particularly if the shop was perceived to have failed. A lot of clients don't want somebody else's leftovers, said a new-business chief at a New York shop. "[They] feel they'll look stupid by hiring an agency that got fired." Still, many prospective clients are willing to give a fired shop the benefit of the doubt, especially if its knowledge of a competitor can give them an edge. "People get fired for a lot of different reasons, a lot of which doesn't have anything to do with business sense," said Rob Moorman, chief marketing officer at Publicis Groupe's Saatchi & Saatchi in New York. Added Ramusevic: "Clients like prior category experience no matter the reason for a loss, especially when that experience is fresh." Besides serving as the ultimate comeuppance to a former client, parlaying a bitter loss into a win also can be a tremendous morale boost. "Nothing made us happier, when BellSouth did what it did, [than] to be able to say, 'We're back in the telecommunications business,'" said Alex Gellert, CEO of Merkley + Partners, which was fired by BellSouth in December 2001, only to be hired by SBC Communications five months later. That said, after February's loss of SBC, the Omnicom shop now finds itself right back where it was three years ago: experienced but open in the telecom category.

Brand Marketing

Shops Rebound After Losses

Andrew McMains

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Andrew McMains