Circuit City, Toys R Us seek to reverse flagging business fortunes
The five agencies in the semifinals of Circuit City's $150 million broadcast creative review not only have a new client to consider, they may also soon face new contenders for the struggling consumer-electronics retailer's account.
Meanwhile, the seven shops invited last week to submit credentials in Toys R Us' $120 million creative review will be asked to set a new direction for the ailing toy marketer.
Circuit City last week named Ernie Speranza, who served as international chief marketing officer at Toys R Us until six months ago, as its first CMO. Speranza, who joins Circuit City on April 19, said "the last thing I want to do is disrupt a process that is already under way," but he acknowledged that he will be taking part in meetings with the semifinalists this week and next. He did not rule out the possibility that other agencies could be added to the review.
Contending for Circuit City are independents The Richards Group in Dallas and Doner in Southfield, Mich.; Interpublic Group's McCann Erickson in New York and The Martin Agency in Richmond, Va.; and Grey Global Group's Grey in New York. They are charged with coming up with ideas to spice up the Richmond-based chain's image and in-store experience to attract a younger consumer who is being siphoned away by Best Buy, according to sources.
The incumbent, IPG's Foote Cone & Belding in Chicago, won the account in March 2001 and is being evaluated separately from the other contenders. Search consultancy Hasan + Co. in Raleigh, N.C., is running the process. FCB's evaluation is being conducted by client executives including CEO Alan McCollough, who called the review, vp of marketing Justin Lewis and evp of merchandising Kim McGuire.
Speranza, who reports to McCollough and is now the most senior marketing executive at the consumer-electronics company, said one reason he was hired was to make branding "the touch point of every medium of communication."
He declined to comment further on the Circuit City review or on that of his former company, Toys R Us, which he joined as CMO in 1990. During his tenure there, Speranza worked closely with Linda Kaplan Thaler, who co-wrote the jingle that begins, "I don't want to grow up, I'm a Toys R Us kid."
Kaplan Thaler was a creative at J. Walter Thompson in New York at the time, and when she left for Wells Rich Greene in 1994, Speranza moved the account there. Toys R Us followed her again soon after she opened The Kaplan Thaler Group in 1997.
The account moved to Leo Burnett in 1999, as the client needed a larger agency and Kaplan Thaler was still a fledgling independent. It is now much larger and owned by Publicis Groupe.
Sources expect the New York agency to join the Circuit City review. It received an RFP but did not make it to the second round. Kaplan Thaler, the agency's CEO, said she has not been contacted by Speranza, nor has she reached out to him.
She did describe Speranza as "a mensch" who "respects agencies and respects creatives. Any agency that works with him is lucky to have him as a client. He's a true partner and a true collaborator."
With the current list or with new players added, the Circuit City review is expected to move to a finalist phase by the middle of the month, with a decision due in late April or early May.
The Toys R Us review is not likely to have any surprise guests. CMO Warren Kornblum hand-picked seven shops besides the incumbent to receive one-page RFIs, which were due back last Friday, according to sources. The document asks for general information such as ownership, size, current clients and dates of acquisition, potential conflicts and affiliated services in buying, ethnic capabilities, promotions, direct marketing and PR.
Among those invited are FCB, IPG's Deutsch in New York, Omnicom Group's DDB, MDC Partners' Crispin Porter + Bogusky in Miami, and WPP Group's Berlin Cameron/Red Cell and Young & Rubicam, both New York. Publicis' Burnett, the five-year incumbent, will get a pass into the fast-moving review's final round of four. The other three will be chosen this week, sources said.
Kornblum would not comment on the agencies invited. The RFI said only that the retailer is looking for "marketing and advertising strategy." But Kornblum indicated the brief calls for the winning shop to be a change agent for the Wayne, N.J.-based client. "It's got to be about the store experience and authority," he said. "We've been playing defense for too long."
"The only thing to drive [customers to Toys R Us stores] is if there's a less popular gift" not carried by other mass retailers, said Donald Trott, a specialty retail analyst at Jeffries & Co. in New York. He noted that Burnett's giraffe-centric Geoffrey commercials "got all kinds of awards. If you indeed have an award-winning ad campaign, what are you going to do differently? ... We're not sure what the solution is, quite frankly."