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United Faces 2 Clear Options

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United Airlines heard proposals late last week from Young & Rubicam and Fallon Worldwide on how each would manage the company's $100 million global advertising account.

One executive close to the review said the airline's choice is between global reach and creative firepower. "Y&R has a strong network," the source said. "Fallon is great creative."

The meetings were characterized as "discussions" about how the agencies would manage the global account, rather than straight pitches, sources said. Creative ideas will not be a factor for determining who gets control of the business. A decision is expected in early January.

"We're looking for solid confirmation that they can handle a global piece of business," said company representative Matthew Triaca.

Under that criteria, Fallon could be at a slight disadvantage. With only one functioning international office, the agency will have to draw heavily upon the resources of parent Publicis Groupe SA, perhaps the sole reason it's still in the review.

"If they didn't have that connection, [United] wouldn't be doing this for them," said one source.

With increasing fuel and labor costs, the Elk Grove Village, Ill., carrier said financial concerns were the main force behind the consolidation. One source estimated the airline could save $2-6 million.

However, insiders also pointed to a new marketing team's desire to have one agency. John Kiker, who joined United as vice president of advertising and communications last year, had been wanting to consolidate at one agency and was "looking for a reason," sources said.

Kiker had met with executives from BBDO and Organic over the summer at the agencies' request, as well as with McCann-Erickson—agency for USAir, with whom United is in merger negotiations. None of those agencies are involved in the current pitch, however.

United spent about $120 million on its global advertising last year, according to sources. The company's budget is expected to be "10-12 percent less" next year, sources said.