The exit of Agency.com CEO Don Scales on Feb. 8 was officially tied to "strategic differences"—a euphemism that may not be far from the truth, given what sources say was Scales' resistance to an Omnicom alignment strategy.
Insiders say Scales was slow to implement a plan set forth last March by Omnicom CEO John Wren to align its nontraditional agencies and CRM capabilities with its worldwide agency networks, and that he didn't have the support of his top staffers.
Wren's plan, put into motion about six months ago, aligns interactive shop Agency.com with TBWA\Chiat\Day and Organic with BBDO. Omnicom's third global network, DDB, is already aligned with Tribal DDB. Yet sources said that rather than focus on its role as TBWA's go-to shop for integrated global pitches, Scales was more interested in building Agency.com into an interactive network in its own right.
"When you're basically acquired by a major traditional advertising agency, you better have a management team that gets it," said an agency source, referring to the TBWA and Agency.com alignment. "They were pushing the idea of integration with him, and he didn't have an answer."
Scales declined to comment on his departure, but wrote in an e-mail message, "Let me assure you that my departure was entirely based on strategic differences with TBWA on the future direction of Agency.com."
Agency.com, TBWA and Omnicom all declined comment.
Unlike Organic and BBDO, which share the Chrysler account, TBWA and Agency.com don't share any major clients. They pitched and won the Ask Jeeves account together, and the interactive shop does site development and search marketing for Visa, which TBWA was awarded in November.
The departure illustrates Omnicom's delicate balancing act in implementing Wren's plan, which is meant to better position its networks for integrated global pitches that incr-easingly put a premium on interactive capabilities, while at the same time maintaining the entrepreneurial culture it has fostered for its shops. "Management teams should get together if the management teams feel they want to get together," said one source. "There's not a huge mandate from somewhere that says, 'OK, guys, you're all one.'"
Under Scales, Agency.com rebounded from the dot-com collapse, which hit the shop hard under its founder and CEO Chan Suh. Dallas-based Scales served as COO from 2003 to 2004, when he replaced Suh as CEO. Scales is credited with focusing the shop on bottom-line accountability.
Yet some sources said Scales, who did not have any advertising experience prior to joining Agency.com in 2001 and managing its Dallas office, clashed with some of his own top executives."He didn't have any support in his organization," said a source.
In one instance, which was recounted by multiple sources, David Eastman, managing director of Agency.com's London office, informed Scales about a month ago that he would prefer to report directly to TBWA in London. Scales boarded a plane for London the next day and fired Eastman, only to have his decision overturned and the London chief reinstated by TBWA, according to sources. "At that point, Don knew the time bomb was ticking," said a source. (Eastman and Scales declined comment on the incident.)
Omnicom is looking internally for a successor to Scales, said sources. For now, Tequila Worldwide CEO and president Jeremy Pagden is running the shop. An agency rep said Scales' successor would be named by the end of the month. Candidates at Agency.com are said to include Alan Burgis, svp at the San Francisco office, Tom Lanzetta, COO, and Andy Hobsbawm, chairman of Agency.com London.