What’s Next for the Clients That Fired The Richards Group?

Home Depot, H-E-B, Keurig Dr Pepper, Motel 6 and Salvation Army all left the agency following founder's comments

The Richards Group, Keurig Dr. Pepper, HEB, Motel 6, The Salvation Army, The Home Depot
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The rapid exodus of clients from The Richards Group in recent days has created painful uncertainty about the agency’s future and the fate of its 700 employees. But in the brutally competitive world of advertising, the fallout means there’s also a number of sizable accounts suddenly up for grabs.

This week, Motel 6 was the first to end its relationship with longtime agency The Richards Group. The hospitality brand severed ties following remarks by agency founder Stan Richards in an internal meeting that a campaign for the client was “too Black.”

Richards subsequently stepped down, leaving the agency he founded 44 years ago. But his departure wasn’t enough to comfort clients, as a series of other brands ended their partnerships with the independent Dallas agency. The losses included The Home Depot, grocery chain H-E-B, Keurig Dr Pepper and the Salvation Army.

H-E-B, which has worked with The Richards Group for the better part of two decades, spent nearly $24 million on media last year, according to Kantar Media. The grocery chain recently topped a customer satisfaction survey among food retailers during the pandemic. Salvation Army spent $10 million on media last year, according to Kantar Media.

For Motel 6, review was already underway

Motel 6 was in the midst of an agency review process initiated earlier this summer when it parted ways with The Richards Group, according to a spokesperson. The Motel 6 representative added that the company had planned to announce a winner by the end of the year, and the termination of the process with The Richards Group may have accelerated the process. The motel chain also indicated that The Richards Group didn’t have an advantage in the process as an incumbent and was weighted equally with other participants.

Motel 6 spent nearly $19 million on media last year. The company drastically reduced spending to just over $1 million in the first six months of 2020, according to Kantar Media.

Motel 6 plans to continue its relationship with spokesman Tom Bodett and has no plans to change its “We’ll leave the light on for you” tagline with its new agency, according to a spokesperson.

Will Home Depot add creative to its media search?

The Home Depot launched a U.S. media agency review last month, with incumbent Carat defending. That process is expected to conclude some time in December, according to sources with knowledge of the review. Home Depot is now in the process of reviewing creative as well. Consultancy Roth Ryan Hayes is now tasked with helping the home improvement chain find a new creative partner as well as a new media agency, according to sources with knowledge of the process.

Home Depot declined to comment on the process of searching for a new creative agency partner at this time. Roth Ryan Hayes also declined to comment.

It’s unclear at this point whether Home Depot may seek to consolidate media and creative with a single holding company. While sources speculate the process could move faster than a typical creative review, it seems unlikely it could wrap up by the expected conclusion of Home Depot’s media agency review.

Home Depot spent over $444 million on media last year and a little over $153 million in the first six months of 2020, down from nearly $209 million over that period last year, according to Kantar Media.

Looking to recent history for parallels

The current situation with The Richards Group may be unparalleled in recent advertising history. Still, there is some precedent for a quick pivot to a new creative agency following a client ending a relationship in the wake of racist comments.

In early 2016, insurance and financial service company USAA dropped Campbell Ewald as its agency partner in response to news of a racist “ghetto day” email sent by a creative director in the agency’s San Antonio office. USAA quickly pivoted to another agency within IPG, naming MullenLowe as its agency of record two months later. That move proved a temporary one, with USAA consolidating its marketing account with Publicis Groupe later that year.

In The Richards Group case, of course, the comments came from an agency founder, and clients of the independent agency don’t have the option of quickly pivoting to another shop within the same holding company.

The way clients reacted to that situation does suggest that client exits stemming from Richards’ comments may not be over. While USAA opted to terminate its contract, two other clients, Edward Jones and Henry Ford Health System, opted not to renew expiring contracts with Campbell Ewald at the time. Some clients of The Richards Group could now be considering a similar decision.

Fiat Chrysler is ‘evaluating’ its relationship with Richards

For years, some of The Richards Group’s most high-profile work has been for Fiat Chrysler’s Ram brand, including a cinematic “Sandman” spot this summer kicking off “The Power Has Shifted” campaign introducing the Ram 1500 TRX and, perhaps most famously, the 2013 “Farmer” Super Bowl ad.

Now the agency’s future with the client seems uncertain.

“FCA believes hate speech and racism of any kind must never be tolerated,” FCA chief marketing officer Olivier Francois said in a statement. “We have reached out to The Richards Group, as one of the many creative agencies on FCA’s marketing roster, and we are in the process of evaluating our relationship with them to determine what the partnership will look like moving forward.”

FCA spent nearly $197 million on media promoting the Ram brand and over $50 million in the first six months of 2020, according to Kantar Media.

Ryan Barwick and Minda Smiley contributed reporting to this story.

@ErikDOster erik.oster@adweek.com Erik Oster is an agencies reporter for Adweek.