last Tuesday night Deutsch New York staffers got word that the agency is withdrawing from the IKEA review. The move comes shortly after J&J brand Tylenol chose to cut short a review for their business, handing the work to the Martin Agency. Deutsch had been the only competitor on Tylenol, but left Berlin Cameron United, Euro RSCG, Kaplan Thaler and Ogilvy to fight for IKEA.
“After much consideration we have decided to withdraw from the IKEA review. We have a very rich history with this great client; even in good relationships you have philosophical differences and the time comes when you need to go your separate ways,” Deutsch NY CEO Val DiFebo said in a statement. “We wish them continued success.”
Interestingly, though the news happened last night, both client and agency were prepared with statements. Update: As mentioned above, Deutsch withdrew Tuesday. Per IKEA, “As a long standing partner of ours we respect Deutsch’s decision to withdraw from the review. We want to thank them for the good work they have contributed over the years,” said Marty Marston, Public Relations Manager IKEA. “We are confident that we have four highly qualified agencies to select from as we decide on our communications partner.”
Word is the IKEA account wasn’t bringing in what it used to thanks to a slate of product recalls. The agency first began working for IKEA in 1989, but the relationship ended ten years later when the fickle brand began looking elsewhere for marketing and advertising communications. IKEA returned to Deutsch in 2006, where it has been ever since.
On top of the product recalls, IKEA has faced negative press after two Russian executives turned “a blind eye to bribes paid by a sub-contractor to secure electricity supplies for its St Petersburg outlets,” reports the Financial Times.
In France where IKEA is the country’s largest furniture retailer, the company may be crippled by a long-term strike over this year’s proposed pay raise of just one percent for all employees. The union supporting IKEA’s workers is demanding four percent. Corruption and labor issues could severely tarnish the brand that’s built a reputation for being socially responsible. Bottom line: it’ll be a tough row to hoe for whichever agency nabs the business. Final presentations are mid-March.
But was Deutsch’s move too little too late? If asked to participate in a review, the old Deutsch would have told the client where to put their business.