Can Small Changes Solve Big Woes At DDB Chicago?

It certainly has not been a banner year for DDB Chicago. The Omnicom shop has lost business representing about $500 million in billings, a chief creative officer who began in January left in July, the shop is under pressure on its Capital One account from sibling BBDO Atlanta and, as a result, morale is sagging.

Top DDB execs aren’t pointing the finger at president and CEO Dana Anderson just yet, sources said. Many seem to agree that Anderson is a savvy businesswoman whose agency is experiencing a confluence of unfortunate but unrelated events.

Though the numbers behind the losses are significant, most of them can be attributed to one client, J.C. Penney, and the shop has won Safeway’s $250 million account to help offset that (and serve as a bit of a morale booster). The shop also has received increased business from core client Anheuser-Busch in the form of

Nonetheless, Anderson, who arrived in 2004 from Foote, Cone & Belding in Chicago, last week promoted three insiders to managing director in an effort to move some management responsibilities off her plate. Though she said the move was not a reaction to any specific client losses, Anderson said it would give her a chance to do what she does best: meeting with clients.

“I think it might help that there would be more hands-on help from me,” Anderson said. “Would it have changed J.C. Penney? I don’t think so. That guy had stars in his eyes.”

(The “guy” she’s referring to is Penney’s CEO Mike Ullman, who, nine months after meeting Kevin Roberts and hearing his Lovemarks philosophy, hired Saatchi & Saatchi to handle the business without a review.)

The move will also free up Anderson to focus on new business. (Indeed, the shop won the sole new business pitch this year, for Safeway.)

At Anheuser-Busch, execs don’t seem worried about the shop’s fortitude. “I give them all the confidence in how they want to structure themselves,” said Marlene Coulis, vice president of brand management at A-B. “As long as we keep getting the great work we’ve been getting in the past, I’m happy.”

But outsiders are questioning what’s going on at the agency. Sources said Penney’s alone was worth $12-15 million in annual revenue (though the shop will see that income through the end of this year), while Dell and Home Depot, which left in February, were about three-quarters of that amount combined. (The shop also cut 4 percent of its staff—about 22 positions—in April.)

Some wonder whether DDB worldwide chairman and CCO Bob Scarpelli’s relocation to New York this summer had an impact on client relations at the shop where he grew up. Scarpelli insisted that was not the case. “I stay close to the clients there, just as I stay close to all of our top agencies [around the world],” he said. “I’m always there in spirit.”

And North American president Dick Rogers continues to assist the office behind the scenes, sources said. “He’s there as an asset and as an adviser to the office,” said one source.

Of the promotions last week, which included lifting planning director James Lou to managing director of strategy and group creative director Paul Tilley to managing director of creative, most of the attention was focused on the latter because he essentially takes over the duties—but not the title—of chief creative officer, filling that vacant position.

But Tilley said the promotions were about more than just a title. “You can call me the Queen of England for all I care,” Tilley said. “[This structure] is more about making sure that we’re consistently managing the department against the same goals.”

Sources added that the person with the biggest job change is Don Hoffman, who moves from overseeing McDonald’s globally to overseeing all the agency’s accounts. (Tilley had essentially been filling in as the top creative over the two months since short-lived creative director Michael Folino left; Lou’s duties are essentially unchanged.) While Hoffman’s McDonald’s duties will continue, one source suggested someone might be brought in (or promoted) to assist with day-to-day management.

Though the structure is not all that different than what most large agencies have (people in charge of creative, strategy and accounts), Anderson said it gave a sense of equality to all of the agency’s disciplines.

“I really wanted to make those disciplines work together, not to make them even more separate,” she said. Her expectation is that the managing directors, who have worked closely together for awhile, will foster more cross-pollination all the agency’s client business, not just efforts like OfficeMax’s “Schooled” (see page 20) and programming for

But the agency can’t afford to ignore the traditional either. Capital One has asked both DDB and BBDO Atlanta, which joined the roster through a client acquisition last November, to present ideas for a possible Super Bowl buy, sources said. While no decisions have been made about which agency might get the nod, the competition adds one more client Anderson and her lieutenants will have to manage closely.