Fallon on Budget: ‘We Weren’t Beaten’

Agency Says Statement on Review Was Meant to Protect Its Brand
CHICAGO – Fallon McElligott chairman Pat Fallon said he just wanted to set the record straight when he sent out a strongly worded statement last Tuesday regarding his agency’s inability to come to terms with Budget Rent A Car over the client’s $40 million creative account.
“I wanted people to understand that we couldn’t come together on financial issues and that was why we didn’t get the account,” Fallon said two days after the press release, which implied Budget’s compensation plan was unreasonable, caused a stir in the advertising community.
Fallon said Budget had told the shop it was the “preferred choice” over incumbent Publicis & Hal Riney, Chicago; Cliff Freeman & Partners, New York; and GSD&M, Austin, Texas.
The release said it was the first time in its 18-year history that the agency has declined business on the basis of compensation.
“All I was trying to do was protect our brand from the perception that we were beaten by people we weren’t beaten by,” Fallon said.
Not long after the release went out, the Lisle, Ill.-based company awarded Freeman creative duties. Freeman officials would not comment on the shop’s fee and offered only a brief statement through a representative: “In any new business pitch and subsequent win, it all comes down to chemistry with the client, the quality of the work and the compensation. Very rarely to you ever have a client that you win because of only one of those elements.”
Budget officials said they had been negotiating with both agencies, and that each knew another shop was still in contention for the business. Freeman and Fallon “knew we were talking to them and one other shop,” said Budget marketing vice president Mike Gavelek.
A Budget representative earlier speculated Fallon learned the business was going to Freeman and issued the release as a pre-emptive strike.
Fallon said he was unaware of another agency’s involvement.
“They said we won the pitch strategically and creatively. They said, ‘You are our first choice,” Fallon said.
Sources familiar with the review were not surprised compensation became an issue. According to the RFP, the company said it would put “great weight on the the lowest fixed ceiling.” Others speculated the two parties got hung up on an incentive plan. Fallon declined comment on the issues. – with Kathleen Sampey