The U.S. Army Will Eliminate the Majority of Its Internal Marketing Department

Reduction follows audit and agency review that sent business to DDB

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The Army launched a new campaign called 'Warriors Wanted' last year. U.S. Army
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The U.S. Army plans to significantly reduce the size of its marketing department, according to internal communications and statements provided by an Army representative.

The civilian team handling recruitment marketing work for the Army will be less than one-third its previous size, and annual fees for the armed forces division’s new ad agency, DDB, could be significantly lower than those earned by McCann Worldgroup, which has been the Army’s agency of record for more than 12 years and recently began to wind down its work on the account. The Army now plans to rely more heavily on military personnel in its marketing efforts.

Spokespeople for DDB and McCann declined to comment for this story and referred to the Army.

A letter sent to all current civilian, nonmilitary employees of the Army Marketing and Research Group, or AMRG, on July 11 confirmed the staffing changes. It followed a May 30 memo in which now former Secretary of the Army Mark T. Esper announced to Army, Army National Guard and Army Reserve leaders that the AMRG as it has existed since 2013 would disband, with the Army relocating all marketing operations to Chicago by Aug. 1.

The new entity will be called the Office of the Chief Army Enterprise Marketing, or OCEAM.

“AMRG’s current organizational structure has 61 authorized civilian positions and the new structure will only have 20 authorized civilian positions,” read the letter, which came from the Army’s Human Resource Management directorate. “We would like to know, your best intent, whether or not you would relocate to [Chicago] if your position is moved.”

Army Public Affairs Officer Ruth Castro confirmed the letter’s authenticity, writing, “The purpose of the letter was to determine whether AMRG [civilian] employees would intend to relocate to [Chicago]—the location of AMRG’s successor organization—if their positions are moved.” Additionally, she wrote, the letter will help the Army “assist [civilian] employees with placement opportunities and Voluntary Separation Incentive Pay/Voluntary Early Retirement Authority programs if they are not eligible or elect not to relocate.”

Castro wrote of OCAEM that its “footprint … is smaller than that of AMRG, and the mix of civilian and military positions is different as well. The positions being created for OCAEM are tailored specifically to meet the needs of the Army marketing program.”

She also echoed a June Military Times article in which another spokesperson stated that the location of the OCEAM office in Chicago has not yet been chosen and that the agency “will be operational in mid-2020.” When asked whether the Army would reduce its overall marketing budget as well as its total civilian staff, Castro wrote, “The Army determines spending levels for marketing programs based on appropriated budgets. The size of the office is not a factor for budgeting.”

The total amounts allocated to cover “recruiting and advertising” for the Army in the Department of Defense Appropriations Act and The National Defense Authorization Act for Fiscal Year 2020, passed by the House of Representatives on June 19 and July 12, do not differ significantly from the numbers in the previous year’s budget.

The strategic changes follow an internal audit that found millions in “ineffective” spending on Army marketing for fiscal year 2016. The audit occurred during an extended agency review that ultimately resulted in Omnicom’s Team DDB beating IPG and WPP to win the business.

Public documents from a legal protest filed by WPP’s Possible in late 2018 after that agency was eliminated from the competition list DDB’s own “total evaluated price” for the 10-year deal at $135,951,775, meaning average annual earnings from the basic contract would be approximately $13.5 million. The agency’s only publicly available work orders, signed in November 2018 and February 2019, show DDB managing a guaranteed spend of $7,050,000, with the 2019 phase-in task order, or the agency’s first official work onboarding the business, worth a potential $16,070,524 in total client spend from February to May.

By contrast, multiple contracts awarded to McCann Worldgroup in January 2017 show the IPG network, which also includes UM, Weber Shandwick, MRM//McCann and Momentum, overseeing more than $100 million in taxpayer funds for the Army, according to the Federal Procurement Data System.

Since most agency fees on government accounts like the U.S. Army’s come from individual task orders that extend beyond the primary contracts, and DDB has not yet taken over the business in full, it is unclear how much the account will be worth to the Omnicom shop. But the WPP filing, along with government records, indicate DDB’s annual billings will be smaller than McCann’s were. This conclusion is in keeping with the Army Audit Agency’s recommendations that the Army look for savings across its recruitment programs, along with Possible’s claim that DDB won the account largely because it offered to do the work previously assigned to McCann at prices “lower than the incumbent contract.”

The Trump administration also withheld approximately 50% of the Army’s total marketing budget as part of its most recent defense spending bill, signed into law by the president last August. That bill stated that the remainder of the funds would remain frozen until Esper submitted a final report on the audit to the Senate Armed Services Committee and the House Armed Services Committee.

Adweek filed a Freedom of Information Act, or FOIA, request for the full report but has not yet received a response.

In 2018, the Army missed its recruiting goal for the first time since 2005, falling short by approximately 6,500 soldiers despite relaxing regulations that disqualify applicants due to health or behavioral issues. Earlier this month, however, reported that the organization is “confident” about hitting target numbers this year after adding 700 military recruiters to the team and turning toward more “short videos and memes” on platforms like Instagram and TikTok in an effort to attract young Americans.

McCann’s most recent Army campaign, “Warriors Wanted,” launched late last year.

@PatrickCoffee Patrick Coffee is a senior editor for Adweek.