Tribal DDB Learns Lesson In Conflicts

For all the talk of digital as a different ball game, some rules remain the same, particularly the one that says agencies don’t work for clients’ competitors. While project work inevitably leads to some gray area, Omnicom Group’s Tribal DDB found out this week the danger of straddling that fence.

At issue is Tribal’s work this year for both Wal-Mart and J.C. Penney. Its Dallas office collaborated with GSD&M to build a Wal-Mart back-to-school Web site launched in July. At the same time, Tribal’s Chicago office was at work on a back-to-school site for J.C. Penney, a DDB client.

During this time, its management scrambled to set up a conflict agency, per sources, hoping to retain Penney project work and Wal-Mart. The conflict agency, tentatively called Arsenal, would handle Wal-Mart, the U.S. Air Force, AT&T and other GSD&M clients, according to an Omnicom rep.

Unfortunately, Tribal neglected to tell Wal-Mart of the behind-the-scenes shuffling, sources said, causing it to dismiss the agency from its new $560 million account review after Tribal CEO Matt Freeman publicly denied working with the retailer.

The agency is still in the midst of setting up Arsenal, a DDB rep said, conducting a trademark search on the name. The nascent 40-person agency, led by Jeff Erickson, former director of account management at Tribal, already operates in a separate office space from that agency, reporting through Omnicom’s Diversified Agency Services unit, the rep said.

The Wal-Mart dismissal was “a miscommunication,” she said. The client declined comment.

Arsenal has been called on for other sticky situations. Tribal DDB has a five-year relationship with McDonald’s. In July, Tribal client Pepsi paid Arsenal to create a Web site for McDonald’s competitor Arby’s. Freeman said since the work came from Arsenal and was paid for by Pepsi, Tribal did not need to contact McDonald’s about it. McDonald’s late Friday contacted Adweek and via voicemail said it had been assured by Tribal that the shop had never been employed to work on Arby’s.