USAA Consolidates With Publicis Less Than a Year After Racist Email Scandal at Former Agency

USAA, the largest provider of insurance and other financial products to U.S. military members, has consolidated its marketing business with a cluster of Publicis Groupe agencies after a formal review that lasted several months. Starting in the second quarter of 2017, all USAA work currently handled by other agencies will be transitioned to the Publicis umbrella group.

The news comes less than a year after a scandal involving a racist email sent by an executive at USAA's former agency of record, Campbell Ewald, made international headlines and inspired a new round of conversations about diversity in the advertising industry.

Earlier this year, Publicis Groupe announced it would transition to a more collaborative model, and several of its shops will work on the USAA business. Saatchi & Saatchi will lead creative with Razorfish on digital, Prodigious on content marketing, MSLGroup handling public relations, and Mediavest | Spark running media buying and planning for the client.

USAA's announcement also includes a pledge that 30 percent of all staffers working on the business come from "diverse communities," making it the latest in a series of companies including General Mills, HP and Verizon to make specific diversity demands of its agency partners.

"Publicis Groupe is the right fit with USAA's culture, sharing our passion for serving America's military community and belief in the value of diverse perspectives," said senior vice president for marketing and communications Roger Adams in a statement. "Their integrated service offering and approach to diversity perfectly complement our team at USAA. We will be better equipped to deliver integrated and impactful communications to our employees, members, prospective members and community partners."

Publicis Groupe chairman and CEO Maurice Lévy said that for USAA, his company "delivered a customized strategy and program that demonstrated the positive impact of this new organization under one client leader who can leverage all our capabilities and competencies." The group handling the account will spread across three separate holding company "hubs" including Publicis Communications, Publicis.Sapient and Publicis Media. USAA also has retained WME | IMG to promote sponsorship-related events like the annual Army-Navy football game.

USAA spent approximately $146 million on paid media in the U.S. in 2015, per Kantar Media.

The past year has brought unexpected controversy to the USAA organization. In January, the group abruptly terminated its eight year contract with former AOR Campbell Ewald after Adweek's AgencySpy blog brought to light a racist email scandal. The site published an internal all-staff message from a white creative director promoting a "Ghetto Day"-themed agency party late last year. Later the same week, USAA ended its relationship with Campbell Ewald, and parent company IPG fired agency CEO Jim Palmer.

USAA subsequently sent its marketing business to fellow IPG shop MullenLowe, which will no longer work on the account as of the second quarter of 2017.

Publicis Groupe's "The Power of One" approach has recently factored in several winning pitches, most prominently Walmart. The retail giant consolidated its marketing business with Publicis this summer, ending a nine-year relationship with The Martin Agency.