Virgin Review Process for $25 Mil. Effort in Tatters

Pitches to Start Anew, Sources Say; Time, Control Issues at Fore
LOS ANGELES–Many West Coast agencies that had eagerly anticipated Virgin Entertainment’s review are now singing a different tune.
Virgin, based in Los Angeles, began looking in May for a shop to handle an estimated $25 million branding campaign for its Megastore retail chain and affiliated businesses and Web sites. A selection was originally due last week, but problems have pushed the deadline to the end of this month.
Top California agencies that were invited to pitch but withdrew include Deutsch/LA; Blackboard; Butler, Shine & Stern; Mendelsohn/Zien; WongDoody; and Bulldog Drummond. Leagas Delaney in San Francisco is still participating, but refused to comment. Sources said the client will initiate an entirely new pitch process.
Sources said many agencies felt rushed by the client. “They were pretty demanding to want strategy development, creative and media in the time line that they wanted it,” said one source.
Other sources said the request for proposal indicated the $13 million allocated for the Megastore budget would mainly come from record companies, with only $3 million of that amount being funded by the client.
“Who would be in control?” one source asked. “Would Virgin or the record companies be handing down the orders?”
In addition, those in charge of the four Virgin divisions included in the assignment–Megastore, online, JamCast and Radio Free Virgin–were said to be competing for control.
“There are literally competing agendas,” said a source. “Whoever ends up controlling the agency at the end of this review will basically have de facto power over what products get supported.”
Virgin Entertainment president Glen Ward would only say the search is ongoing. “We’re still in the midst of the process, and we haven’t made any decisions,” he said.
At present, Megastore creative is handled in-house; the $10 million media budget is done by Palisades Media Group in Santa Monica, Calif. K