The Year in Review: Time Passages

January: Universal Appeal

Baby New Year is barely out of the womb before Universal McCann scores what will be the biggest media win of 2002, prevailing after a 15-month struggle for Sony’s $600 million consolidated media business. Under worldwide CEO Robin Kent, the agency will eventually win 11 of 13 pitches in 2002, worth a total of $1.6 billion in billings (although $300 million-plus of that is business the shop already has and is defending). On its own or with sibling McCann-Erickson, as incumbent or outsider, UM will snare Maytag, Purina, Major League Baseball, Wendy’s and American Airlines, among others. Kent brands UM the most “bundled” of the unbundled media entities, an image that rivals say is disingenuous at best. But in 2002, Universal McCann backs up the boast.

February: The Saturn Eclipse

A pitch to launch one vehicle turns into the steal of the year as Goodby, Silverstein & Partners walks off with General Motors’ $250 million Saturn account. The win unseats Publicis & Hal Riney, which had held the business since 1988 and was credited with helping to create a completely new auto category for the nameplate. Saturn began the review for its Ion youth car assignment in late 2001, then expanded the pitch for all the iron. Two months later, the Goodby team, led by agency principal Jeff Goodby, emerges victorious. The shop will make good on the GM unit’s hunch later in the year, winning acclaim for “Sheet Metal,” a brand anthem spot that shows no cars.

March: Unfit to Print

“It’s appalling how dirty the print business is,” says a print-industry executive as a Department of Justice investigation reveals example after example of shady billing practices between graphics suppliers and ad agencies. The year would bring charges of bid-rigging, phony invoicing, tax evasion, kickbacks and conspiracy. The scandal’s dismal tally: the suicide of one graphics-supplier executive, 10 guilty pleas and impending trials for a handful of former officials and salesmen at The Color Wheel, a Manhattan graphics supplier, and former print department execs at Grey.

April: Selling America

Talk about true believers. Armed with the conviction that advertising can sell anything, the ad industry and the federal government rally to fight the war on terror. To push patriotism, the Ad Council launches its first-ever fundraising drive to bankroll a campaign aimed at inspiring Americans to defend their personal freedoms. This follows the White House’s campaign to link drug use to terrorism in two controversial spots from Ogilvy & Mather that debut during the Super Bowl. Meanwhile, American image master Charlotte Beers attempts to bolster the country’s image in Muslim nations.

June: Omnicom’s Sinking Feeling

With scandal at Enron and Arthur Andersen dominating the business pages, the last thing Omnicom Group needs is the suggestion that its accountants have gotten creative. But a front-page story in The Wall Street Journal raises questions about the formation of Seneca Investments, a company set up to house Omnicom’s Internet assets, and the resulting tempest sends Omnicom shares into a monthlong free fall. The stock plunges 62.5 percent, from a 52-week high of $97.35 on March 4 to $36.50 by June 27. CEO John Wren and CFO Randy Weisenberger take the battle to the Street, firing their accounting firm (the disgraced Andersen), hiring KPMG and holding a conference call with analysts to dispute the appearance of impropriety. By autumn, KPMG will absolve Omnicom and the stock will creep back into the mid-60s.

July: Shot in the Arm

The pharmaceutical industry continues to bolster the ad business in the second half. TAP Pharmaceuticals launches a review of its $100 million Prevacid account, which Merkley Newman Harty & Partners ultimately scores. Deutsch adds a trifecta of creative pharmaceutical jobs, winning a combined $220 million in billings from Novartis: Lamisil (October), Zelnorm (November) and Diovan (November). This follows Novartis’ consolidation of $250 million in global media duties at Mindshare in January. Other beneficiaries include OMD, which picks up $70 million worth of Eli Lilly media in January; BBDO, which adds Pharmacia’s $40 million Rogaine business in February; Bates, which lands Bristol Myers Squibb’s $90 million Glucophage account in March; and TBWA\Chiat\Day and Omnicom-owned healthcare agency Lyons Lavey Nickel Swift, which pitch and win Bayer’s $20 million diabetes-products account in November.

August: Dog Days at IPG

IPG first reveals an estimated $68.5 million accounting imbalance involving McCann-Erickson Europe, a number that seems relatively small in the context of a $6.7 billion company. But by November that figure will balloon to $181.3 million. More important, snakebit analysts lose patience with the repeated restatements and angry stockholders launch more than 15 lawsuits. With trouble at the Octagon motor-sports division, slashed earnings-per-share estimates for both the third quarter and the year, and an “informal” SEC inquiry, few ask why when IPG’s outsider board installs one of its own – Frank Borelli – to play a more active role.

September: Still Doing It

Dan Wieden once said the spirit of the shop he and David Kennedy founded in Portland, Ore., in the early 1980s came from its flagship client, Nike. After 20 years, the agency still produces its best work for the swoosh. Wieden + Kennedy’s “Move,” a fluid pastiche of the movement of 21 athletes, set to piano music, wins the Emmy for best commercial. It caps a year for Wieden that includes the Grand Prix at Cannes in June for the whimsical “Tag” and a gold Lion for the lyrical “Shade Running.”

October: The Weakest Link

The deathwatch begins soon after the papers are signed on Publicis Groupe’s acquisition of D’Arcy Masius Benton & Bowles parent Bcom3. Publicis CEO Maurice L?vy casts a cold eye on D’Arcy, which, having lost $180 million worth of high-profile accounts, including Pampers, Masterfoods and Burger King, is the weakest of Publicis’ four networks. Two weeks after the merger becomes official, L?vy pulls the plug on the 96-year-old shop that created the modern-day image of Santa Claus. Publicis will attempt to parcel out D’Arcy’s accounts to its new siblings. The fate of much of its staff remains unclear.

November: Seismic Shuffle

With D’Arcy Masius Benton & Bowles declared a goner by new parent Publicis Groupe, flagship packaged-goods giant Procter & Gamble packs its bags and
moves its brands. The Cincinnati Kid and its agencies work to shuffle three dozen accounts totaling more than $1 billion in global billings. The spoils go to shops within two agency holding companies: Publicis Groupe and Grey Global Group. P&G’s global marketing officer, Jim Stengel, describes the effort to keep account people and creatives on their brands as “a bit of an art and a science.” Saatchi & Saatchi gets the coveted global Crest account, while sister Publicis takes Metamucil, Charmin and Vicks. Both walk away with $190 million in U.S. billings. Grey is Zest-fully rewarded, while Leo Burnett gets a boost from Bounce, Era and Always. Havas’ Arnold McGrath is squeezed out, but Publicis Groupe’s The Kaplan Thaler Group, which joined the P&G roster earlier in the year when the company bought Herbal Essences from Clairol, is rewarded for those results. The agency picks up key brands Dawn and Swiffer.

December: Waiting to Exhale

Suffering its worst recession in 60 years as 2002 began, there was nowhere to go but up for the ad industry. Spending has started to come back, with a robust upfront signaling better times and top-10 advertiser adspend for the first eight months of the year rising 4 percent to $8.5 billion. Still, it is only a “soft” recovery, and by year’s end, Wall Street’s walk on the downside keeps optimism well dampened. For 2003, prognostications of modest rises over projected 2002 adspend in the U.S. ($235 billion-plus) range from just over 2 percent to 5 percent. But cocktail chatter among the agency rank and file remains gloomy, and with good reason. Just in October, ad agencies cut 1,600 jobs, the biggest monthly decline of the year, according to the U.S. Bureau of Labor Statistics. Agency employment is at its lowest point since January 1999. Overall, the nation’s ad agencies collectively cut 11.3 percent of their staffs in just over two years. The networks have reason for cheer, but happy days are far from back for the troops on the ground.