Blockbuster Splits With Doner

Agency Said It Resigned Account as Retailer's Ad Spending Plummeted

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NEW YORK ( -- Movie rental giant Blockbuster and its creative agency of record, Doner, are parting ways after nearly a decade, the agency said.
. Credit: AP

The status of Blockbuster's media account, which is handled by Camelot Communications, Dallas, is unclear.

Representatives for Camelot could not be reached. Blockbuster did not return calls.

'No advertising spending'
Doner Chairman-CEO Alan Kalter said his agency in September chose to resign the account despite a 10-year relationship with Blockbuster due to a plummet in ad spending at the retailer: "There is no advertising spending whatsoever, currently or forecasted," Mr. Kalter said.

Marketing spending at Blockbuster has roller-coasted in recent years, according to TNS Media Intelligence figures.

U.S. measured media spending for Blockbuster totaled $65 million in 2004, then more than doubled to $154.2 million in 2005, before sinking to $44.7 million in 2006, according to TNS.

But for the fist six months of this year, Blockbuster spent $86 million, of which $80.7 million was devoted to marketing the online store, according to TNS.

Client losses
At the same time, Blockbuster is just one of a string of clients -- including, La-Z-Boy, Outback Steakhouse and Six Flags, Sylvan Learning Centers -- that have exited the Southfield, Mich.-based independent agency this year.

"We're seeing a lot of losses and not hearing a lot about wins," said Ken Robinson, principal in New York with agency consultant ARK Advisors.

"They have been considered a best-in-class agency in the U.S. and consistently done good work, but for some reason, the retail clients are leaving," Mr. Robinson said. "It's leaving people scratching their heads, wondering what's happening."

Dallas-based Blockbuster's account move comes as the marketer attempts to keep up with online movie-rental rival Netflix under the guidance of a new chairman-CEO, James W. Keyes, a 20-year veteran of 7-Eleven convenience stores who this summer replaced former Blockbuster Chairman John F. Antioco.

Blockbuster, which has 7,800 stores throughout the Americas, Europe, Asia and Australia, reported widened losses for the third quarter. For the period ended Sept. 30, net loss was $35 million, compared with a net loss of $24.7 million in the year-prior period.

Los Gatos, Calif.-based Netflix, meanwhile, posted profits of $15.7 million in the quarter, up from $12.8 million in the third quarter of 2006.

GSD&M, Richards
Where Blockbuster will shift its creative account remains to be seen, though a number of industry sources -- as well as Doner's Mr. Kalter himself -- speculate Mr. Keyes may call upon familiar agency partners such as Omnicom's GSD&M Idea City, Austin, and independent Richards Group.

"If Jim Keyes decides to hand the business over to an agency he worked with at 7-Eleven, I wouldn't be surprised," Mr. Kalter said.

A representative for Idea City declined to comment, and representatives for Richards Group could not be immediately reached.
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