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DraftFCB Retains Kmart Account After Lengthy Review

Pun-Filled Ads Helped Interpublic Shop Hold Onto Retailer's Business

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A few well-placed puns--and millions of views on YouTube--appear to have turned the tide in DraftFCB's favor. The Interpublic Group of Cos.-owned agency retained the Kmart account, against all odds.

The pitch was one of the larger and more protracted creative reviews of 2013. Typically defending shops don't have a high likelihood of holding onto a piece of business that goes into review. But at the end of this one, Kmart ultimately chose to keep its brand creative account with DraftFCB -- and then some. The fashion marketing portion of the account, which had been handled by Peterson Milla Hooks since 2011, is also being consolidated at the agency.

A spokeswoman for the retailer confirmed the moves in a statement. "Kmart has concluded its agency review. DraftFCB will retain its AOR status as well as acquire additional responsibilities for our fashion business." DraftFCB declined to comment.

DraftFCB successfully defended the Kmart business at a time when it has no CEO; Carter Murray, who was hired from WPP's Y&R, is still on a garden-leave period and won't begin in his new role till September. Meanwhile, for Interpublic's McCann, which faced its sibling shop in the review, it's one of the few pitches in the past year it's not managed to win. Either way, for parent company Interpublic, the Kmart business stays within the family.

For DraftFCB, the win is a bit of a reprieve, given it has seen a number of creative accounts defect in recent years, including MillerCoors and SC Johnson. It's still working with Yum Brands' KFC and Taco Bell, though it is facing competition when it comes to the latter. Sibling agency Deutsch has moved in on key Taco Bell creative assignments this year, beginning with a 60-second Super Bowl spot.

Still, even though DraftFCB will surely be celebrating its win in the coming days, it has an uphill battle looming. Sales at Kmart have been lackluster, and there will be pressure to show better results during the all-important back-to-school and Christmas seasons. In the first quarter, domestic same-store sales fell 4.6%, with decreases in most categories. The retailer said its largest declines were in the grocery, household, pharmacy and drugstore categories.

Kmart's Ship My Pants ad was a viral success.

DraftFCB came on strong in recent months with a slew of spots for Kmart -- most notably, the popular, pun-tastic ads "Ship My Pants" and "Big Gas Savings." Both attracted attention from consumers and the news media. Saucy wordplay and sophomoric humor made both ads a viral hit--together they racked up nearly 25 million views on YouTube--while promoting the retailer's Shop Your Way program. Ship My Pants highlighted consumers' ability to ship items they can't find in store to their homes for free, while Big Gas Savings focused on fuel discounts for the program's members.

Both ads were overseen by DraftFCB's chief creative officer Todd Tilford, and on the client side, by Kmart's CMO Andrew Stein.

Many of adland's shops were conflicted out of the review, as Kmart's operations spans multiple business sectors, including clothing, electronics, furniture and home goods. DraftFCB beat out sibling agency McCann, and it's believed that Dentsu-owned McGarryBowen, which is Sears' creative agency, also participated in the review.

The review was not handled by a search consultant and was instead managed internally by the company's procurement department. Kmart, since CMO Mark Snyder departed in 2011, has had Mr. Stein acting as CMO. Kmart also retained media agency MPG after a lengthy review in 2012.

Kmart's sibling brand Sears outspends the discount retailer by a long shot. Sears in 2012 spent about $333.8 million on U.S. measured media, according to Kantar Media, but Kmart is a large spender nonetheless. In 2012 it spent $211 million on measured media, down 2.3% from the prior year. Sears' spending in 2012 was down 6.8% from 2011. All told, Sears Holdings in the U.S. spent $642 million on measured media and nearly $785 million on unmeasured media, according to Ad Age's DataCenter, making it the 22nd largest advertiser in the U.S.

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