H&R Block Moves $120 Million Account to DDB

Business Shifts From Creative Incumbent Campbell-Mithun Without a Review

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NEW YORK (AdAge.com) -- Tax preparer H&R Block has shifted its $120 million marketing account to Omnicom Group's DDB without a review, dealing a blow to the marketer's creative agency of nine years, Interpublic Group of Cos.' Campbell-Mithun.

The move to DDB could be a sign that H&R Block is feeling heat from rival TurboTax, the leader in the tax software market.
The move to DDB could be a sign that H&R Block is feeling heat from rival TurboTax, the leader in the tax software market.
The surprise move underscores the value of marketing relationships at the CEO level. H&R Block's president-CEO of less than a year, Russ Smyth, has ties to DDB from his 21-year career at McDonald's Corp. Most recently, he had served as president of McDonald's Europe.

"DDB has a proven track record for generating strong creative that builds and maintains leadership brands," Mr. Smyth said in a statement. "Having worked with the agency before, I know we can expect a great partnership that will help grow our business and enhance our brand."

Mr. Smyth has asked DDB to help it reposition its brand nationally, and the account will be handled jointly out of the agency's New York, Chicago and West Coast offices, a DDB spokeswoman said.

Kansas City, Mo.-based H&R Block has kept its marketing budget steady over the past couple of years, spending about $120 million in U.S. measured media, according to TNS Media Intelligence. The bulk of those dollars are concentrated on pushes around tax season.

This year, the marketer upped its TV advertising budget slightly to 85% from 81%, according to TNS Media Intelligence, and returned to the Super Bowl after a five-year hiatus. It sponsored the pregame show, bought five pregame spots and made a $3 million buy for a 30-second spot featuring Abe Vigoda as the Grim Reaper.

H&R Block also stepped up its social media efforts, with a heavy presence on Twitter, MySpace and Facebook, and held a promotional blitz for "National Tax Advice Day," where it sent thousands of tax professionals into malls, grocery stores and online to dole out advice. It also saw its first foray into mobile marketing.

H&R Block's 2009 campaign from Campbell-Mithun was well-received, but the move to DDB could be a sign that H&R Block is feeling heat from rival TurboTax, the leader in the tax software market.

For Campbell-Mithun, the move means the sudden loss of one of the agency's biggest accounts. Agency CEO Steve Wehrenberg told Ad Age his shop was "blindsided" by the loss of what he called its fifth or six biggest account.

Mr. Wehrenberg also suggested that the decision was prompted largely by H&R Block executives' ties to McDonald's. In addition to Mr. Smyth's role at the fast feeder, H&R Block is also being advised by consultant Larry Light, formerly McDonald's global chief marketing officer; Campbell-Mithun, Mr. Wehrenberg noted, is on Burger King's agency roster.

"They speak McDonald's, and we're a Burger King shop," he said.

"We hope it goes in the right direction," Mr. Wehrenberg said. "But I don't think they'll find an agency that can replicate what we did for them over the past nine years."

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