IPG Says it Will Create Standalone Agency For USAA

Move Comes in Wake of CEO Firing At Campbell-Ewald, Racist Memo

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It has not been a good week for Campbell Ewald.

Credit: USAA

Parent company Interpublic this morning said it terminated the agency's CEO Jim Palmer. Then reports circulated that the Interpublic agency had been dropped by USAA, a major client for the shop. Interpublic issued a statement saying it will be putting a new agency on the account, which Campbell Ewald has handled as agency of record since 2008.

Said the statement: "USAA remains a valued IPG client. We plan to transition our USAA team into a standalone, purpose-built entity over the next few months, so as to assure continuity in the outstanding, business-building programs we deliver for this client."

For its part, USAA said it had not signed an agreement with IPG regarding the work terminated with Campbell Ewald and said it is working with IPG on a transition plan as it searches for a new agency.

It's the holding company's second statement of the day; the first pertaining to Mr. Palmer's termination. The company did not detail why he was let go, but it all comes after after a racist memo surfaced this week, though it was originally sent in the fall. The memo was written by a creative director at Campbell-Ewald and invited staff to participate in "Ghetto Day in the SA," according to a copy that appeared on AgencySpy. The memo, which included a photo of two African-American men, encouraged "ghetto music, malt 45's and ghetto terminology," as well as legal drugs and prostitution for the day.

Mr. Palmer didn't immediately terminate the creative director who had sent it out and didn't tell the leadership team at IPG, according to a person with direct knowledge of the situation. When IPG found out earlier this week, the creative director who issued the memo was immediately terminated.

The creative director worked on the USAA account, according to someone familiar with the matter. IPG did not comment beyond its statement.

Campbell Ewald has also been working the U.S. Navy over the years, and in December of 2014 lost the Cadillac account to Publicis without a review.

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