$46.8B Record U.S. agency revenue in 2015
It's one of the most shocking allegations to hit adland in years. The lawsuit filed March 10 against WPP's J. Walter Thompson Co. and now ex-chairman-CEO Gustavo Martinez by the agency's chief communications officer, Erin Johnson, claims that Mr. Martinez routinely made racist and sexist remarks, and that there are video and emails to prove it.
The heavily detailed lawsuit alleges that human resources had been notified and that numerous senior executives had either witnessed the remarks or had heard them from Mr. Martinez himself.
Perhaps the most discussed incident mentioned in the suit deals with a meeting that took place in Miami last May.
According to the suit: "On or about May 18, 2015, Martinez addressed a group of approximately 60 employees for a global meeting to pilot a new agency method for generating ideas. The previous night, there had been a large party at the hotel's night club attended by mostly African-American guests. At the start of his presentation, Martinez described the hotel as 'tricky.' He explained that he 'found … different and strange characters in the elevator.' He further explained, 'I was thinking I was going to be raped at the elevator,' but 'not in a nice way.'"
The filing touched a raw nerve in the industry, igniting heated discussion over whether women and minorities have actually advanced since the bleak days depicted in the fictional series "Mad Men."
It's not just what the lawsuit claims either. The company's response has been under a microscope as well. The first response from JWT and parent company WPP, the day the lawsuit hit, was a statement from Mr. Martinez, wherein he asserted his innocence, saying there was "absolutely no truth to these outlandish allegations and I am confident that this will be proven in court."
That same day, WPP sent a memo to senior executives noting that since Feb. 25, the company had been investigating and "found nothing as yet" to substantiate the charges. The following day, JWT reiterated that it was investigating. Then last week, WPP hired an outside law firm to investigate the charges.
Exactly one week after the suit was filed, and two days after WPP said it hired external counsel to investigate the matter, Mr. Martinez "by mutual agreement" stepped down "in the best interest" of JWT, according to a company statement. He was replaced by Tamara Ingram, an industry veteran who in 2015 was named WPP's chief client team officer, overseeing the holding company's 45 global account teams. The appointment makes her part of an elite group of women running a major agency.
Clients steered as clear as possible, either declining to comment or saying that there had been no changes on their accounts with JWT.
But there's been plenty of talk on social media. Some people have criticized what they perceive as WPP's eagerness to defend Mr. Martinez, and question why he was not placed on leave when the lawsuit hit. Some applauded WPP for dealing with the issue swiftly, while others branded the moves as slow and tone deaf. Others debated whether cultural differences (Mr. Martinez is a native of Argentina) could have accounted for some misinterpretations.
But the most prevailing chatter was reserved for an issue that has dogged the industry for decades: Why isn't the ad industry friendlier to women and people of color, particularly in senior roles, despite all its intern programs, panels and outreach about the importance of diversity?
The suit triggered an outpouring of emails and comments from Ad Age readers recounting personal instances of mistreatment or indifference from top-level marketing execs. Several railed against what they called adland's self-promotional -- but in their eyes, empty -- conversations about its moves to diversify talent. Industry activists also renewed their calls to get more women into higher-level positions, holding up the suit as evidence.
It remains to be seen how the case will shake out as it winds through the courts.
Toward the end of last week, lawyers for both sides were battling over the admissibility of video of the Miami meeting. Ms. Johnson's team had filed an amended claim asking that it be admitted because it allegedly contains proof of Mr. Martinez making some of the remarks in question. WPP asked that it be denied because it was actually footage of "the development and testing of a process that is highly confidential and proprietary to JWT."
But for JWT, at least, it was a very long week as the agency aimed to get back on track.
Mr. Martinez was at the agency the day his departure was announced. He gave a brief and what some people called gracious speech, thanking the agency for the two years he spent there, and then he introduced Ms. Ingram.
But even Ms. Ingram's arrival was picked over on social media, with critics noting that her email to staff thanked Mr. Martinez, but said nothing about Ms. Johnson.
Regardless of how JWT employees feel about Mr. Martinez's exit, the news of his departure was said to have been a relief. People close to the matter said that the days in between the lawsuit's filing and his departure were stressful, and the energy in the office was palpable despite being unusually quiet.
"People can move forward now," said one person with knowledge of the agency.