OLD NAVY OPENS REVIEW FOR $130 MILLION ACCOUNT

First Time Gap Unit Seeks Outside Agency for Creative

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NEW YORK (AdAge.com) -- Gap Inc.'s Old Navy unit has opened a search for its first-ever advertising agency to handle creative duties.

Old Navy has hired Boston-based Pile & Co. to conduct the search, said Jonathan Finn, an Old Navy spokesman. Mr. Finn said Pile will invite a "select group" of agencies to participate in the review, but would not elaborate on the type of shop, in terms of size or location, Old Navy seeks. Semifinalists will be named by March, with a final decision expected in late April.

Mostly TV
Old Navy spent $132 million in measured media

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for the first 10 months of 2003, mostly on TV advertising, according to TNS Media Intelligence/CMR.

Whichever agency Old Navy appoints will work "in partnership" with the retailer's marketing team, Mr. Finn said. While outside agencies occasionally have been tapped to handle projects, the retailer's decision to find an outside agency to work on its general-market creative advertising is "all about bringing in new ideas, fresh insight and an increase in bandwidth," Mr. Finn said. "We are positioning ourselves for future growth."

Since Old Navy's launch in 1994, advertising has been handled in-house under Dennis Leggett, senior vice president and creative director. Mr. Leggett reports to Susan Wayne, Old Navy's executive vice president of marketing. Ms. Wayne joined the Gap brand in June 2003.

Old Navy's TV ads for 2003 were among the most recalled by consumers, according to Intermedia Advertising Group, New York, which measures advertising and brand recall against all other new advertising. IAG ranked ads featuring actress Morgan Fairchild parodying '70s TV shows No. 7 and No. 10 in a top 10 ranking of recalled spots of last year.

Other agencies
Omnicom Group's PHD handles media buying for the retailer, while independent JL Media does radio buying and independent Vidal Partnership handles Hispanic market creative. Those assignments will not change.

The search for an agency comes at a time when all Gap Inc. divisions have been paying closer attention to their marketing communications, under the scrutiny of Gap Inc.'s president-CEO, Paul Pressler, who joined the company in September 2002. The company recently named Jeff Jones executive vice president of marketing for the flagship Gap brand. In addition to the hiring of Ms. Wayne at Old Navy, Jack Calhoun was named executive vice president of marketing in March of that year. And Mr. Calhoun's Banana Republic hired Omnicom's Goodby, Silverstein & Partners to handle an advertising assignment after a long review process.

'New kind of style'
Old Navy, with $6 billion in sales, "has been successful by selling clothes like the Gap's but at lower prices," said retail consultant Kurt Barnard, founder of Barnard's Retail Consulting Group. Sales in apparel are slowing across the board, said Mr. Barnard. Now "Old Navy's price advantage is an edge that is beginning to dull around the edges." What Old Navy needs, he said, is an "identity and perhaps a new kind of style," and an agency will help Old Navy identify that new style and look.

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