A Navy spokeswoman said the move reflects the increasingly challenging military-recruiting environment and the need to reach a younger generation in ways that go beyond what is spelled out in the current ad contract. She said the scope of the marketing duties are being expanded to include newer digital-media and social-networking programs, necessitating a new bid.
Spending outpaced original contract
There were also some indications that spending on the Navy's ad contract was outpacing what was originally forecast, forcing a new bid to set a higher maximum. The Navy said it is meeting its recruitment goals.
Campbell-Ewald said it will defend the business. The agency has handled the Navy since 2000 and in October 2005 snagged a one-year contract renewable annually for up to five years. The Navy ads are themed "Accelerate your life," and the won Best of Show late last fall in the D Show, a regional creative contest. That contract had two years left to run.
Annual recruitment spending by the Navy in measured media is about $30 million a year, but a big chunk of all military-services spending goes toward unmeasured media. When the Navy contract was awarded in 2005, there had been talk it could be worth up to $92 million a year, or up to $468 million over the five years.
It is rare for government-ad contracts for the renewal option not to be exercised. The Navy said it would again offer a one-year contract, renewable for up to five years, but offered no monetary details.
The government sector has been the fastest-growing part of Campbell-Ewald's business in the past five years and has helped the agency offset budget cuts from client General Motors Corp. Besides the Navy, the agency also handles the U.S. Postal Service and the U.S. Mint.