Starcom Not Defending Disney Media Business

CEO Lisa Donohue Tells Employees Decision Was in the Publicis Group Agency's Best Interests

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NEW YORK (AdAge.com) -- Publicis Groupe's Starcom has told Disney it will not be defending the $2 billion media account the marketer put into review earlier this month, according to executives with knowledge of the matter. The move brings an end to the decade-long relationship.

Lisa Donohue
Lisa Donohue
The announcement was made internally by Starcom USA CEO Lisa Donohue during the shop's U.S. meeting, which was telecast to the entire U.S. operation on Friday. One industry executive said Starcom felt it was best not to defend the business after "looking at their own financial position, their ability to choose and select partners and the situation within Disney's corporate structure." A Disney spokesman declined to comment on the specifics of the review.

In April, Walt Disney Pictures named M.T. Carney, formerly a partner at Naked Communications' U.S. operations, its top marketer. Disney Studio Chairman Rich Ross had said earlier that he was looking outside of Hollywood for a new marketing leader, one with an ability to shake things up while helping the company establish a stronger position in digital. Since the media review encompasses more than just the studio division, Ms. Carney is only one of several key executives leading the new agency search. The Disney Network and ESPN are not part of the media review, and those businesses will continue to be managed by Starcom.

In a statement, Starcom said: "Starcom has declined the invitation to pitch the Disney business in North America. With this decision, Starcom supports every person who has served this client with passion and commitment for the last decade. We wish Disney only success in their future partnerships and endeavors."

One industry executive who heard Ms. Donohue's speech said the Starcom CEO told employees the decision was about making a choice on what they felt was the right thing to do. Paraphrasing Ms. Donohue, the executive said the agency CEO said: "As you all know, they called for a review, and we have decided that we are not going to participate. We stand by the work we created. And the client just gave us a glowing review, but sometimes you have a choice, and you get to make a choice to say, 'We support you, but if you're going down this path, we will applaud your efforts but not participate.'"

She then told Starcom employees that the agency would work with Publicis to come up with the "right solution." She then asked everyone who has worked on the Disney business over the last 10 years to stand up, and they were given a standing ovation by their coworkers.

An industry executive said the agency is not anticipating any layoffs and that it will continue to work with Disney until the marketer has a new agency in place.

This is one of a number of long-term agency marketer relationships that have come to an end over the past year. Earlier this year, Aflac parted ways with Fitzgerald & Co. after a 20 year-relationship on its $70 million traditional and digital media-planning and -buying accounts, awarding them, respectively, to Publicis Groupe sister shops MediaVest and Digitas. In a bit of role reversal, Interpublic Group of Cos.' Carmichael Lynch walked out on Harley Davidson in August after managing creative and media for the motorcycle manufacturer for 31 years. The marketer recently awarded the business to Starcom, Digitas and Victor & Spoils. And McIlhenny Co., the makers of Tobasco, shifted its creative account to WPP's Ogilvy West in Los Angeles, ending a 24-year relationship with Omnicom Group's TracyLocke.

Starcom has shown momentum lately. Last month, the agency won Darden Restaurants' Red Lobster, Olive Garden and Longhorn Steakhouse media accounts, totaling nearly $300 million, and later that week Best Buy consolidated its nearly $300 million media planning and buying account with the agency. And in mid-November, Harley Davidson selected Starcom as its new media agency of record.

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