DEUTSCH, GOTHAM SPLIT $180 MILLION BANK OF AMERICA ACCOUNT

Multicultural Accounts Shifted to IPG-Backed Shops

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NEW YORK (AdAge.com) -- Bank of America has split its advertising account, worth more than $180 million, between two New York-based agencies within Interpublic Group of Cos.

Interpublic's Deutsch will handle creative for the bank's retail operations, while sibling Gotham will handle advertising for business-to-business and wealth management programs, which include the bank's investment banking and asset management units.

Sharing some media duties
Deutsch was also appointed media agency of record, although an executive with knowledge said the media buying portion of the account will be handled by Interpublic's Magna Global. Peter Gardiner, partner and chief media officer at Deutsch, said his agency will do the buying, but "it looks like we will involve Magna in some way," he said.

The bank's account was previously

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handled by another Interpublic agency, Bozell, New York, which is slated to merge into sibling Lowe in the coming months, according to Interpublic executives familiar with the plans. Media was handled by Starcom, a unit of Publicis Groupe, which had the business for only 14 weeks following a review in last August.

'Surprised' over firing
"I'm quite surprised because I don't think we have ever been terminated after a relationship so brief and one that from every indication I had was going very well," said Jack Klues, CEO of Starcom. "We went through a rigorous review process with them in 2002, which went about five months or so, competed against IPG-held media interests and won. That makes this loss all that more disappointing."

Bozell was the point player in a six-week review that began in September, when the bank asked Omnicom Group and Interpublic to pitch as holding companies in an effort to achieve more coordination of the bank's advertising for its various units. Interpublic won that review with a team including Bozell, interactive shop R/GA and direct marketing shop DraftWorldwide, but the media and multicultural portions of the account remained with their previous shops.

Multicultural shakeup
In the multicultural arena, where Bank of America spends more than $40 million on marketing and advertising, the company is dumping its WPP Group-backed Asian-American and African-American agencies to align the multicultural business more closely with Interpublic, despite conflict issues.

Bank of America will keep its longtime Hispanic agency, Houston-based independent Lopez Negrete Communications. WPP's Kang & Lee, New York, an Asian-American agency, and UniWorld, New York, in which WPP has a 49% stake, lose their business. UniWorld's African-American assignment is expected to move to Carol H. Williams, an independent agency that handles several Interpublic clients including General Motors Corp. Ms. Williams did not immediately return calls.

Asian-American account conflict
Conflict problems arise with the Asian-American business because IW Group, Los Angeles, and GlobalHue, Southfield, Mich., both 49% owned by Interpublic, handle Washington Mutual and Union Bank, respectively. Bill Imada, chairman-CEO of IW Group, said the goal is to accommodate both Washington Mutual and Bank of America, perhaps with IW starting a separate shop for Bank of America.

"We've talked to Washington Mutual and Bank of America to see if there's an opportunity to develop a firewall of some type to separate the two pieces of business," Mr. Imada said. "We're trying to move in that direction. We're still talking about it. We want to make sure everyone is comfortable."

GlobalHue may ultimately not be a factor, as the agency is in talks with Interpublic to buy itself out of the holding company. GlobalHue did not immediately return calls, but an Interpublic executive said that recently GlobalHue executives "are off the cc list" on Interpublic e-mails, indicating that GlobalHue's departure may be getting closer.

Increased ad spending
Bank of America has been among the few financial services advertisers to significantly hike its ad spending during the recent economic slump. CEO Kenneth Lewis has made marketing a priority as the company continues to expand its presence following the 1998 merger of Nations Bank and Bank of America. After a 37% increase in spending in 2001, the bank spent $182.6 million from January to November 2002, up from $167.4 million for all of 2001, according to Taylor Nelson Sofres' CMR.

Catherine P. Bessant, chief marketing officer at Bank of America, was traveling and could not be reached.

Homecoming for Deutsch
The appointment is a bit of a homecoming of sorts for Deutsch, whose Los Angeles office won the Bank of America business in 1997, only to lose it after the merger. The account went to Nations Bank's agency Temerlin McClain, then a unit of True North Communications. The business went to Bozell after Interpublic acquired True North in 2001.

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Richard Linnett, Lisa Sanders and Laurel Wentz contributed to this report.

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