The most recent example is the Citibank review in which Young & Rubicam walked away with at least $500 million-and upwards of $800 million-in global business (AA, August 11). Citibank was the fourth major piece of business to move in such a way this year.
One industry executive said such "unexpected left hooks" from marketers are eroding the trust between them and the agencies, as well as reducing shops to commodity vendors rather than partners in brand-building.
SPEC CREATIVE BACKLASH?
Other agency executives are going further, predicting agencies' resistance to doing speculative creative work could grow if more shops get burned-as the three incumbent Citibank agencies were by spending on spec and then seeing a shop nab the account without it.
In addition, marketers are free to implement the ideas presented by the losing agencies.
Creative presentations are "a beauty contest between agencies in a very artificial environment," said Andy Berlin, chairman of Fallon McElligott Berlin, New York.
Still, a backlash against spec creative is unlikely, he said, since it's the main selling point for smaller, younger agencies that don't have a slate of global capabilities that can be easily presented to a client, as Y&R has.
"The best decisions are made by people who know what they're looking for and are decisive. They don't need spec creative," Mr. Berlin said.
OTHER SURPRISE MOVES
Y&R only emerged as a Citibank contender last June, six weeks before the incumbents made final presentations, and was said to have been negotiating compensation agreements while the incumbents were making final creative presentations.
In other recent surprises, GTE Corp., Taco Bell Corp. and Apple Computer-representing $370 million in total billings-landed at agencies that entered the picture late in the game.
In the Citibank case, as in the Apple review, long-term relationships played a big part in the decisions. Y&R Inc. Chairman-CEO Peter Georgescu had kept in touch with Citibank's brass over the last 18 months, even as Y&R refused to participate in the review-which originally was for a $150 million global campaign.
Although such course corrections have happened before, they are becoming more common and are coming now from large, marketing-savvy companies, according to industry insiders.
The president of an agency that lost out to an 11th-hour rival referred to a "new brutality" in agency/client relationships, where the relationship-based rules of doing business are being dropped in favor of treating agencies as interchangeable commodities.
Among marketers, the game is all about shareholder value and boosting share price in the short run, said this agency head. Creating a relationship with an agency can be irrelevant for the client's top executives, who may be out of a job as quickly as the company's stock drops, he said.
The criteria in reviews are changing and the selection process is more complex, said Mr. Georgescu in defense of the Citibank situation.
"It's an issue of being able to move up the food chain, and getting at a marketing strategy and a business strategy-and all those things impact the brand," he said. "Those things weren't around 10 years ago. It was a simpler, gentler world."
The environment is "brutally competitive," he noted, and the client now "pokes with greater care."
In landing the account, Y&R sent its KeyCorp account to sister shop Lord Group, and top management at that bank said it's not conducting a review. Instead, agency executives said, KeyCorp marketing executives are contacting new agencies informally.
One agency head said the move by Y&R was a blow to the egos of KeyCorp's top marketers. The large regional institution has national aspirations, so it will more likely replace Lord with a national full-service agency on a par with Y&R.