The $147 million-a-year Army contract is the first major U.S. government ad account to include pay-for-performance bonuses for lead agency Bcom3 Group's Burnett and its partners, including Cartel Creativo, San Antonio, which handles Hispanic advertising, and Images USA, Atlanta, which handles African-American work. Under the contract, which Burnett won a year ago, the agency gets a set compensation, but can also earn bonuses based on how well it does in each of several areas, including increasing awareness, winning recruits and servicing the account.
The Army declined to say exactly how much of a bonus Burnett received, but said the agency got a "sizable" chunk of the maximum. The agency then apportions out the bonus to its partners.
"Contractors frequently do not receive the full, top-range amount of an incentive. High-performing, quality companies usually receive an amount near the top amount that range," said Army spokesman Paul Boyce. "Leo Burnett received a sizable portion of this incentive fee. It didn't receive every dollar of the incentive's estimated range of potential value, but this is not unusual with these sorts of contracts."
Noting that the Army contract has been renewed for a second year, Mr. Boyce said, "Our partners at Leo Burnett completed an outstanding year of professional achievements." The goal was 75,800 new recruits for the active-duty Army by Sept. 30; the Army met its goal by Sept. 1.
Ray DeThorne, executive VP-account director at Burnett on the Army account, said the agency hadn't yet seen the breakout of the bonus but was hoping to improve this year.
Army officials said Burnett's "Army of One" creative, together with the shop's integrated Internet strategy, was part of a team effort that boosted recruitment. The unconventional "Army of One" campaign in January replaced the "Be all you can be" ad theme from WPP Group's Y&R Advertising. The Army said it noted a rise in recruitment during the 12 weeks of ads that follow recruits during basic training and refer viewers to a Web site that features longer segments on the recruits' training.
"The notion of the shift of the advertising campaign [was] something that got a great deal of attention and a lot of people weren't quite sure that we crazy people were headed in the right direction," said Army Secretary Thomas E. White. "The proof is in the pudding. It is working."
In giving credit to Burnett, Army officials downplayed the effect of the economy on recruitment. Army officials said that while high unemployment does boost recruitment, normally it takes a year before a half-point rise in unemployment is reflected in recruiting.