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BRUISED BURNETT SAYS LOSS IS FRUSTRATING FISCAL IMPACT ESTIMATED TO BE SMALL

By Published on .

Though it has been knocked from United Airlines' friendly skies after more than three decades, the damage to Leo Burnett Co. is more psychological than financial.

President-USA Linda Wolf said the Chicago agency is "real disappointed" by the loss, but though "it's an important account to us, it's not even one of our top 10 in the U.S. It's more of an emotional frustration than anything else, because we're proud of our work."

$18 MIL IN ESTIMATED REVENUE

Assuming a generous 15% commission, Burnett's revenue from the $120 million United account equals $18 million-about 2% of the agency's reported '95 revenue.

And new-business gains in 1996 will offset lost revenue from United, Ms. Wolf said.

Those gains include accounts from Walt Disney Co.'s Disneyland and Disney Cruise Line; Amoco Corp.; the New York Stock Exchange; and Coca-Cola Co.'s Minute Maid, as well as international assignments from new and existing clients.

Still, the loss follows some other recent stings.

Earlier this year, Burnett was passed over by McDonald's Corp. for the $75 million launch of its new Arch Deluxe sandwich line, awarded to Fallon McElligott, Minneapolis. It was Fallon that helped deliver last week's blow as well, when it split the United account with Young & Rubicam, New York.

Then a few months ago, news broke that a Burnett mistake had led to a $20 million shortfall in McDonald's media plan. McDonald's stood by the agency but termed the mistake "inexcusable."

Burnett also has faced problems on its Oldsmobile and Reebok accounts. Both brands have been struggling in the marketplace, despite new ad campaigns from the agency. And Reebok's U.K. agency Lowe Group has been talking with the company about a U.S. project.

However, Reebok executives said they are excited about a new Burnett campaign in development, and General Motors Corp.'s Oldsmobile division appears to be staying put for now.

The United loss hurts most because it is the kind of account the agency prides itself on having, one with a leadership position in its industry that has been on Burnett's roster for 31 years and for which the agency has done respected work. Many of the agency's biggest clients, including Procter & Gamble Co., Philip Morris Cos. and Kellogg Co., have been on the roster even longer.

BIGGEST U.S. AGENCY

Burnett was the largest U.S. agency brand in '95, according to figures reported in Advertising Age: a 15.1% increase in revenue to $371 million. Worldwide revenue jumped 18.7% to $804 million.

Ms. Wolf noted that Burnett's privately held status affords it flexibility many other agencies don't have. She conceded layoffs are possible, but hopes to move most, if not all, of Burnett's 20 full-time United staffers to other accounts.

Burnett's grip on Oldsmobile seems to have solidified, at least through the auto marketer's centennial celebration next August.

`IT WON'T HAPPEN'

"If [a review] didn't happen by now, it won't happen," said one GM insider. "Burnett has really stepped up their profile and made a lot of changes. The ball is sort of in our court to get the job done."

Olds is preparing three major vehicle launches for the next six months in addition to its centennial celebration. Insiders said a review before then isn't an option. Burnett recently reshuffled its Olds creative team.

Burnett has handled Olds since 1967, and survived a review called by Olds VP-General Manager John Rock in 1992. Mr. Rock said last week he will retire at yearend; his successor is Darwin Clark, currently VP-sales, marketing and aftersales for GM Europe.

Known for stability on its client list and work force, Burnett has had tough years in the past. But despite losing United, Ms. Wolf insists 1996 won't be one of them.

"This will absolutely be a good year for us," she said.

Besides the new business wins, she cited strong business results for clients ranging from Rockport shoes to Pillsbury Co.'s Old El Paso brand to Miller Brewing Co.'s Miller Lite.M

Contributing: Jean Halliday.

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