|Y&R is out at Burger King.
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BURGER KING'S MARKETING CHIEF TO RETIRE
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BURGER KING GETS NEW CEO
Texas Pacific Group Moves Quickly After Chain's Acquisition
DIAGEO FINALLY SELLS BURGER KING
Drops Sale Price From $2.6 Billion to $1.5 Billion
"Y&R will no longer have a role with us," said Russ Klein, Burger King's chief marketing officer. "Other partners in place, of which a number are WPP [Group] companies, are all relationships we hope will go forward."
A Y&R spokeswoman said, "Burger King has decided it needs to change direction. We wish them the best going forward and will continue to help them on our other assignments." Y&R is a WPP Group agency.
'Sense of urgency'
"We have a real strong sense of urgency in building the brand momentum to drive traffic and stay connected to our core consumers," Mr. Blum said. "This is purely a business decision and for us to focus on getting results for our franchisees and to build the brand through truly great advertising."
"That is resulting in our separation with Y&R as it relates to agency of record for general marketing, field marketing and media planning," Mr. Klein said.
Mr. Blum cited Crispin's success on traditional and nontraditional campaigns for BMW's Mini, Molson beer and Ikea as examples of the agency's ability to build brands. He said Crispin Porter's president-CEO, Jeff Hicks, will lead the account while Alex Bogusky, executive creative director, will handle creative development.
Deadline for turnaround
Mr. Blum, now in his 13th month as CEO, is rapidly approaching an 18-month deadline to achieve a turnaround. He said the board gave him "unqualified approval" to make the agency switch, but said nothing was discussed about extensions or changes in timing. "We are in this for the long term and we are very results-oriented," Mr. Blum said.
Crispin Porter becomes the fifth agency for Burger King in just four years. Y&R won the account in April 2003 from independent Amoeba, following a review that began with Mr. Blum's appointment. Amoeba was hired in October 2001 by former Chief Global Marketing Officer Chris Clouser, who had pulled the business from Interpublic Group of Cos.' McCann-Erickson Worldwide. McCann won the account January 2001 following a blockbuster review after Burger King fired Interpublic sibling Lowe & Partners in September 2000 after seven years of service.
Burger King shifted the account to crosstown Miami neighbor Crispin, 49% owned by MDC Partners, without a review or its having done any project work for the fast-food giant.
Crispin's capitalized billings were $255 million last year. Burger King, meanwhile, spent $80 million more than that -- $335 million -- in measured media, according to TNS Media Intelligence/CMR. Burger King executives said the marketing budget was expected to remain the same as the chain refocuses on its core customer, the burger lover.
Regarding the chain's marketing shift, Mr. Blum said, "People [who] love burgers are the very core of our business and being Burger King we intend to live up to that promise. ... There are those [consumers] that seek variety beyond burgers, and we are working to fill that out and have a strong and appropriate array of product."
Pop culture connections
"Anybody who's watched the pop culture connection [Crispin has] made on behalf of [its] current clients ... would certainly be impressed on how they've been able to do great ground-up brand building and a great connection with the marketplace," Mr. Blum said about his chain's new agency. "They'll be involved on our business on a 24/7 basis."
Miles Nadal, chairman-CEO of Toronto-based MDC Partners, said: "This is the biggest transitional event to happen in advertising in the last two years. Major marketers are not prepared to accept institutional mediocrity. This signifies entrepreneurial firms are the growth engine of the future. This signals that MDC's formula is the formula of the future."
"We are very confident about [Crispin's] depth of resources and [the agency will] be obtaining additional resources," he said, adding that Crispin Porter was well-equipped to handle an account the size of Burger King's without merging with another agency.
MDC in acquisition mode
Mr. Nadal said the industry could expect to hear a lot more from the company in future weeks. MDC Partners has reportedly been talking about acquiring stakes in other independent ad firms, notably Kirshenbaum Bond & Partners, New York.
Mr. Klein said Burger King hopes to continue its relationships with its other WPP agencies: media agency MindShare, multicultural shop UniWorld, Equity, Landor & Associates, Premium Surge, VML and Wunderman. Other agencies on the roster include Publicis Groupe's Bromley Communications for multicultural and youth agency Campbell Mithun, part of Interpublic Group of Cos.
Burger King and its board had kept its decision to switch agencies to an exclusive inner circle, away from employees and franchisees, despite rumors that management was mulling some kind of drastic shift.
"I was hoping ... that somebody would get fired," said one longtime franchisee close to the situation. "It shouldn't have been the agency. It should have been Brad Blum. It's a continual issue with [the company] that it's always the agency's fault and 99% of the time it's the fault of the brand's leadership."
"We've been trying to have this CEO explain the strategy for this brand and it's about as clear as mud to us," the franchisee said.
Linda Fox, franchisee with two restaurants in Overland Park and Lenexa, Kan., and president of the Burger King's mid-America franchisee association representing 450 restaurants, urged for patience with this regime, despite its flagging sales.
"You don't have something that struggles for six years or 10 years and then have it fixed in 12 months," she said. "I think these guys have done a remarkable job of filling the pipeline with new products, focusing on operations and training and getting things right. You do not change the restaurant or perceptions of the guest in 12 months."
Another franchisee, who learned of the news from Adage.com, also took a more optimistic viewpoint. "What I want is something that will turn our sales around, if it's marketing, if it's advertising, new products or operations. All of those things have to click for things to happen."
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Claire Atkinson, Hillary Chura and Lisa Sanders contributed to this report.