Burger King Corp. tapped DraftWorldwide, Chicago, as its global promotional and merchandising agency, completing a sweep by Interpublic Group of Cos. for the fast-feeder's marketing business.
Earlier this month, Burger King named McCann-Erickson Worldwide, New York, its adult marketing agency and Campbell Mithun, Minneapolis, its kids marketing agency. Lowe Lintas & Partners, New York, had been the incumbent on those pieces of business.
Draft beat incumbent Alcone Marketing Group, Irvine, Calif., in a shootout after a protracted review where seven semi-finalists were selected to present in late September and the two finalists were named in December. In addition to the promotional business Alcone had also handled marketing services, calendar planning and point-of-sale work which will now be handled by Draft. Industry observers estimate that the account exceeded $150 million. Burger King executives were unavailable for comment.
"I want to emphasize how fabulous it is for Burger King and for Draft Worldwide to be working with a single promotions resource on a worldwide basis," said Lee Hill, president of DraftWorldwide, Chicago. "That's a very big deal for us and them. They were interested in an infrastructure that could accommodate a substantial workload," he added, noting that Draft has offices in 27 countries.
Alcone and Equity Marketing, Los Angeles, will retain their status as global premium manufacturing agencies where each program is pitched and awarded on a project-by-project basis.
Matt Alcone, chairman and CEO of Alcone Marketing was philosophical about the loss, saying he was honored to have served Burger King and proud of his agency's achievements in kids marketing and new product launches over the past 15 years. "During that time we were able to successfully work with five different CEOs, 10 different VPs of marketing and a dozen different people in the promotion marketing area," he said. "We understand that the current marketing staff is facing severe challenges with their business and they have to make those decisions which will drive it forward."
The loss will force Alcone to lay off some staff, said Mr. Alcone. About 40 to 50 staff in Irvine worked on the promotion business and another 40 work on the premium business, he added. Mr. Alcone estimated about half promotion staff will be moved to other divisions in the company. "The vast majority of our revenue from Burger King relates to its premiums, which have been left intact." He said the other services had smaller revenue and margins so the impact to agency profits wouldn't be proportional to agency layoffs.
Copyright January 2001, Crain Communications Inc.