Delta sets up $45 million shoot-out

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Delta Air Lines is setting the stage for a shoot-out between incumbent Saatchi & Saatchi, TBWA Worldwide and Leo Burnett Co. for its $45 million global advertising account.

The agencies are scheduled to pitch the business in late August, said one executive close to the situation. A decision could come by early September.

"In the normal course of business, we talk with different vendors and suppliers," said a Delta spokesman. "Saatchi & Saatchi [New York] is our agency of record and they are working on our campaign."

TBWA and Burnett both declined comment.

Saatchi North American Chairman-CEO Jennifer Laing said Delta's re-evaluation was expected in the wake of recent management changes at the airline.

"We're taking this as a matter of good business practice," she said. "We feel comfortable that we'll continue to work in partnership with this client."


In late May, when rumors of trouble on the account first surfaced, Delta sent a memo to Saatchi that one executive said basically delivered the message, "Don't panic. Things are going well."

Delta has seen turnover throughout its executive ranks during the past two years. The three executives instrumental in the 1997 selection of Saatchi--CEO Ronald Allen, Exec VP Robert Coggins and VP-Consumer Marketing Gayle Bock--all have left the company. President-CEO Leo Mullins, Exec-VP Chief Operating Officer Frederick Reid and VP-Consumer Marketing Martin White are now the key marketing decisionmakers.

The new management team has apparently not been satisfied with Saatchi's creative. During the spring, Delta nixed Saatchi's "On top of the world" tagline for a branding campaign.

Saatchi is to break new Business Elite ads for the airline this fall; a new branding campaign will come later.

Saatchi also has experienced some management turbulence on the account. Delta Worldwide Account Director Michael Keeshan took a sabbatical last summer and was replaced by Cathy Constable. She left the agency business and was succeeded by Tim Eldridge, who currently runs the account.


Delta's ad spending has been on the decline. When Saatchi first won the business, it was billed as a $100 million account. But Delta spent just $45 million last year, according to Competitive Media Reporting.

It was unclear whether the review would affect media buying, now handled by Zenith Media, New York.

Separately last week, Delta awarded its relationship-marketing activities to Bronnercom, Boston. It won the consolidated business from incumbents Lacek Group, Minneapolis, and Rapp Collins Worldwide, New York.

As for airline experience, Burnett handled United Airlines for 32 years until it lost the account in 1997. TBWA was a finalist in that United review.

Earlier this month, Scandinavian Airlines System awarded its estimated $13 million account to Burnett's Stockholm office. Burnett declined comment on whether that would pose a conflict with Delta, but an SAS executive said it would not.

There was also speculation last week that J. Walter Thompson USA, New York, was trying to edge into the Delta competition. JWT Chairman Charlotte Beers is close to Delta board member Ed Artzt. Mr. Artzt is a member of the board of several clients of Ogilvy & Mather Worldwide (where Ms. Beers was previously chairman), including American Express Co. and GTE Corp. But one executive involved with the Delta pitch said no other agencies will participate.

Contributing: Hillary Chura, David Goetzl, Carol Krol, Beth Snyder

Copyright July 1999, Crain Communications Inc.

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