Divx nixes adviser's naming of ad agency

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Arnold Communications briefly landed the estimated $50 million Digital Video Express business last week, but hours later the account was again in question after a company statement contradicted a review consultant's notification of agencies.

On Oct. 22, New York agencies Bozell, Kirshenbaum Bond & Partners and Angotti, Thomas, Hedge received faxes from consultancy S. Liebmann & Associates saying they had lost the pitch and that Arnold's McLean, Va., agency had won.


A day later, however, the head of the client review board denied any decision had been made. And Richard Sharp, chairman of parent Circuit City Stores, said through a spokeswoman that not only was a decision not made but he didn't have a timetable for one.

The spokeswoman added: "At this point, there is no other word."

Arnold declined to comment, though executives close to the review said the agency had landed the launch of the digital home-video system. Digital Video Express, commonly known as Divx, is being introduced by a joint venture formed by Circuit City and a Los Angeles law firm.


Some agencies contacted about the review pointed out complications involving the review process and the consultant, Steve Liebmann. One agency executive claimed to be uncomfortable with Mr. Liebmann because he was unfamiliar with him. The agency executive also said he didn't get a clear direction as to the agency qualities being sought.

"This is why we need consultant guidelines," the agency executive said, referring to recently drafted guidelines by the American Association of Advertising Agencies.


Another executive close to the review said Mr. Liebmann solicited separate business from at least one of the agencies contacted about the Divx review.

Mr. Liebmann did not return phone calls for comment.

A confidential memo to Mr. Sharp from Mr. Liebmann detailing the agency presentation schedule--including which shops were pitching and when--was faxed anonymously to Advertising Age and other publications earlier this month.

Peter Hanley, president of Arnold's McLean office, would not confirm his agency had won the account, but offered the comment that "We can position [Divx] so people can understand the benefits of this technology."

The Divx product is an alternative to rental movies or pay-per-view TV, allowing consumers to watch movies on disc without having to return them to a rental store.


Mr. Hanley said the main benefits of this new technology are that the discs don't have to be returned to stores; the high-quality resolution; and the availability of an expansive range of movie titles.

Arnold seemed to have won in a quick review period; it lasted little more than a month. The agencies presented Oct. 20 and received faxes from Mr. Liebmann's consultancy two days later.

A campaign is expected to be launched next spring, apparently nationally. Executives close to the company said Circuit City currently is moving Divx in test markets.

"There are a lot of people out there waiting for this product," said Arnold's Mr. Hanley.

Contributing: Mercedes M. Cardona.

Copyright October 1997, Crain Communications Inc.

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