Draft Dealt Staggering Blow After Strutting Like a Champ

Agency CEO Turns From Hero to Wal-Mart Account Disaster Management Overnight

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NEW YORK (AdAge.com) -- Howard Draft last week went from hero to goat in the time it takes an Aston Martin engine to turn over -- or not turn over, as the case may be.

As his agency's win of the Wal-Mart account collapsed around the ouster of Julie Roehm, DraftFCB CEO Howard Draft went from triumphant hero to disaster management overnight.

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Newly merged
On Monday, the newly merged DraftFCB was being touted as the savior of Interpublic Group of Cos. It had snapped up the juiciest account up for grabs in 2006 and looked all set to deliver on the promise of a marriage between creative and direct.

In fact, Advertising Age had decided that DraftFCB, thanks to the boldness of its model and the Wal-Mart new-business coup, was going to be this publication's Agency of the Year, a decision that would have been officially announced in our Jan. 8 issue.

Major embarrassment
Now, all that has changed. The agency's falling out with Wal-Mart in one of the most bizarre stories to ever shake Madison Avenue has clouded what seemed an almost-too-good-to-be-true start to its existence. For everyone from Mr. Draft, the chairman-CEO, to the lowest of the rank and file, the retailer's decision to fire the agency just weeks after appointing it is a major embarrassment it will have to shake off quickly.

"I view the Wal-Mart situation as a one-off, specific to that client," said David Beals, president-CEO of Jones Lundin Beals, a Chicago-based agency consultancy. "The bigger litmus test will be sustaining and growing their current client base."

Planned to hire 100 staffers
Mr. Draft had planned a new-business moratorium for next year so the agency could absorb the massive account. That likely will be scuttled, as will plans to hire more than 100 staffers. High on the list of priorities will be recruiting a new-business chief following the departure of Tony Weisman, chief growth officer at Draft, Chicago.

New-business consultants agree losing Wal-Mart doesn't necessarily mean dark days ahead for DraftFCB.

"I have no reason not to look at them as a viable contender when doing an agency search," consultant Hasan Ramusevic said. Another consultant said: "It's basically a simple business. You win some, lose some."

Interpublic's image
Losing Wal-Mart is also no help to Interpublic. Analysts estimated Wal-Mart would kick in about $20 million a year in revenue, or just 0.3% of Interpublic's projected 2007 revenue of $6.5 billion. But the loss is far more troubling from an image perspective, especially for Chairman-CEO Michael Roth, who trumpeted the win "as a validation of our strategy."

A DraftFCB spokesman declined to comment.

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Bradley Johnson, Jack Neff and Matthew Creamer contributed to this report.
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