Fallon chief promises stronger growth track

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Fallon Worldwide is experiencing some growing pains.

After 12 months marked by layoffs, management defections and the loss of clients including BMW of North America, the agency got a much-needed boost last month by winning a spot on Sony's agency roster. The Sony assignment-it's already working on Sony's personal audio products, including Walkman and the online music service Connect-is a good start.

But the challenge confronting a management team that includes a relatively new top creative and chief marketing officer, and is led by the famously stubborn, determined and resilient chairman Pat Fallon, is to rack up some more wins.

"We just haven't achieved [growth] in the last three years like we wanted to, frankly," Mr. Fallon said. "A lot of agencies, including Fallon, have not gotten their footing back since 9/11. "

Fallon, whose client list includes Citibank, Nestle Purina, United Airlines and Lee Jeans, posted revenue of $70.5 million in the U.S. last year, down 5% from two years prior, according to Advertising Age estimates.

Mr. Fallon is confident good things are around the corner-"our phone is ringing like crazy and we have a lot of new business in the pipeline"-and expects to increase revenue despite the BMW loss.

But Fallon hasn't won, and kept, a big client since picking up Citibank five years ago. Subway fired Fallon last year after hiring the shop in 2003.

The Subway loss, and Fallon's inability to reel in new business, led to layoffs last year. Client losses continued into this year as Dyson went into review and Fallon resigned BMW after the auto marketer put the account into review. The agency's biggest U.S. new-business win this year-prior to Sony-was Kitchen Aid.

SERIES OF DEPARTURES

To keep winning, Fallon needs to overcome a series of executive and creative departures during the past 24 months. Top creative and heir apparent David Lubars, who bolted last year to take the creative reins at Omnicom Group's BBDO, New York, was the most high-profile departure. Chief marketing officer and rainmaker Mark Goldstein also left, ultimately following Mr. Lubars. The agency has also lost a string of group creative directors since January 2004.

Rob Buchner, point person on branded entertainment and one-time head of the interactive group, was promoted to CMO after Mr. Goldstein's exit. Fallon hired Paul Silburn, deputy creative director of Omnicom's TBWA, as its new top creative.

Mr. Fallon said the agency has depth to deal with departures. "Some of the turnover is good, some of it is challenging, some of it is not wanted, but at the end of the day it's part of our business to manage change."

Fallon is still on many search-consultant shortlists. "It's one of the agencies you need to consider ... particularly when the client is looking for very strong creative," said consultant Jane Bedford.

Fallon's bench strength is to push marketing into new directions-BMW Films is Exhibit A, which was followed by an online-film effort for Amazon last year. That will be tested this year under the new team.

But a big driver will be the agency's steel-willed chairman. "Pat is as tough as they come," Mr. Goldstein said.

Mr. Fallon put it a little more colorfully: "Anybody thinks that I've been kicked in the nuts and am taking a standing 10 count, I ain't doing it."

Ups and downs

* Fallon’s client list includes Citibank, Lee Jeans and United Airlines

* The agency has just won a place on Sony’s roster and has picked up business from Kitchen Aid

* The agency hasn’t won--and kept--a big client since winning Citibank in 2000

* The loss of Subway last year led to layoffs

* Fallon has lost a number of top executives and creatives in the last 24 months

* Despite the travails, Fallon is still a top pick among search consultants because of its creative strength

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