At week's end, officials at McCann-Erickson Worldwide's offices in New York were toasting one another after snagging the $150 million Sprint assignment from J. Walter Thompson USA.
OFFSETTING BAD NEWS
Just blocks away, at JWT's headquarters, executives were trying to offset the bad with some good. After all, the week wasn't a total wash: The agency picked up Nabisco's $20 million cracker account, from McCann.
Sprint officials delivered the larger blow to JWT Chairman-CEO Chris Jones, who fired off a "good news/bad news" e-mail to the agency's staff.
Yet, while the Nabisco win was good news for JWT's staffers on the East Coast, it didn't help much for JWT's San Francisco employees, who handled the bulk of the Sprint business.
The long-distance company's account was the foundation of that office, which reported billings of $305 million in 1997.
The loss took San Francisco executives by surprise.
"People had been saying we were going to lose this account for 15 years," so JWT employees had grown to ignore them, one JWT executive said.
"From a rank-and-file point of view, nobody had any idea," he added. "It's a terrible blow."
A JWT spokeswoman confirmed there will be layoffs among the 50 Sprint staffers in the 200-person office, which will remain open. JWT will continue to handle broadcast media buying for Sprint.
NEW AD STRATEGY
Sprint's agency shift is part of a new ad strategy to change its image from just a long-distance company to a total-package communications provider.
"It's not that we couldn't have done that with JWT, but we really think with McCann's past experience, specifically AT&T [Corp.], they have a really unique handle on the industry and overall work," a Sprint spokesman said.
Rumors of troubles on the account had been heating up in recent months (AA, June 8). JWT responded by beefing up the staff on the account. But changes in Sprint's management and the end of its relationship with spokeswoman Candice Bergen left the agency vulnerable, according to JWT executives.
The end of Ms. Bergen's contract marked a break in the ongoing campaign, and JWT had been developing a new concept to replace her when Sprint moved the business, according to a JWT spokeswoman.
JWT's last work for Sprint breaks this week for a new service called Short Calls Free, which allows customers to make calls that are 30 seconds or less at no charge. McCann also worked on the campaign, creating an NFL-theme spot that will air in rotation with three JWT spots.
Sprint gave McCann the NFL assignment in late August.
SPRINT WORKED WITH DRAFT
Sprint executives became familiar with McCann through its sister direct-marketing shop, Draft Worldwide, also owned by Interpublic Group of Cos. But with the shift, Draft will lose its acquisition-targeted direct marketing to McCann Relationship Marketing, New York. Draft, however, retains the work directed to existing Sprint customers.
For JWT, it is the second time this month a large client pulled up stakes. The agency lost Dell Computer Corp.'s $100 million account on Sept. 10.
Nabisco at least partly offsets that loss. The shift of its cracker business from McCann was chalked up to three factors: the lack of a solid ad campaign from McCann; enduring relationships between JWT and Nabisco management, who were formerly executives of client Kraft Foods; and a revolving door on the executive suite at Nabisco.
"All the parties deserve some responsibility," said an executive familiar with Nabisco. "The creative wasn't what it was needed to be," he said, adding that "it was exacerbated by turnover on the senior management levels. There was no time for the agency to build their trust."
It's clear, however, that close relationships between Kraft and JWT played a role in the shift.
"It's a case where our work for Kraft has been recognized," said Brian Heffernan, president of JWT's Chicago office, which will be handling the majority of the Nabisco work with an assist from the New York office.
Among the brands moving are Triscuit, Ritz, Air Crisps and Wheat Thins.
The handwriting may have been on the wall since May, when the launch of Sweet Crispers, a cookie/cracker hybrid, went to Foote, Cone & Belding, New York, rather than McCann.
Although Nabisco still holds nearly half the $2.8 billion cracker market, with a 46.7% share, its overall sales declined 1% to $1.3 billion, according to Information Resources Inc. for the 52 weeks ended May 24 while rival Keebler Co.'s rose.
Keebler's sales were $435.7 million, up 5.4%, while its Sunshine brand posted sales of $250.6 million, up 14%.
Nabisco's crackers had been at McCann for 12 years, and JWT's San Francisco office had the Sprint account for at least 16 years.
A-1 MOVES TO FCB
Also last week, Nabisco moved out of McCann its $8 million A-1 Steak Sauce account, which went to the marketer's cookie agency, FCB, New York. McCann had won the business only last year from Lowe & Partners/SMS, New York.
In addition to JWT, the move of the Sprint business to New York was a blow to the San Francisco and West Coast ad communities, which have seen ad spending draining away from a number of high-profile clients.
Interestingly, Sprint is located in neither area, headquartered in Kansas City, Mo.
Contributing: Judann Pollack, Alice Z. Cuneo.