And more fallout is likely following P&G's stunning move last week to cut Wells from its agency roster. In particular, industry observers wonder how much longer Wells CEO Frank Assumma will remain in charge of the shop.
Rival agencies are also said to be circling other Wells accounts. Marketing executives at Wells client Hertz Rent A Car got five copies last week of a newspaper article about P&G's termination of Wells from other agencies.
The agency's other key clients include Toys "R" Us, Chase Manhattan Bank and Georgia Pacific Co.
Michael Greenlees, CEO of Wells' London-based parent, GGT Group, last week declined to discuss Mr. Assumma's future or specific steps Wells will take going forward, saying only, "We are reviewing at the group level the New York operation to ensure it has the support it needs."
Mr. Assumma would not comment.
APPROACHED BY TEAM
An executive at a rival agency group said one of his shops was recently approached by members of Wells' Heineken account team who hoped to move the business to another agency.
Michael Silver, who oversees the Heineken account as exec VP-managing partner at Wells, denied the account team has had any such discussions with other agencies.
A Heineken spokesman said only that the marketer is monitoring the situation at Wells, battered in recent months by management turnover and account turmoil.
P&G withdrew its U.S. assignments from Wells last week after the team overseeing that account resigned. Effective Feb. 19, P&G will split the business, representing nearly one-third of the agency's billings, among three other roster shops: Oil of Olay goes to Saatchi & Saatchi Worldwide, New York; Pringles chips to Grey Advertising, New York; and Gain detergent to Leo Burnett Co., Chicago. Burnett had handled Era detergent, which will now shift to Jordan, McGrath, Case & Taylor, New York.
State Lawrence, one of the three managing partners who oversaw the P&G account at Wells, last week joined Grey as exec VP-global account director on Pringles. The other two executives, Beverly Okada and Keith Bunnell, met with Saatchi CEO Kevin Roberts last week.
A Saatchi spokesman said there would be an announcement regarding Oil of Olay staffing at a later date.
PROMPTED BY FORMAN'S EXIT
The trio's departure was precipitated by the earlier resignation of Wells President Paula Forman, who had clashed with Mr. Assumma (AA, Dec. 5, et seq). Her exit followed that of Executive Creative Director Linda Kaplan Thayer last summer.
Exec VP-Planning Director Douglas Atkin also followed Ms. Forman out the door, joining Merkley Newman Harty as partner and strategic planning director.
SURPRISE FROM P&G
P&G surprised the industry not only by moving the business, but by publicly stating the reasons for the shift rather than citing vague industry terms like "creative differences."
Bob Wehling, P&G's senior VP-advertising, market research and government relations, said the departure of the account team last week was the last straw. P&G was already unhappy about Ms. Forman's departure, and Mr. Greenlees had met with the marketer in recent weeks to try to smooth things over.
"We value long-term relationships, but you have to have relationships with human beings," said Mr. Wehling. "We didn't have a critical mass of senior people anymore to sustain those relationships and to provide our brands with badly needed continuity."
"I do know that we valued them highly and I certainly hope that they land on their feet," he added, referring to the executives who left Wells.
Mr. Assumma joined Wells in 1995 from Bates USA, succeeding Kenneth Olshan, who had been P&G's main contact at Wells (and who this month joins Saatchi's board).
P&G was the largest client at Wells BDDP, representing 6% of annual revenues for GGT and an estimated 40% of Wells' revenues. With the loss of its P&G accounts as well as its P&G media assignments last year, Wells' New York billings are estimated by those close to the agency at $283 million.
Mr. Assumma said Wells will aggressively pursue new business to replace the lost P&G billings.
GGT said the P&G loss will force down operating profits for the next fiscal year, ending April 30, 1999. As a result of the loss, GGT is anticipating a charge of $4.9 million related to the loss.
Neither Mr. Greenlees nor Mr. Assumma would comment on layoffs related to the P&G move.
Contributing: Pat Sloan, Jack Neff, James B. Arndorfer.