IKEA, CARMICHAEL LYNCH WRANGLE OVER MONEY

Canned After 10 Months, Agency Defends Work

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SAN FRANCISCO (AdAge.com) -- Compensation issues between Ikea and incumbent advertising agency Carmichael Lynch, Minneapolis, will be resolved as the two part company, the Swedish retailer said.

Ikea last week put its estimated $40 million to $50 million account into review after less than one year with the agency.

'Compensation issues'
John Colasanti, president of the Interpublic Group of Cos.' shop, in discussing the review with AdAge.com, said there had been "compensation issues" with Ikea.

"We had never come up with a fair compensation," Mr. Colasanti had told AdAge.com. "It isn't about the size or the account, it's about the integrity of our relationship."

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The agency declined to defend the account. "Results have far exceeded expectations in a soft retail climate right now," he said. "We stand by what we've done."

'De-engineer the relationship'
Christian Mathieu, external marketing manager for Ikea, told AdAge.com he expected to "resolve the fee agreement" as the retailer and agency "de-engineer the relationship."

Mr. Mathieu added that, going forward, his "objective is to foucs on work rather than focus on the compensation."

A decision on the review is expected in March. Pile & Co., Boston, is the consultant.

Ikea's U.S. headquarters is in Plymouth Meeting, Pa.

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