After a long struggle to win credibility as a global network, Euro RSCG Worldwide proved itself last week, trouncing larger rival JWT in the chase for the consolidated global $728 million Reckitt Benckiser account. It was the proud culmination of a five-month fight led by Worldwide CEO Mr. Jones, who first brought Reckitt to Euro.
The network's victory, capping months of steady improvements in key markets, is bitterly felt by the losing contender. Prevailing over Euro would have been a big vindication for CEO Bob Jeffrey, who has been toiling to revive the reputation of a 100-year-old agency that has not only lost some recent high-profile reviews, but also two top executives to none other than Euro. Though Reckitt was not key to the creative rebirth JWT is striving for, it was an important financial contributor to the London office, bringing in global revenue of about $21 million, according to an executive familiar with the matter.
"I've heard lots about [JWT's] attempts to be different, but haven't seen it borne out in the marketplace yet," said an agency executive.
For Mr. Jones, the 39-year-old Brit who assumed his post nearly a year ago, Reckitt clearly represents more than a big chunk of billings. "If you look at the market today, clients are largely choosing between small hotshops or big, global networks. We think we can do both," he said. "There's no better testament to an agency's ability to deliver than winning incremental business from an existing client."
The marketer pegged the business at $728 million, though it spends about $1 billion in media annually, and Euro is a "significant player in the utilization of that," said a spokesman for the marketer. It "really gives us a massive injection" of revenue and brands in major markets like New York and London, said Mr. Jones, where the account will be housed.
Reckitt, the $8 billion global marketer of products including Lysol, Veet and Electrosol, launched the creative review in March, after purchasing Boots Healthcare International. Invited were Reckitt incumbents Euro, which handled fabric care, dishwashing and home-care brands; and JWT, which handled brands in surface-care and health- and personal-care categories, as well as McCann Erickson Worldwide, roster agency for Boots. Reckitt initially said it would choose two of the three, but McCann pulled out due to a conflict with SJ Johnson.
"Our key motivation is to align and unify the way we go to market in our global branding," said Elio Leoni Sceti, exec VP-Europe, who led the review. In its first quarter, Reckitt's sales were up 18% over the same quarter last year to $2.1 billion, and would have risen 10%, excluding the Boots acquisition.
JWT's scale may have worked against it in the Reckitt review. The marketer's acquisition mode in the personal-care sector-it was an unsuccessful bidder for Pfizer's over-the-counter unit and in 2003 for Schick razors-could potentially present a conflict with the agency's current roster, which includes personal-care marketers such as the $200 million Kimberly-Clark account. In fact, now that Johnson & Johnson has agreed to purchase the Pfizer business, JWT is technically on a rival roster.
For JWT, the loss is a blow at a time when the agency is straining, so far with only marginal success, to transform itself from a top-heavy, account-management morass to a nimbler network-a move communicated symbolically by Mr. Jeffrey's truncating the J. Walter Thompson name into JWT. London, one of the key hubs handling the Reckitt business, has seen its fair share of turmoil in recent months, as its CEO Simon Bolton bolted and top executives Mark Cadman and Russ Lidstone decamped to Euro.
Though JWT has gained responsibilities for Unilever's $100 million Sunsilk launch in the U.K. and rollout in the U.S., in London it has not been able to draw some big-ticket reviews (British Airways, Unilever's Omo), both of which went to Bartle Bogle Hegarty. "London is a work in progress," said Mr. Jeffrey.
The Reckitt loss is a disappointment, concedes Mr. Jeffrey, 52, but he believes JWT is making strides toward reinvention, citing an improvement in creative and business performance. "There's a correlation over time between award-show performance, quality of work and new business," he said, noting that JWT won 35 Lions at Cannes this year, up from 17 in 2005 and five the year before, and "we're getting asked into more pitches than in the past."
Contributing: Matthew Creamer and Jack Neff
Time in post: 11 months
Take: Ambitious, highly competitive, energetic, entrepreneurial. Brought in new management at Euro in London, Latin America, Germany.
Time in post: Two+ years
Take: Entrepreneurial, has emphasized need to improve JWT's creative, mixed results. Changed agency name from J. Walter Thompson to JWT in 2005 as part of reinvention