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LAUDER TURNS FACE AWAY FROM AC&R REVIEW ON FOR $60M ACCOUNT

By Published on .

NEW YORK-Since becoming president-CEO of Estee Lauder USA four years ago, Robin Burns has often told friends she wanted a shot at a new agency.

Last week, she got it when AC&R Chairman Alvin Chereskin, a longtime friend of Estee Lauder Inc. President Leonard Lauder, announced his retirement (AA, May 2). In a nanosecond, Estee Lauder followed with an announcement of its own: After 28years at AC&R, the $60 million Lauder brand was in review.

The news sent Madison Avenue scrambling, even though Lauder has a parsimonious reputation when it comes to agency compensation.

One executive with close ties to the account said AC&R's annual fee is "$6 million maximum."

Said another: "The account is one constant headache because Leonard Lauder is such a tightwad. Anybody who looks at it should do so carefully."

Still, agencies are salivating.

The winner will have a chance to craft a more modern image for Lauder, now negotiating for a spokesmodel to replace Paulina Porizkova. The latest contender is actress Uma Thurman, whom Lauder hopes to have a thumbs up from this week. The company wouldn't comment.

The agency will also be responsible for all global creative, including an expanded TV role. Currently, nearly all Lauder TV advertising is co-op and placed by retailers, while print is placed by AC&R. Losing Lauder will cost AC&R at least half its billings.

For all the Lauder brand's success-its cosmetics, skincare and fragrance collection leads in department stores with a 19%-plus share, according to consultancy Mottus & Associates-the account has yet to get a grip on TV.

"They [Lauder] are masters of the captive print look but not TV. The chemistry with AC&R has not worked for TV," said Allan Mottus. "They need to increase the TV portion of their budget, and they'll have to do so by taking money out of premiums."

Kirshenbaum & Bond, now working on a project for Lauder's Aramis subsidiary, and Hal Riney & Partners, San Francisco, responsible for a Clinique creative project, are some of the smaller independent shops with existing ties to the $2.6 billion cosmetics giant.

At least one agency executive believes that if a shop doesn't have a project, it doesn't have a prayer. Another executive thinks last year's Aramis review was merely a stalking horse for this larger review and any agencies from that will be considered.

Also said to be jostling for the account are Lowe & Partners/SMS; Deutsch, a contender in 1993's aborted Aramis review when the agency was still Deutsch/Dworin-and N W Ayer, where Steve Dworin is now chairman.

AC&R will be included, but the mood there is said to be one of grim reality. Even so, AC&R is pitching with help from Backer Spielvogel Bates, whose chairman is Leonard Lauder pal Carl Spielvogel. A potential conflict looms since BSB handles media buying for Lancaster Cosmectics.

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