In one of the first significant splits between Levi Strauss & Co. and its agency of record for more than 65 years, the world's largest apparel marketer has begun a search for a new interactive ad shop.
The move is prompting incumbent Northern Lights Interactive, San Francisco, to close, said an executive at parent True North Communications. Northern Lights, a sister unit of longtime Levi Strauss consumer agency Foote, Cone & Belding, had handled the marketer's three Web sites.
"If Levi's wants to go to a different type of relationship, it doesn't make sense to have a self-standing unit," the True North executive said.
TN EXEC `OPTIMISTIC'
The executive, however, said he is "optimistic" that a True North unit will be included in the interactive review.
Among the agencies believed to be participating in the review are Organic Online and Ikonic, both San Francisco; K2 Design, New York; and BoxTop Interactive, Los Angeles.
At this point, it's unclear what will happen to the 10 to 12 people now staffing the Northern Lights San Francisco office. At least two will transfer to the San Francisco office of TN Technologies' Modem Media, the True North executive said.
NEW AGENCY PLANNED
The two former co-managing directors of the unit, Martin Lauber and Colin Cook, plan to open their own integrated digital shop, sources said.
The company was satisfied with True North's creative and production capabilities but not its strategic resources, said Clarence Grebey, director of global communications for Levi Strauss.
The new agency, to be selected from a predetermined shortlist, will provide a central strategic resource on a global basis for interactive services.
The interactive agency will need to "address leadership, client services, consumer insight, technical consulting, and creative and product capabilities," Mr. Grebey said.
He said the review will not affect the relationship between Levi Strauss and FCB, San Francisco, its agency since 1931. FCB handles almost $200 million in ad spending for the marketer.
"This has absolutely no impact at all on our relationship with FCB," Mr. Grebey said.
The Levi Strauss interactive account is estimated to be worth $2 million to $5 million in billings and possibly more in 1998 and beyond if the company decides to begin electronic commerce.
Seth Goldstein, president-CEO of New York interactive agency CKS Site Specific, which is not involved in the review, said that while many marketers including Levi Strauss have focused on spending millions of dollars on Web site development, the real value going forward will be in targeted advertising, sponsorships and syndicated retail environments on highly trafficked sites such as Yahoo! and C/NET.
"You shouldn't have to bring someone to levi.com to get the brand message across," Mr. Goldstein said.
Instead, Levi Strauss and other advertisers should be making more use of interactive ads and bridge pages that allow users to get product information and even order merchandise without having to click through to a marketer's home page.
In recent years, Levi Strauss has awarded a number of small assignments to agencies outside the FCB stable. Miller/Kadanoff/Huber, San Francisco, last spring was awarded a marketing project involving development of direct mail to customers of the Original Levi's Store outlets.
The agency's relationship-marketing assignments have been augmented since then, a source said.
Contributing: Beth Snyder.
Copyright September 1997, Crain Communications Inc.