LOWE DIRECT WORKING TO BOLSTER OPERATIONS NEW ACCOUNTS, HIRES ARE PART OF REBUILDING EFFORT TO STEM FALLOUT FROM BREAKAWAY

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Lowe Direct is trying to "stabilize" operations with new hires, new direct assignments from Ameritech Corp. and a plan to extend a U.S. relationship-marketing effort for Mercedes-Benz into Europe.

The New York agency, which reported $70 million in billings and $11 million in revenues during 1996, lost sizable pieces of business last fall when five key executives, including then-CEO Bob Lieber, left to form a breakaway shop, Lieber Levett Koenig Farese & Babcock.

'FORGET THE BOTTOM LINE'

"We took a licking when those people left," Marvin Sloves, co-chairman of Lowe & Part-ners/SMS, said last week. But, he added, "There's no pressure on [new Lowe Direct CEO] Lynn [Fantom]. I said to her, 'Forget the bottom line.' My goal is for us to do better than last year."

Neither Mr. Sloves nor Ms. Fantom would discuss projected 1997 revenues based on Lowe Direct's current client roster.

During the final months of 1996 and first two months of 1997, Ms. Fantom made restaffing a priority.

"It was Oct. 14 and we had five resignations from management. Then eight more employees left and I'd only been on the job two days," Ms. Fantom said.

On board now are Exec VP-Executive Creative Director Doug Speidel, former group creative director at Wunderman Cato John-son; Senior VP-Group Account Director Mark Merriman, formerly senior VP, Sudler & Hennessey; and Mercedes-Benz Management Supervisor Christine Wagner, former VP-advertising and public relations for card members at Chase Manhattan Bank.

In November, Lowe Direct won a $10 million assignment from Ameritech for its Security Link home alarms. The next month, it picked up more business from Ameritech, a collaboration with Leap Partnership, Chicago, on a family-targeted campaign for Ameritech.net; ads for the Web-access service will break in Ameritech's Midwest customer region this month.

MERCEDES MEETING

Lowe Direct also recently won Ameritech's new Quick Reach Paging product and is going for more Ameritech Consumer Services business, such as the account it recently won for the company's new Caller I.D. products.

Lowe met with Mercedes in late February to propose to its European marketing managers an extension of the carmaker's U.S. relationship-marketing program.

But Lowe will have to work hard to get back into the position it enjoyed last year before losing some Dell Computer Corp. business, and a $15 million piece of Merck & Co. business to Lieber Levett.

LOWE SETTLES WITH BREAKAWAY

Lowe originally sought $50 million in damages from Lieber Levett, which announced plans to countersue. But the two agencies resolved their differences in an out-of-court settlement finalized Nov. 20, 1996, and insiders said they believe Lieber Levett paid far less than the $50 million Lowe requested.

At the heart of the breakaway agency's formation were issues about the autonomy of Lowe Direct as a distinct unit, Mr. Lieber said at the time. Under the current agency management, Ms. Fantom reports directly to Mr. Sloves.

Lowe Direct also is no longer working directly with Roche Laboratories' Xenical.

It was announced as the winner of that account last year, but Roche later delayed signing a deal because of the breakaway situation. Lowe kept the business by combining the resources of Lowe Direct, Lowe & Partners/SMS and its Lowe McAdams healthcare unit; the account has since been consolidated at Lowe McAdams and the general agency.

TEAM APPROACH TO PITCHES

Ms. Fantom said all direct-to-consumer pharmaceuticals accounts going forward will be pitched by an integrated team. Lowe Direct on Feb. 12 pitched Pharmacia & Upjohn's estimated new $40 million to $50 million Colestid business with Lowe & Partners and Lowe McAdams. Colestid is a cholesterol-lowering drug.

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