Founded in 1946, the shop now known as Euro RSCG Tatham was for decades a stronghold of the Chicago agency world. As recently as 1998, the shop boasted $510 million in billings and a client roster including ConAgra, Dean Foods and Red Lobster. Today it holds none of those brands.
The agency is struggling to hold onto the $80 million Red Lobster account now in review and just last week lost the $20 million Sara Lee's Hillshire Farm business. Furthermore, there are widespread reports its largest remaining account, the estimated $60 million Walgreen's business, is shaky following the exit of Chief Creative Officer Jim Schmidt and his art director partner Joe Stuart, who was lead creative on the account. Walgreen's did not return calls at presstime for comment.
Observers and insiders blame a continually shifting corporate vision, an inconsistent mission and staff defections. "This is the shell of the Tatham I knew. It's very deficient, not sharp, not crisp," said an ad industry consultant familiar with the shop.
New Euro RSCG Chairman-CEO Jim Heekin has made cleaning up Tatham his No. 1 priority. Among his first moves are restructuring management, hiring new creative leadership and changing the brand name-likely to Euro RSCG Chicago-to help clarify the network's Power of One integration strategy. "We need somebody that buys into the next iteration of what we are out there. It's no longer TLK and Procter & Gamble," he said.
Indeed, the agency that gained prominence as Tatham Laird & Kudner has struggled to redefine itself since 1999 when P&G consolidated its ad accounts with four networks, dropping Tatham from the roster. Many observers credit Euro RSCG Tatham Partners CEO Gary Epstein and others for trying to move away from its perception as a package-goods shop.
That vision took a sharp turn in 2002 when Euro RSCG Worldwide combined 11 multidisciplinary Euro agencies into two units under a "Power of One" initiative in which both had a single profit-and-loss center. Euro RSCG MVBMS Partners became an agency with $2.4 billion in billings, while Euro RSCG Tatham Partners was enlarged into a $1.9 billion agency. Mr. Epstein became CEO of the Tatham unit.
Pat Palmer, Tatham's chief strategic officer who left in August to join Publicis Groupe's Chemistri, said the creative product suffered due to the distraction of the Power of One. "We lost sight of why people come to [ad] agencies, which is creative."
There were a number of defections. Within the past six months, its advertising executive committee of ten dwindled to three as management left the shop. The creative department under Mr. Schmidt went from its peak of 24 three years ago to its current four.
Mr. Epstein said turnover was no greater than any other shop and contends that the agency and its integration strategy are far from failures.
Tatham is "a Power of One agency that has best in class and capability in multiple disciplines," said Mr. Heekin, but he added that "one of the common denominators of the issue has been creative problems."
The inability of the two cultures to work together was the main reason Mr. Schmidt resigned. "The management group wasn't gelling and by removing myself, perhaps they can find someone that works better with them," he said. "I take ultimate responsibility for the creative product but the whole agency has to be on the same page to push creative product forward."
The new name marks the agency's seventh in the past 13 years. (Tatham Laird Kudner to Tatham/RSCG to Tatham Euro RSCG, to Euro RSCG Tatham to Euro RSCG McConnaughy Tatham to Euro RSCG Tatham Partners).
contributing: alice z. cuneo, lisa sanders