Here's a Shop Reorganization That's Working

Element 79 Adds Sports Unit (but Few Staffers) and Lands Three Clients

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It's an old agency tactic: Hyping a new unit that isn't all that new or a reorganization that really isn't. But in the case of Element 79, the touted shift actually resulted in the agency picking up a bushel of new business.
Agency-search consultants and even some of Element 79's clients say largely cosmetic reorganizations or division launches can help an agency emphasize the stronger points of its portfolio.
Agency-search consultants and even some of Element 79's clients say largely cosmetic reorganizations or division launches can help an agency emphasize the stronger points of its portfolio.

Element 79 Sports, launched late last year, has snared three clients -- the National Hockey League, the U.S. Soccer Federation and retailer Finish Line, which together spend more than $12 million -- an impressive haul considering the agency already had expertise in sports, didn't add much in the way of staff, and left the people running the sports unit on their nonsports assignments.

Agency-search consultants and even some of Element 79's clients say largely cosmetic reorganizations or division launches can help an agency emphasize the stronger points of its portfolio. And for Element 79, Gatorade's agency of record, sports marketing clearly qualifies.

'Rearranging deck chairs'
"These sorts of moves work when they appear to be relevant to what the client wants," said Chris Colbert, managing partner at Pile & Co., "even in cases where the client realizes that they're essentially just rearranging deck chairs."

The Chicago shop's clients said the presence of a sports division, even though it did not offer capabilities significantly beyond what Element 79 already had, was a big help in selling the agency.

"It's fair to say [there's not a lot new there]," said Jim Morehouse, communications director for the U.S. Soccer Federation. Mr. Morehouse said he was sold on the shop more than a year before hiring it, after he worked with the agency on a soccer project with Gatorade. "But having a formal structure does make it easier to sell through."

Fresh paint, same wall
In the past, agencies have frequently offered "new" divisions dedicated to specialties such as selling to kids or women.

Campbell-Mithun, Minneapolis, for instance, launched kid-marketing unit Boing to capitalize on its experience with Burger King's kids club.

And then there's OgilvyAction, Ogilvy & Mather's "activation-services" unit, launched in January, which gave the agency network 1,000 employees it already employed at seven units it already controlled in 36 countries it already did business in -- but under a single brand.

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Not a sure thing
A look at some recent agency reorganizations.

One that worked: Element79 Sports, 2006. The Omnicom shop formalized a sports practice and quickly netted three sports accounts.

One that didn't: Lowe & Draft, 2003. In this "merger" of creative and direct-marketing giants, there was little to no cooperation between the networks.

One the book is still out on: OgilvyAction, 2007. This WPP entity grouped together 1,000 people from seven entities in 36 countries.

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Alice Z. Cuneo contributed to this report.
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