DraftFCB Group is hiring to fill a staff of 130 to toil on its newly won $580 million Wal-Mart account, which was pitched-and will be run-primarily out of the agency's Windy City offices. "The lion's share [of the new posts] will definitely be in Chicago," said a DraftFCB spokesman, who noted that a few of the recruits will wind up in Bentonville, Ark., outposts.
While hiring staff after a large account win is standard practice, it may seem a bit foreign to Chicago ad executives, who grew far more accustomed to layoffs following account losses during a painful 11-month stretch that saw business from JC Penney, Orbitz, Hillshire Farm, Maytag, Cadillac, Home Depot, Dell Computer, Miller Lite, Kraft Foods and the U.S. Army leave town (see chart).
That trend has made layoffs far more common than hires during 2006, with Publicis Groupe's Leo Burnett and Omnicom Group's DDB among the local shops cutting staff this year. But ad executives in the city are hopeful DraftFCB's Wal-Mart win could not only reverse that trend, but help the market shake its reputation as a hub for TV spots for large Midwestern companies such as McDonald's and Sara Lee.
Beyond package goods
After all, DraftFCB wooed Wal-Mart with a broad-based offering, consisting equally of the promotional and direct-marketing expertise and glossy creative its pre-merger shops were known for. "If the end product is good, it'll show people that this is a market that's gotten pretty good at 360-degree thinking," said Peter Krivkovich, president of Chicago independent Cramer-Krasselt, one of the few area shops to post significant growth during 2006. "There's a lot of good work being done here beyond 30-second spots for package-goods."
But if business-retention trends are any indication, clients weren't buying in this year.
The local slide started last December, when the Army marched its $1 billion creative account out of Leo Burnett and into McCann Erickson's New York office. A few weeks later, the Chicago offices of JWT and FCB lost Kraft Foods' mayonnaise, salad-dressing and barbecue-sauce accounts ($35 million). Then DDB lost Home Depot's interactive and direct-marketing work and Dell Computer's consumer account ($250 million). Young & Rubicam saw Miami's Crispin, Porter & Bogusky take over Miller Lite ($180 million).
In the spring, Burnett lost Cadillac ($225 million), as well as Maytag and other Whirlpool brands ($44 million). The summer saw Element 79 lose Hillshire Farm ($20 million) and DDB split with JC Penney ($430 million). And the losses continued into the fall, as Orbitz ($61 million) flew away from Y&R.
Amid the carnage, there were a few victories. DDB lessened the blow of its JC Penney loss by picking up Safeway ($250 million), and Cramer-Krasselt boxed out Dallas-based Richards Group during Corona beer's account consolidation.
But Wal-Mart ($580 million), which was won by DraftFCB's Chicago office, trumped them all, and in the process gave some local ad executives reason to believe the business cycle could turn for them too, particularly if high-profile projects such as Wal-Mart and DDB's Bud.tv produce positive results.
"It's something that could change the perception of Chicago from just a big package-goods town," said Paul Tilley, managing director, creative, at DDB. "That's good for the market."