Fallon Worldwide (Fallon McElligott)

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Founded in Minneapolis as Fallon McElligott Rice by Patrick Fallon, Tom McElligott, Nancy Rice, Fred Senn and Irv Fish, 1981; acquired by Scali, McCabe, Sloves, 1986; repurchased by employees of Fallon McElligott, 1993; opened first branch office, Fallon McElligott Berlin, with partner Andy Berlin in New York, 1995; opened first overseas office in London, 1997; purchased by Publicis Groupe and renamed Fallon Worldwide, 2000.

Fallon McElligott Rice was formed in 1981when Patrick Fallon and Tom McElligott, who met while freelancing in Minneapolis, asked Nancy Rice, Fred Senn and Irv Fish to join them in opening an advertising agency.

The agency captured high-profile awards during its first year in business, working for clients such as the Episcopal Church of North America. In 1982, Fallon landed the account of US West, one of the regional "Baby Bells" created by the breakup of AT&T Corp., and two years later, Fallon was named Agency of the Year by Advertising Age. In 1985, Fallon won its first major national business with the account of The Wall Street Journal.

By 1985, the agency's billings had grown to $80 million. Such rapid growth had its costs, however; that year Ms. Rice left to open her own shop. But the agency continued to win national accounts, including Federal Express and Rolling Stone, both of which were won that same year.

"Perception. Reality"

In one of the most acclaimed advertising campaigns of the 1980s, the agency developed the "Perception. Reality" campaign for Rolling Stone, repositioning the aging popular music magazine as influential not only with ex-hippies but also "yuppies." One print ad showed a Volkswagen van decorated with "flower-power" decals under the headline "Perception"; on the facing page, a sports car appeared under the headline "Reality."

Fallon placed the ads in industry publications such as Advertising Age and Marketing & Media Decisions. From 1985 to 1991, ad pages in Rolling Stone increased 58%, positioning the publication as a rival to more traditional male-oriented magazines such as GQ and Esquire. Advertising revenue increased more than 200% over the same period.

By 1986, the agency had grown to 100 employees and $100 million in billings, and large shops began to express interest in acquiring Fallon. Scali, McCabe, Sloves emerged the winner, acquiring an 80% interest in Fallon. Scali then began an initiative to focus Fallon's energy more toward meeting bottom-line objectives.

Between 1987 and 1989, Fallon continued to acquire blue-chip clients, including Lee Jeans, Porsche and Timex. Fallon's research led the agency to recommend that Lee reposition itself to target women and, using the slogan, "The brand that fits," Fallon created print ads with headlines such as, "Our jeans solve two major problems. Inhaling and exhaling." In the late 1990s, Fallon repositioned Lee again as a sexier, hipper choice for women with the new "Cut to be noticed" theme.

In 1988, Mr. McElligott, unhappy with Scali oversight, broke his contract and took a year off from advertising. Although there was speculation about whether Fallon could maintain its edge without Mr. McElligott at the creative helm, in 1989 Fallon not only landed the Jim Beam account but also captured 14 Clio awards, the most the agency had ever won in a single year.

Agency buyback

Fallon fell into a slump from 1990 to 1991, losing a bid for the high-profile MasterCard account. To revitalize itself, the agency made a number of new hires in 1992, including Bill Westbrook, who became president and creative director. Fallon also repurchased itself from Scali for $14.6 million. Billings that year were flat at $125 million.

In 1994, however, Fallon posted a banner year, acquiring new clients such as Coca-Cola Co., McDonald's Corp., Ameritech and BMW. In 1995, the agency also won Prudential Insurance Co. of America, which became the agency's largest account.

Fallon's first campaign for Prudential was built around the slogan, "Be your own rock," a derivation of the "Piece of the rock" positioning that had been the mainstay of Prudential's advertising for many years. (After Prudential reduced its spending through Fallon in 1996, the agency resigned the account.) By 1995, the agency boasted 200 employees and $200 million in billings.

That year it opened its first branch office, Fallon McElligott Berlin, with partner Andy Berlin in New York. The partnership did not work out, however and Mr. Berlin bought the office after two years. Fallon McElligott launched a new branch office in New York called, simply, Fallon McElligott in November 1997.

In 1997, McDonald's awarded Fallon the creative assignment for its Arch Deluxe, a sandwich positioned to appeal to adults. To stress the fact that the sandwich was designed for sophisticated taste buds, Fallon created a campaign that depicted children literally turning up their noses at the new menu item. Critics argued that it damaged the brand equity McDonald's had created with children and that depicting the food as undesirable was risky. The campaign was short-lived, however, and Fallon resigned the account later in 1997.

In 1997, both Advertising Age and Adweek named Fallon Agency of the Year. Fallon also won the $100 million domestic account of United Airlines that year, despite the agency's limited airline experienced (it had briefly worked for Northwest Airlines earlier).

Fallon introduced a controversial ad campaign for Miller Lite in 1997 with an overarching premise that there was a fictional genius named "Dick" responsible for the bizarre ads. Within two years, more than 50 ads in the "Dick" campaign were created, but most reviews were unflattering, and in 1999, Miller dismissed Fallon and reassigned Lite to Ogilvy & Mather Worldwide.

By 1998, Fallon had grown to $500 million in billings and more than 500 employees and added four new high-profile clients—Nordstrom, Qualcomm, John Nuveen & Co. and Starbucks Coffee Co. Fallon launched opened Revolv, a unit that specialized in interactive advertising, and opened an office in London, with Lee Jeans Europe and the BBC's Radio 1 as clients.

In February 2000, Fallon (renamed Fallon Worldwide) was acquired by France's Publicis Groupe for an estimated $250 million.

In 2003, Fallon had worldwide gross income of $90.7 million dollars, up 12% from 2002. It ranked No. 25 among U.S. agency brands, according to Advertising Age, with U.S. revenue of $82.2 million, up 11.2% from the previous year. The agency's Web site is www.fallon.com.

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