DDB Caught in Clash of Major Clients

Emerson and Anheuser-Busch Slug It Out in St. Louis Street Fight

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So what's an agency to do when two longtime clients start bludgeoning each other in public?

DDB, Chicago, finds itself in exactly that awkward position today following a report in the St. Louis Post-Dispatch that Emerson, an engineering conglomerate, has instructed its divisions to boycott Anheuser-Busch products in response to A-B's new insistence on making vendors -- including Emerson -- wait 120 days for payments. Emerson also included among its reasons what it described as A-B's cutbacks in funding to local nonprofits, including the United Way and the Girl Scouts.

The orders were contained in an internal memo obtained by the newspaper. "With the InBev acquisition of Anheuser-Busch, we have seen negative things happening in the St. Louis community and in regard to Emerson doing business with InBev," the memo reads. "Effective immediately, we will not use Anheuser-Busch InBev products at the Emerson World Headquarters complex, Winfield Conference Center, on Emerson planes, or in Emerson suites at Busch Stadium (Cardinals), Scottrade Center (St. Louis Blues & concerts), and Edward Jones Dome (Rams).

"We want all divisions to comply and not purchase or stock any Anheuser-Busch InBev products. We suggest you use Coors, Miller, Modelo or Heineken products."

A-B, not surprisingly, took those as fighting words, saying it was "surprised and disappointed" at the "inaccurate portrayal" of A-B and its discussions with Emerson, which provides technical support to A-B breweries.

"Suggesting that Emerson's corporate events should be supplied by other brewers -- including Heineken and other beers not brewed in St. Louis -- is surprising and one that we believe won't be well appreciated," A-B President Dave Peacock said in a statement. "As a supplier to Anheuser-Busch, Emerson benefits from our success."

So, with Emerson questioning A-B's corporate citizenship and A-B questioning Emerson's accuracy and judgment, what's the agency responsible for boosting both brands to do?

A-B, of course, is among DDB's largest and most visible Chicago clients, with a relationship dating to 1977. The agency currently handles Bud Light, Budweiser, Bud Light Lime and Bud American Ale. InBev's recent move to cut down its agency roster and limit the scope of each agency's work has actually eliminated most of DDB's competition for work on those brands, in some ways strengthening those longstanding ties.

Emerson, for its part, has been a DDB client since 1998, and the agency led the $25 billion engineering behemoth's rebranding from "Emerson Electric" a decade ago. While the company doesn't spend as much on marketing as A-B, it is among the agency's best and longest-running business-to-business cases.

That category is becoming more important at DDB, Chicago, which netted AT&T's B-to-B account last year in its biggest new-business win of the year. DDB was recently named the No. 2 B-to-B advertising agency by Ad Age's sibling publication, BtoB.

A DDB spokeswoman declined to comment on the awkward client clash, which one public-relations expert said was a wise move. "I'd let those guys work it out and stay out of it," said Pete Marino, president of Chicago-based Dig Communications, which counts MillerCoors, Wrigley and PF Chang's as clients.

But the agency is definitely not the only party in a tough spot over the dust-up among titans in St. Louis' often insular corporate scene. Consider that former A-B Chairman and CEO August Busch III sits on Emerson's board of directors, where he chairs the audit committee.

Emerson, in a statement, said: "We wish Anheuser-Busch InBev and their St. Louis-based employees every success. This was intended to be an internal matter and we regret that it became a public issue. We have nothing further to add."

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