Shrinking client budgets are continuing to put pressure on creative agencies, and Leo Burnett is the latest to take a hit.
This month, the agency’s Chicago office let go at least four creatives working on its Allstate account, according to one senior person affected by the cuts. That person tells Ad Age the decision was due to the client cutting back on its spending. “Seems like every client is asking for more or the same amount of work for less,” he says.
A Leo Burnett spokesman confirmed the cuts, telling Ad Age that as the agency "continues to transform, we are constantly looking at our staffing and talent mix across a number of teams to ensure we are delivering the best work for our clients. This summer, we did adjust our staff and a small number of people were affected."
Allstate did not return a request for comment. Leo Burnett is behind several notable campaigns for the company including its "Mayhem" character that once landed on Advertising Week's "Walk of Fame" parade down Madison Ave. (That parade that featured beloved brand mascots was discontinued in 2007.)
As we ready for the 16th annual Advertising Week New York to kick off on Monday, where everyone will be all rah-rah over the industry, the news out of Chicago is a sobering reminder that all is not well in adland. Agencies are increasingly being squeezed by declining budgets, transparency and privacy concerns, work shifting in-house and to projects, among other pressures. Most recently, the industry watched as 10-year-old creative agency Barton F. Graf closed its doors; client budget cuts were cited as a big reason.
(Shameless plug: keep an eye out for our extensive coverage on the ground next week and don't forget to pick up a copy of our Advertising Week issue, out Monday.)
In death there’s life
Still, it seems, no matter how dire the state of advertising becomes, new agencies and related entities continue to emerge. This week, former Publicis Sapient Chief Strategist and Creative Officer Gaston Legorburu launched his own consultancy, GlueIQ, described as a hybrid consulting and marketing services firm with offices in New York and Miami. The firm comes to market with clients including Atlantis, Paradise Island, Peri Ellis and Regent Seven Seas, and a mission to “hack the agency model.” Co-Founder Matt Kujawa says the consultancy was born out of a “broken” industry in which “clients struggle to see the value they’re getting from their agency partners.” GlueIQ says it already has a staff of creative, strategy and media executives including Kujawa and Marguerite Conde, a marketing strategist who has worked with Legorburu for the last 15 years. Legorburu says the consultancy will set aside “the politics and finances of the big agency model” to “get back to basics.” Kujawa adds, “We need to work with our clients, not for them. That means blurring the lines between teams and responsibilities to work together as a single unit.”
Brands prepare for the 'new majority'
WPP’s media investment division GroupM is forming a coalition comprised of Disney, Google, iHeartMedia, Meredith Corp., NBCUniversal, Twitter, Univision and Viacom to help brands better develop their planning and media strategies to adapt to changing U.S. demographics. The New Majority Ready Coalition aims to shift ad dollars to target multicultural populations in the U.S. GroupM says the multicultural population currently makes up 40 percent of America, yet brands only invest 5 percent of their media spend to target this group. By 2020, 52 percent of individuals under 18 years old are estimated to be ethnically and racially diverse and by 2045, minorities are estimated to be the majority in America. The coalition will include tools and programs for brands to prepare for this shift. Gonzalo del Fa, president of multicultural at GroupM, says, “While we acknowledge the steep climb ahead to better reflect the new majority in our own industry and workforces, it’s exciting and validating to be a part of and witness the many leading organization who recognize and are acting on the rising new majority.”
McCann taps into Gen Z craze for FujiFilm campaign