Droga5 Wins Pizza Hut's U.S. Business

Deutsch and Chain Parted Ways Due to 'Creative Differences'

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Credit: Pizza Hut/Yum Brands

Droga5 is set to become Pizza Hut's new lead agency.

The chain late last year reached out to a select number of agencies that were not on the roster for creative ideas. At the time, it wasn't clear to agencies involved whether the winning shop will execute just one brand idea, take the whole business, or simply be added to the roster along with Deutsch, its lead agency. But it's now clear Deutsch is out.

Said Pizza Hut in a statement: "After earnest discussions with the team at Deutsch, we have mutually agreed to part ways due to creative differences. And so following a thorough review process, Droga5 has emerged as the right partner to help us drive our business forward. Their strong belief in collaboration, superb strategic capabilities and gift for storytelling matched extremely well with Pizza Hut."

Deutsch could not be immediately reached for comment.

"We are proud to partner with the world's leading pizza restaurant company, and for the opportunity to collaborate on work to build on the tremendous brand affinity that exists for Pizza Hut," said David Droga, creative chairman and founder at Droga5 in a statement.

It's not known when Droga5's first work will launch, or what the creative will look like.

Deutsch won the business in the summer of 2014, taking the account away from McGarryBowen, which took on Pizza Hut in 2013. Deutsch is also the lead agency for Yum Brands sibling Taco Bell, which was not affected by this process. Yum sibling KFC in early 2015 named Wieden & Kennedy its lead agency, and it's believed that Wieden & Kennedy participated in the Pizza Hut pitch.

In November, Pizza Hut named David Timm its new U.S. chief marketing officer. He came to the pizza chain after working as chief marketing officer for KFC in the U.K. and Ireland. He replaced Carrie Walsh, who left the company in September after less than two years in the role. Pizza Hut earlier in the year appointed Jeff Fox, a former FCB executive, chief brand and concept officer. Mr. Fox was also co-founder of Collider, a marketing consultancy that Yum acquired earlier this year.

In late 2014, Pizza Hut relaunched its menu with a massive marketing campaign for what it called its biggest brand evolution ever, adding 10 crust flavors and a host of other ingredients in an effort to position itself as more premium. It also relaunched its website, logo, packaging and employee uniforms. Deutsch's work for the campaign included ads where the company asked elderly Italians what they think of the new pizza.

But the relaunch didn't perform as well as hoped. Yum CEO Greg Creed said last year that the new menu had not performed as well as the chain was counting on, noting that the marketing hadn't been as effective as planned. The chain has seen relatively flat sales through much of the year.

Sales, however, turned around in the first quarter. Pizza Hut posted 5% same-store sales growth in the U.S., a bump that "encouraged" Mr. Creed, according to an earnings statement.

Pizza Hut is the 73rd largest brand by ad spending in the U.S., according to Ad Age's Datacenter. In 2014, the brand spent about $233 million, based on Ad Age's analysis of Kantar media data.

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