Staples Consolidates Advertising with Dentsu-Owned Shops, Edelman

Retailer Spent $90 Million on Measured Media in 2012

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After a review launched earlier this year, Staples has selected Dentsu agencies to handle its North American marketing business.

The team includes McGarryBowen for integrated creative duties and Carat for media. Also on the roster will be independent giant Edelman for PR.

The selection follows Dentsu's acquisition of Carat parent company Aegis and marks the first time Carat and McGarryBowen have won a piece of business together within the same holding company. Aegis' IProspect, the incumbent on the search business, also helped pitch the account.

According to people familiar with the matter, Staples launched the review early this year seeking greater collaboration from agency partners. In an unusual move, the company paired up a handful of agencies on its own and invited them to pitch in teams. Later in the process, it reworked the agency groups and asked its incumbent shops -- which include Interpublic Group of Cos' McCann, WPP's MediaCom and Publicis Groupe's Razorfish -- to pitch as one team. In the final round, that group of incumbents competed with the Dentsu team.

Agencies either couldn't be immediately reached or declined to comment. Staples didn't immediately respond to a request for comment.

Steven Fund, senior VP-global brand marketing, is understood to have led the search. He joined Staples in 2010 from Procter & Gamble, where he led the Gillette global business unit.

Santa Monica, California-basd consultancy Select Resources International managed the review. Despite the change, as recently as February, Staples said it was "pleased with the quality of work" from the incumbent agencies. The office retailer said its new strategic plan, launched in 2012 was the impetus for the search. "As part of this effort, we launched a new corporate vision," a Staples spokeswoman said at the time. "In light of these changes, this is a perfect time to get new thinking on branding and advertising."

Staples, which also owns B2B supplies brand Quill, spent $90.7 million on U.S. measured media in 2012, according to Kantar Media. That's down from the $115.8 million it spent in 2011.

The company has struggled with competition from online and big box retailers in the commoditized office supply category. The retailer reported sales of $5.8 billion for the first quarter, a 3% decrease from a year ago. Profits fell 9%.

"We're gaining momentum in many parts of our business," said Ron Sargent, Staples' CEO in a statement, following the disappointing earnings. "We're driving growth online and in categories beyond core office supplies, and we look forward to building on our progress throughout 2013."

Still, for the winners of the pitch it's good news in a relatively dry new business year. It's especially welcome for McGarryBowen, which has had some client losses and management changes in the past year.

In April, John McGarry III -- the son of McGarryBowen founder and veteran adman John McGarry – announced his departure from the Dentsu-owned shop where he founded the digital practice. That news came a few months after co-founder Stewart Owen said he was retiring from the agency, and came one year after his father left day-to-day agency operations.

In January, the agency lost its Reebok account and late last year it lost a chunk of its Marriott business. Last summer, it parted with AB Inbev.

Carat, meanwhile, adds to its roster another win. Since picking up General Motors in early 2012, it has won Macy's, Burberry, GoPro and PlayStation.

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