That sound you heard Friday night was Madison Avenue licking its collective chops. In a stunning split, Target dropped longtime agency Wieden & Kennedy, leaving the retailer's marketing strategy, and potentially millions of dollars in new business, up for grabs.
The breakup was revealed exclusively to Ad Age and came as a surprise to adland, given the popularity of Wieden's work and a partnership that grew stronger in recent years. In 2009, Wieden, which had been on Target 's roster for years, got the ultimate vote of confidence in becoming the retailer's first lead agency without a review. The move was made at the direction of former chief marketing officer Michael Francis. Target has been without a CMO since he decamped for JC Penney in October.
Mr. Francis told Ad Age in 2010 that it was time to bring in a "more thoughtful quarterback." Target felt it needed a partner to help align its messaging and approach across channels, he said. Before that , the company had relied on a group of boutique shops, such as Peterson Milla Hooks, and Mr. Francis appears to be using that approach at JC Penney, which just split with agency of record Saatchi & Saatchi.
The parting with Target leaves Wieden open in the retail category and hungry to replace any revenue lost. Some industry observers are already speculating that Wieden will follow Mr. Francis to JC Penney. But that would mean the agency's once again having just a piece of the pie, and at a slightly smaller marketer.
According to the Ad Age DataCenter, Target is the No. 18 ad spender in the U.S., with a budget of more than $1.5 billion. JC Penney ranks No. 25th, with $1.32 billion devoted to U.S. marketing.
With neither a CMO nor a quarterback, it's a whole new ballgame at Target . Shawn Gensch, the company's VP-marketing and head of partner management, said in a statement: "Target is proud of what we accomplished with the Wieden & Kennedy team during our six-year partnership. Looking forward, we are focused on continuing to identify fresh and innovative ways to tell Target 's brand story, and will leverage both our internal expertise and our strong roster of agency partners to help accomplish our marketing goals in 2012 and beyond."
Susan Hoffman, executive creative director in Portland, added: "It was a great creative opportunity to work with such an iconic brand. We love the pace and the dynamics of working in the retail space."
Wieden executives declined to comment further, but industry executives suggested that the relationship was strained after Mr. Francis left. Wieden had worked closely with him, and his exit sparked debate over the company's marketing direction.
In the absence of a CMO, VP-creative Liz Elert, an alumnus of such retailers as Gap and Victoria's Secret, has been leading the effort, according to industry executives. Ms. Elert, a newcomer to Target , and Wieden are said to have butted heads.
"It's safe to say there's not a single factor we would point to," said Katie Boylan, a spokeswoman for Target . "At this point, we're focused on trying to innovate and tell the Target story in the most creative way possible."
It's not clear whether the mass marketer will look for a new lead agency or return to a multiagency strategy. Ms. Boylan said that Target would be relying on a mix of internal and external talent. It has worked with a variety of agencies, including Haworth, Olson, AKQA, Huge and Mother .
Ms. Boylan declined to name specific agencies that Target works with now.
"What's important is making sure we have the right mix of talent. … The media landscape is evolving quickly. We're also making sure we have the right agencies for the right parts of our business," Ms. Boylan said. She also would not comment on the status of Target 's CMO search but said that the model will leave room for whoever fills the post "make adjustments along the way."
The approach was decidedly upbeat when Target first hired Wieden in February 2006 to handle select creative projects. Early executions included "Happy Together," showcasing how college students could decorate their dorm rooms. A few years into the relationship, the agency refined the marketing message for a recession mentality, evaluating the resonance of the tagline: "Expect More. Pay Less."
It took a few tries to get the tone right. The short-lived "Collections," featuring actor Alan Cox, was not distinguishing. And some of the work from Wieden for the 2009 holiday season lacked joy and warmth.
But the "Life's A Moving Target " campaign that followed hit the right note, as did the "Christmas Champ." Ms. Boylan said it would be premature to discuss whether either of those campaigns would remain a part of Target 's mix.
Wieden's last output for the brand is still to be determined. The recent ad "Done," which was part of the "Santa has Elves. You have Target " campaign, was ranked one of the season's most effective spots by AceMetrix.
"We'll be having conversations about work and transitioning in the coming days and weeks," Ms. Boylan said.
