Verizon is moving the bulk of its wireless business to McCann Erickson, New York, from McGarryBowen without a review, Ad Age has learned.
McCann currently handles the company's FiOs business, and like McGarryBowen, has a long history with Verizon. According to people familiar with the matter, McCann will be the lead agency on the wireless business, though McGarryBowen will remain on the roster for innovation work. The first work from McCann quietly launched in the last couple weeks with a new TV spot called "Emojis."
According to people familiar with the matter, the company is consolidating its creative work with two agencies: Wieden & Kennedy, which is the brand and strategy agency, and McCann Erickson, which will continue to be the lead on FiOs, but will now also be the lead agency on wireless, handling the day-to-day promotion of products and services.
It's a sizeable move, but it's not the first shakeup on the brand this year. Earlier this year, W&K wedged its way onto the Verizon roster for brand and strategy work; the brief excluded products and services from the scope. Verizon in September unveiled a new logo, and though it was created by design firm Pentagram, the subsequent marketing was handled by W&K.
'Optimizing our roster'
W&K's scope of work is not expected to change with this most recent shift, though it's possible that W&K from time to time will handle a wireless brief outside its scope. According to people familiar with the company, McCann will be fielding the work that McGarryBowen handled after W&K was added to the roster.
McGarryBowen declined to comment. McCann declined to comment.
Verizon did not offer much detail, saying only: "As a policy, we don't talk about our agency relationships, but we are constantly optimizing our roster to ensure we have access to the best thinking and most creative ideas." The company added that McGarry continues "to be a valued partner on our agency roster."
With McCann now handling more chunks of the business with FiOs and wireless, its parent company Interpublic Group of Cos. now holds a significant chunk of the business within its agencies. In June, the company handed the bulk of its digital business to Interpublic's R/GA, though it retained incumbent AKQA as well. Other Interpublic agencies on the roster include MRM, Momentum and Erwin Penland. The company's longtime media agency is Publicis Groupe's Zenith.
The most recent change comes a year after Verizon tapped Diego Scotti as exec VP and chief marketing officer. Mr. Scotti was tasked with boosting the global brand and creating consumer awareness. In May, Verizon tapped Melissa Garlick to lead a brand creative group overseeing strategy and creative development across Verizon's products and services and for all customer touchpoints, including advertising, branding, digital content and store design. More recently, John Harrobin, a senior marketing executive, announced he would be leaving by the end of the year.
Trading accounts
The move is a coup for McCann, which was once Verizon's longtime agency of record. McCann and McGarryBowen have swapped Verizon back-and-forth over the last decade or so. Verizon was a founding client of McGarryBowen when the shop launched in 2002, but the company in 2007 moved the business to McCann as it looked to whittle down its list of agencies.
McGarryBowen picked up the wireless business from McCann in 2010. That was a huge blow to McCann, but wasn't all that surprising, given that the year prior, Verizon began reaching out to agencies beyond McCann for the launch of its Droid phone, which McGarryBown ended up handling.
The shop has seen significant account tumult this year, beginning in January when Verizon tapped W&K -- a moved that showed the company was serious about making agency changes. At the time, McGarryBowen remained the agency of record for wireless and McCann remained the agency of record for FiOs.
In February, McGarryBown and the Sears brand parted ways in the midst of the company's massive holding-company level review of all its work. Then in August, Chase and McGarryBowen severed what was left of their relationship after much of the brand's work had gradually moved to other agencies or in-house, leaving the shop with just corporate work.
Pitches and turnover
The agency, however, just recently won the JC Penney account, which provides much needed relief. The shop is also currently involved in Kraft's agency review, which is said to be a cost-cutting measure following the merger of Kraft and Heinz.
The shop has also had some senior leadership turnover this year. McGarryBowen's Tim Scott, international CEO and president of the Chicago office, left in April to become CMO of Land O' Lakes. Just two weeks prior, the agency's New York office named Simon Pearce president and chief client officer, succeeding Tom Sewell, who had been in the role since May 2014. (Mr. Sewell continues at the agency in an innovation role.)
Verizon is the fifth-largest advertiser in the country, according to Ad Age's Leading National Advertisers report. In 2014, it spent $2.53 billion on measured and unmeasured media, according to the report. It's not clear how much is spent on wireless versus FiOs, but it's likely more is spent on the wireless portion of the business.
Verizon has seen a number of recent changes, including the purchase of AOL for $4.4 billion earlier this year and the launch of its mobile video service, Go90, aimed at teens and millennials. In September, the company said that it expects its 2016 earnings to plateau at 2015 levels "as the company focuses on mobile and digital media while shedding some landline telephone operations," according to a Bloomberg report.
The company added 1.3 million new monthly wireless subscribers in the third quarter, the company announced this week.
