Wendy's Account Goes to McCann-Erickson

$250 Million to $300 Million in Work Moves From Bates

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CHICAGO (AdAge.com) -- Wendy's International shifted its $250 million to $300 million advertising and media buying and planning account to McCann-Erickson WorldGroup, New York, from Bates USA, its agency for the past 15 years.

"This was a very difficult decision to make given the extremely positive and productive relationship we have enjoyed with Bates USA," Don Calhoon, executive vice president of marketing for Wendy's, said in a statement.

"However, we were not comfortable with the move of Bates' in-house media-buying function to a separate company," Mr. Calhoon said.

Media shift
Last month Bates, part of Cordiant Communications Group, completed the shift of its North American media business, which included Wendy's, to Optimedia, part of Zenith Optimedia Group, which is 75% owned by Publicis Group and 25% by Cordiant.

"I made them aware that was not acceptable and compatible with us in the way we've done business all these years," Mr. Calhoon told AdAge.com. "I thought it right to explore our options and in so doing we've developed a wonderful relationship with Jim [Heekin, chairman-CEO, McCann-Erickson WorldGroup] and rest of the people at McCann."

Wendy's said it considered

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several agencies, but did not disclose the contenders.

"Wendy's is one of the greatest brands in America," Mr. Heekin said. "Brands like Wendy's don't come along very often."

Universal McCann
As part of the move, McCann-Erickson Worldwide will handle creative while sibling Universal McCann will handle media duties for the No. 3 burger giant. McCann-Erickson WorldGroup is part of the Interpublic Group of Cos.

Despite what would appear to be a potential conflict with Burger King, which recently consolidated the bulk of its business with Interpublic sibling Deutsch and Media First International, Wendy's was unfazed.

"If I thought there was an issue, I wouldn't be sitting here today," Mr. Calhoon said.

Bates is on a 90-day termination agreement, and McCann officially takes over in November. When its first work for Wendy's begins in the first quarter of 2003, little will change from current creative.

"I don't think you'll see or feel a difference when it comes to creative," Mr. Calhoon said. "You won't see a difference in the feel and tonality of what we've developed [under Bates]."

Committed to past creative
That commitment to what Bates created raises the question of what will happen with Bates' staff working on Wendy's, namely Gary Steele, executive vice president in charge of the account. Rumors have swirled up and down Madison Avenue that Mr. Steele held meetings with McCann, Grey Global Group's Grey Advertising and WPP Group's J. Walter Thompson, all New York. A spokesman for Bates would not comment on whether Mr. Steele was leaving the agency.

Feuling speculation that Mr. Steele will join McCann is Mr. Steele's longtime association with Mr. Heekin, with whom he worked at J. Walter Thompson when that shop had the Burger King account.

"I have known Gary, but I can tell you he hasn't been any part of this process directly or indirectly," said Mr. Heekin.

Mr. Calhoon said Mr. Steele's status wasn't part of the decision. "That's not up to us," he said, but was quick to add, "We think the world of Gary Steele and the account team that has helped us over these years."

New Wendy's team
Mr. Heekin said the agency has built a "world-class team" and has been assured that Eric Keshin, McCann's general manager, New York, will have total immersion in the business, which will be managed from New York and a satellite office near Wendy's Dublin, Ohio, headquarters. Donna Wolf, head of national broadcast services, Universal McCann, will be a major player on the media side, and George Hays, director, client-media services, will lead the transition from a planning perspective.

Bates' response
Responding to reports that Mr. Steele had for months talked to other ad executives about moving with the business to their shops, David Hearn, CEO of Bates Worldwide, said, "I am quite comfortable that our people have not behaved inappropriately."

Mr. Hearn said a relationship as long as that between Bates and Wendy's was "not something that is terminated overnight. Did we discuss ways to make the relationship work? Yes. We offered options. We thought they were right for Wendy's as well as for our other clients. In the end, we agreed to disagree."

He said it is too soon to say whether employees will be let go as a result of the loss.

"Obviously, it was a substantial piece of business and adjustments will have to be made," Mr. Hearn said. "But we do have a set of skills at this agency in this category and I'm keen to make use of them with other clients."

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Richard Linnett contributed to this story.

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