NEW YORK (AdAge.com) -- There is change atop long-troubled Y&R Advertising as Hamish McLennan is leaving the agency he has helmed since summer 2006, and is being replaced by David Sable, vice chairman and chief operating officer of WPP sibling Wunderman.
The news comes amidst a rough patch for WPP-owned Y&R, which has seen the defection of several longtime clients and is also battling in a review for the Sears account and a chunk of tech titan Dell's creative business. Both Y&R and Wunderman are part of WPP's Y&R Brands network. Mr. McLennan, Y&R's CEO, will remain chairman until end of year. He will return to his native Australia for family reasons.
While in many respects the work at Y&R has improved in the U.S., the clients haven't stuck around to benefit. In October MetLife's U.S. advertising account went to MDC Partners' CP&B after a review; Y&R retained the global business. And last September Y&R lost 7Up, the last piece it had of the Dr Pepper Snapple Group account after a 40-year relationship, when the beverage giant moved the brand to McGarryBowen without a review. Most recently, in January, it lost Hilton Hotels to Cramer-Krasselt.
Meanwhile, Mr. Sable is highly respected around WPP. He, along with Chairman-CEO Daniel Morel, has been responsible for Wunderman's growing global marketing-services network. Ad Age recently named Wunderman the No. 2 agency on its "Standouts" list, noting that in the U.S. it may soon pass Y&R in revenue. Global wins have included CVS, Best Buy and Kodak.
In addition to direct-marketing experience at Wunderman, which he joined in 2000 to lead the New York office, Mr. Sable has logged time in PR (at Burson-Marsteller and Cohn & Wolfe) and at creative agencies. He joined Y&R early in his career and returned in 1990 to lead the United State Postal Service account.
Mr. Sable will walk into a sticky situation. Earlier this year, Dell launched a creative review that involved three accounts: its consumer; small and medium business; and public business, which involves advertising targeted to public institutions. Dell remains the brand-advertising agency for the tech giant and may hold onto the consumer and small- and medium-business accounts. Sears, an account Y&R has handled since the marketer consolidated there in 2005, is also in review.
Martin Sorrell, chief executive of WPP, considers the move a silver lining. "It's a great pity Hamish has to go Australia but he's put his family first," he said. But he praised Mr. Sable: "He's almost a Y&R lifer. He's well known in the agency ... and under [CEO] Daniel Morel at Wunderman the two of them have taken Wunderman to leadership in the digital industry. Wunderman has grown to almost $1 [billion] in revenue."
He noted that Mr. Sable leads WPP's Microsoft team, which is the fourth-largest account in the holding company.
And Mr. Sorrell dismissed any suggestions that Y&R is troubled, saying the agency had its best year in 2008 and second best year in 2010. "It recovered sharply from the problems the industry has had in 2009," he said.
Mr. McLennan told Ad Age this morning that any accounts lost were "far outweighed by new revenue on surging business. The fact of the matter is we had an incredible year last year and had a significant increase in profits year on year. If you were a shareholder you would have been really happy." He said the losses in 2010 accounted for less than half a percent of Y&R's global revenue. "We don't like losing one piece of business, but on the whole this is an industry that's very fluid. The business turned around incredibly well last year."
Still, the role atop Y&R has historically been a difficult one. Mr. McLennan was hired in June 2006 after a year-and-a-half-long search to succeed Ann Fudge, the former Kraft marketer who joined Y&R three years earlier. At the time of his arrival, he was expected to help turn around the Madison Avenue giant, which during Ms. Fudge's tenure had lost clients such as Sony and Jaguar. Mr. McLennan will return to Australia, the agency said in a statement.
One recent bright spot: Y&R's creative work has appeared to turn around under Global Chief Creative Officer Tony Granger; it was the third highest-winning agency network in the 2010 Creativity Awards Report and its New York outpost was the fifth most awarded agency office.