Now that Leo Burnett USA. has won the U.S. Army's four-year account that could bring billings of $110 million annually, the agency is eyeing another government contract: the U.S. Postal Service.
"We're moving into a whole new era," said CEO Linda Wolf. The Bcom3 agency is also in the hunt for the $139 million U.S. Postal Service account to be decided by August.
Army Secretary Louis Caldera joined Ms. Wolf in announcing the choice of Burnett over Campbell-Ewald, Warren, Mich., at a Pentagon news conference June 27. He and Ms. Wolf said the tagline for new Army ads hadn't been determined and that no decision had been made on whether the theme of former agency Y&R Advertising, New York--"Be all you can be" --will remain.
Ms. Wolf said several people working on Burnett's pitch had been in the Army or had grown up in military families. Army officials "felt the team was passionate about their business. We presented ideas that spanned across all areas of marketing services, and they felt . . . we spoke with one voice, were very integrated. That's exactly what they were looking for," she said.
Burnett partnered with the Hispanic independent Cartel Creativo, San Antonio, and ImagesUSA, Atlanta, which specializes in black consumers, rather than the agency's own Hispanic unit, Lapiz, or its urban marketing group, Vigilante. "In working with the government, we wanted to go with minority-owned businesses," Ms. Wolf said.
Burnett's Starcom Media also was part of the pitch.
The Army's review process had been criticized because it limited contenders to full-service agencies with at least $350 million in billings--effectively ruling out minority agencies as prime contractors. Mr. Caldera said the billing figure was nec- essary to assure the Army's agency could handle its "large and complex account." But minority agencies and some congressmen have complained the Army's billings minimum was an unfair bar, especially considering 40% of Army recruits are minorities. Jones-Lundin & Associates, Chicago, handled the review.
As for Campbell-Ewald, the shop said it might go after the U.S. Navy's $40 million business considering the insight it gleaned during the five-month Army process. The Army would have been Campbell-Ewald's first government contract.
"We just believe we have good insight into what drives middle Americans to join the service," said Jim Palmer, Campbell-Ewald president. "We are an agency that really is involved in considered purchases. We're not about selling a bottle of beer or a bowl of cereal or a hamburger."
Y&R didn't participate in the review, though the African-American agency that created the Army ads with Y&R, Chisholm-Mingo Group, New York, was part of the Campbell-Ewald team that included Accent Media, Miami, and Initiative Media, Los Angeles.
BONUS FORMULA NOT SET
The Army has adopted the military's first ad contract tied to performance, so creative recruitment and account-management success will help determine Burnett's compensation. The exact bonus formula hasn't been worked out.
Mr. Caldera said the four-year contract--technically a single-year contract with three annual renewal options--would be for $95 million a year in billings but likely will reach $110 annually.
The Army's agency switch comes as other branches of the U.S. military revamp advertising to try and meet recruitment goals during a robust economy. The U.S. Air Force is said to have narrowed the bidders on its contract to incumbent Bozell Kamstra, Irving, Texas; GSD&M, Austin, Texas; Image Media Services, McLean, Va.; Siegelgale, New York; and TMP Worldwide, New York. The Navy is due to issue a request for proposals this week or the next.
LARGEST DOMESTIC WIN
While Burnett and its agencies will do most of the ad work for the Army, they won't do all of it. Mr. Caldera acknowledged one reason the Army chose to rebid its contract was that its current contract with Y&R gave the Army little leeway on its ad work, forcing the Army to give any work totaling more than $10,000 to Y&R and its partners. The Burnett contract allows the Army to go outside the contract.
The Army is Burnett's largest domestic win this year and comes on the heels of its picking up Polaroid Corp.'s $100 million global business. Burnett also recently was assigned RandMcNally.com's $10 million-plus account; Handspring's $10 million account; and McDonald's Corp. co-ops in Richmond, Va., Detroit, and Boston.
Copyright June 2000, Crain Communications Inc.