Gone are the days of the 20-plus-year agency-client relationship.
The past decade saw the rise of tech titans, consultancies, direct-to-consumer brands and a media transparency report that challenged the industry and led to disruption galore, along with several significant breakups of long-standing agency-client relationships. Today, agency-of-record appointments are more likely to last just three to five years, versus decades or even centuries (as was the case with one partnership).
Greg Paull, principal and co-founder of R3, says he's seen the "lifespan of client-agency relationships dramatically reduce over the last 10 years." He says "agency of record" has become more "flavor of the month."
"Marketers have increasingly moved to jump balls, freedom within a framework and project basis to manage getting the best work," Paull says. "It's put incredible pressure on longstanding agencies, who have had to merge or adjust their business models to compete." For the next 10 years, "we only see the trend continuing," he adds.
Here are 10 of this decade's most shocking breakups of some of the longest agency-client partnerships:
Reaching a boiling point
In an ugly parting of ways, FCB and Nivea ended their more than century-long relationship that dates to when the agency went by the name of Lord & Thomas. It was a significant loss for the Interpublic Group of Cos. shop—Nivea spent only $21.8 million on measured media in the U.S. in 2018, per Kantar; however, with a larger international presence and $4.9 billion in global annual sales, the German Beiersdorf brand represented 1 percent of agency revenue globally, according to an internal FCB memo. According to people familiar with the matter, the relationship had been on the rocks since 2017 and the companies allegedly came to a head when a client-side marketer rejected a photo the agency had proposed of two men’s hands touching by saying “Nivea doesn’t do gay.” Publicis Groupe has since been selected as Nivea’s new global agency partner beginning in January.
A family company?
Nivea was not the first major breakup FCB endured this decade. In 2011, SC Johnson took its entire global marketing account from the agency—then called DraftFCB—and split it between WPP’s Ogilvy and Omnicom’s BBDO. The FCB-SC Johnson relationship dates back 50 years, to when the shop was still operating as Foote Cone & Belding and before it merged with Draft Worldwide in 2006. SC Johnson was one of FCB's biggest and longest-standing clients—its media spend was estimated at the time of the breakup to be $400 million in the U.S. and in excess of $1 billion globally.
Left behind is only a bad taste
After 57 years, WPP’s Wunderman Thompson saw the end of its relationship with Johnson & Johnson’s Listerine brand—which worked originally with J. Walter Thompson, then Wunderman, and then the merged networks (Wunderman Thompson) until October of 2019. At that time, J&J moved its Listerine brand as well as Tylenol and Zyrtec to MDC Partners’ Doner and Code and Theory, which is backed by Stagwell Group. While the move was a blow to WPP, it was a victory for MDC and Mark Penn, who took over as CEO last March. The win was the first major one for MDC under Penn, following his $100 million investment in the company by Stagwell, where he remains chairman.
A win for the consultancies
After 32 years, financial services company Manulife, operating as John Hancock in the U.S., severed ties with IPG’s Hill Holliday by hiring Deloitte Digital’s Heat as its global creative AOR in July 2017. The decision followed a review launched in March of 2017 that Hill Holliday did not participate in. Some of the most memorable work that came from Hill Holliday included One Fund Boston—a foundation set up to help victims of the bombings at the 2013 Boston Marathon, which John Hancock has sponsored for years. At the time that the account was put in review and Hill Holliday decided to sit it out, the agency said it was “deeply proud of the work we have done and the partnership we built with John Hancock.”
15 years too long
General Mills ended its nearly 15-year U.S. media AOR relationship with Publicis Groupe’s Zenith in September 2015—sending the account to WPP’s Mindshare. Zenith had held that business since 2001. General Mills—whose brands include Cheerios, Progresso and Yoplait—is currently in the midst of a North American creative review that has garnered a fair share of public criticism. In an effort to move from an AOR- to project-based model, like many companies are seemingly doing lately, General Mills took lead duties away from MDC’s 72andSunny in May 2019. In its review, the company has been accused of requiring participating agencies to relinquish control of their ideas and pitch for free.
The biggest blow
Procter & Gamble sent its North American media buying and planning account to Omnicom Media Group and Dentsu Aegis Network’s Carat in 2015—dealing a big blow to Publicis Groupe’s Starcom, which had handled parts of the business for more than 15 years, and the entirety of it since 2004. (Starcom currently still handles certain international media duties for P&G, while Publicis is on the roster for creative.) In 2018, P&G consolidated its hair-care business with Carat following a review that also involved Omnicom’s Hearts & Sciences.
Biting the bullet
IPG’s McCann lost the lucrative U.S. Army account it held for 13 years to Omnicom’s DDB in November 2018. After the account went up for review originally in 2014, it was extended multiple times—as was McCann’s contract. After DDB won the business, beating out WPP’s Possible and McCann, the incumbent filed a protest with the Government Accountability Office. The GAO denied its protest bid on the grounds it was incomplete and McCann eventually withdrew it in 2019. McCann, which fought for the Army account for years, officially had its contract terminated in March.
All is not lost
Following a highly-contested global creative review that concluded in October 2018, Ford handed lead global brand creative duties to Omnicom’s BBDO and several high-profile North American assignments to Wieden & Kennedy—dealing a hard hit to WPP. While WPP kept significant pieces of the business including media planning and buying, shopper marketing and CRM, historic ties were severed between the holding company and automaker. Ford had continuously worked with WPP creative agencies since 1943, when it initially hired J. Walter Thompson. In June, WPP’s dedicated Ford agency, GTB, hired Digitas veteran Robert Guay as its new CEO, replacing Satish Korde. Guay is tasked with holding onto the remainder of the Ford business. Despite the creative losses, Ford remains WPP's largest client.
Love lost twice
In April of 2019, ADT selected McCann Worldgroup as its lead strategic and creative agency following a two-month review. The shift was only one of several, and likely gave its longtime incumbent, MDC’s Doner, whiplash. After handling ADT’s creative account since 1999, Doner lost the business for the first time to Arnold in 2013—only to win it back eight months later, in June 2014, without a review. Their mended relationship remained strong through to 2019, when McCann took the business once again from Doner. Will 2020 see a rekindling of this on-again, off-again relationship?
On again, off again
Speaking of on-again, off-again: at the very start of this tumultuous decade, Verizon moved its creative account for its wireless business to Dentsu’s McGarryBowen from McCann (in 2010). Verizon had shifted back and forth between the two agencies since the early 2000s. (The wireless carrier was a founding partner of McGarryBowen in 2002 then switched back to its former longtime AOR, McCann, in 2007.) Verizon’s indecisiveness between the two partners didn’t stop in 2010. In 2015, the company again moved the bulk of its wireless business—from McGarryBowen to McCann. Wieden & Kennedy was brought into this relationship in 2015, as well, with Verizon splitting its creative work between the independent agency and McCann. Then W&K was taken off the business in 2016 and the work it was handling consolidated back with McCann. Throughout all of the losing and winning of Verizon's wireless business, McCann did manage to hold onto Fios.
