In a blow to Leo Burnett USA’s turnaround efforts, Chicago’s biggest advertising agency finds itself having to fight for one of its biggest accounts.
Wayne, N.J.-based toy retailer Toys “R” Us, under tremendous sales pressure from discount retailers, put the creative portion of its advertising account in review.
Though Burnett’s work, which included bringing back the talking “Geoffrey” giraffe, was well received, discounters like Target Stores and Wal-Mart have taken significant market share from Toys “R” Us in recent years.
The company spends more than $110 million a year on advertising, making it one of Burnett’s largest and most people-intensive clients.
“As a company, we are in the process of taking a strategic look at our U.S. toy stores business in total,” said Warren Kornblum, executive vice president and chief marketing officer of the retailer.
Burnett said it would aggressively defend the business, though incumbents rarely prevail in reviews.
“We’re passionate about defending and keeping the Toys “R” Us business,” a Burnett spokeswoman said in a statement. “We’re in this relationship for the long haul and we welcome the competition.”
The review comes at a crucial time for Burnett. It will be the first major test of new President Tom Bernardin and new chief marketing officer Ben Klein. Both have made new business a priority after months of striking out in new-business pitches.
Right now, though, their jobs appear to be as firemen.
The agency also hopes to prevail in another battle when the U.S. Army puts up its $100 million advertising account for a mandatory review expected to kick off in coming weeks.
Toys “R” Us said that the review would involve “only a small number of agencies,” and would be conducted on an “invitation-only” basis. The retailer expects to have a winner by May.
Burnett has held onto the account for five years.
The review comes on the heels of a downgrading of Toys “R” Us stock by several analysts in the past few weeks. They cite the company’s inability so far to find a niche that could outflank the deep discounters.
Layoffs coming at Jack Morton: Interpublic Group of Cos.’ marketing services firm Jack Morton Worldwide is expected to cut as many as 24 of the company’s 30 jobs in the Chicago office on Wednesday. The downsizing is a blow to one of the company’s traditionally strongest offices. The remaining staff is expected to move from its North Lake Shore Drive office to other Interpublic space in the city. A spokeswoman from Morton’s headquarters in New York wouldn’t comment.
On the move: Minneapolis advertising shop Colle+McVoy promoted John Jarvis to president. He retains his title as chief creative officer. … Scott Voege, formerly with Campbell-Ewald’s Los Angeles office, and Adam Callow, formerly with Publicis in Dallas, joined Chicago Creative Partnership as account supervisors.
Special committee to stay: Though settlement talks between former Hollinger International Inc. CEO Conrad Black and the Securities Exchange Commission are ongoing, it now appears that one option would be a revised consent decree that would include keeping intact the special committee’s investigation into a payment scandal involving Black and other executives.
Black, who was stripped of his chairman title at the company, still controls Hollinger International through his overwhelming voting stake via parent Toronto-based Hollinger Inc.
Sources close to the negotiations say that the settlement talks could result in the SEC agreeing to give in to a federal judge’s ruling to vacate the SEC’s earlier consent decree that effectively kept Black from firing the board. These sources say that nothing is firm and that the two sides are still talking.
Black’s Hollinger Inc., the parent company of Hollinger International, sued to intervene in the SEC’s ruling in January, saying that as controlling shareholder of Hollinger International, it wasn’t given an opportunity to respond to the SEC’s order.
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Woodfield’s “everything”: Schaumburg’s Woodfield mall is beefing up its marketing efforts by launching an aggressive TV, radio and print ad campaign. The new work from ad agency Michael Walters Advertising focuses on finding “everything” in the area’s largest shopping mall. The tagline? “Everything. Everybody. Everyday.”
You’ll see it everywhere locally starting Wednesday.