Young & Rubicam Brands Inc. in Irvine is reeling from a one-two punch.
The advertising shop recently was cut from the $100 million global advertising account review for Ford Motor Co.’s Jaguar Cars. Then Sony Electronics Inc.’s U.S. arm in San Diego axed it.
All in the same week.
The losses will kill about half,some $200 million,of Y & R;’s Orange County capitalized billings.
And it puts more pressure on the Irvine office, just as its New York parent struggles to mount its own comeback.
Advertising circles are buzzing with the news of the past few weeks. Some wondered if Y & R;’s OC office could withstand the double blow, particularly because its 2002 loss of Lincoln Mercury is fresh in their minds.
David Murphy, Y & R;’s managing partner overseeing the Irvine office, dismissed the speculation.
“The office is about 350 employees strong,” Murphy said. “After Sony and Jaguar, our capitalized billings (still) are well over $250 million.”
Plus, Murphy said that Y & R;, which is part of Britain’s WPP Group PLC, has “strong and growing relationships” with its remaining clients.
They include Ford Motor Co.’s Land Rover North America, Callaway Golf Co. and Mattel Inc.
Still, Murphy said the office stands to feel an impact from the Jaguar and Sony losses.
He declined to give specifics. But expect changes to follow, as they did when Lincoln Mercury shifted its headquarters from Irvine to Detroit in 2002 and left holes in Y & R;’s hallways.
At the time, Y & R; downsized its office space after losing about 65 workers. People left for other companies or shifted to Y & R;’s Detroit office, which took on the Lincoln Mercury account.
Murphy also gave his managers a pep talk to go after new business.
Now it’s take two.
Murphy said he recently held a company town hall meeting to “share the information we have” about the losses of Sony and Jaguar. Y & R; won the automaker’s account in 2001 after beating WPP siblings JWT and Ogilvy & Mather.
“We are approaching this the same way we approached the Lincoln Mercury transition,” Murphy said. “We’re being very open and transparent with our employees. They’ve been through this before.”
Y & R;’s Detroit office reports to Murphy.
Locally Y & R; is down to one Ford client, Land Rover, which is part of Ford’s Irvine-based Premier Automotive Group.
Jaguar also is part of the auto group. Jaguar, which has been trying to rejuvenate its image and jumpstart slumping sales, launched the ad account review in November, shortly after naming a new global marketing director.
Jaguar’s review still is under way and includes WPP siblings Berlin Cameron/Red Cell and JWT, both in New York. Y & R; reportedly had teamed with Berlin Cameron to defend the Jaguar business. But the automaker chose Berlin Cameron on its own as one of six finalists, according to a recent report in trade publication Adweek.
A final decision from Jaguar is expected in March. Roth Associates in New York and Agency Assessments International in London are handling the review.
Y & R; got the bad news just as it was losing Sony Electronics’ $100 million account.
The Irvine office took on the Sony account last year when the Japanese electronics maker shifted its U.S. headquarters from Park Ridge, N.J., to San Diego.
Y & R; inherited the work from its New York office.
But the account, which helped Y & R; rebound from the Lincoln Mer-cury loss, came with problems.
Sony was unhappy with Y & R; after John Partilla, who led the Sony Electronics account, left last year for a position at Time Warner Inc., ac-cording to trade publication speculation.
Y & R; held the Sony account since 1998. The Irvine office did the bulk of the work during the past year.
Assignments included Sony’s digital imaging, home entertainment and portable audio products, and Vaio laptop computers. Brands included Walkman, Cyber-Shot and Handycam.
Sony decided not to renew its contract with Y & R;, which ends on March 31. The shop likely will be replaced by Fallon Worldwide, part of France’s Publicis Groupe SA, which already created campaigns for Sony Electronics in Europe and Japan, according to a report in trade publication Advertising Age.
The losses come at a bad time for Y & R; and its parent, which launched a turnaround bid in 2003 in hopes of bringing in clients and stemming losses.
Ann Fudge, an ad industry outsider who joined as chief executive of Young & Rubicam Inc. in New York in 2003, was tapped to lead the charge. Management was reshuffled and some 45 workers were cut in New York.
Most recently, Fudge appointed Gord McLean as chief executive of Y & R; in North America, a post that had been vacant.
But the picture still is pretty gloomy back east. In the past year, Y & R;’s New York office lost accounts for Burger King Corp. and Computer Associates International Inc.
Another large client, AT & T; Corp., plans to cut its budget for consumer advertising. Its marketing plans also are up in the air in the wake of its pending deal to be bought by SBC Communications Inc.
Those losses have overshadowed wins, such as Weight Watchers International Inc. and Callaway Golf’s $40 million account, which the Irvine office picked up last summer.
The Irvine shop also won work from Microsoft Corp.’s Xbox. It’s been expanding assignments with Microsoft’s consumer product lines, which include MSN, Murphy said.
“Over the years, our track record has been good at earning new assignments,” he said. “I’d like to think (Y & R;) people are optimistic. We’ll respond the same way going forward by picking up new business and moving on.”
Y & R;’s 2004 SCORECARD
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Y & R;’s Irvine office: other accounts include Mattel, Microsoft’s Xbox, Land Rover |
WINS
Toy ‘R’ Us $120M
Weight Watchers $45M
Callaway Golf $40M
FreeMove $30M
ChevronTexaco $20M
LOSSES
Burger King $300M
Computer Associates $100M
Jaguar $100M
Sony Electronics $100M
Kraft brands $30M
Sources: AdWeek, Y
