The constant churn of ad agencies – Arbys

Tom Dougherty, CEO – Stealing Share

22 February 2012

It’s rarely the creative that’s the problem. It’s the brand strategy.

Arbys just announced that it was severing ties with BBDO in favor of Crispin Porter + Bogusky without so much as a review. Normally these agency changes go unnoticed by most of us, including us at Stealing Share, because they happen with such frequency that it would be ridiculous to comment on every one. To understand and appreciate why this news is important, you first have to know the following facts:

  1. Arbys switched to BBDO after a decline in same store sales with its previous agency.
  2. In 2011, Arbys posted its highest sales increase in 10 years with its “Good Mood Food” themeline.
  3. The current CMO of Arbys, Russ Klien, used to be Global CMO of Burger King and used CP + B as BK’s agency. Mr. Klien just came on board at Arbys last month.
  4. Burger King fired CP + B after a year and a half of declining sales.

 

“What’s worse is that, in most cases, the agency that gets the business is either the incumbent or an agency that was just fired by one of the competitors.”

So why is this news notable? In and of itself it is really no different than the rest of the churn in the advertising world. New leadership is hired in a new company and the new leadership want to put its mark on the company. Usually, the new person would put a $100 million account up for review and get a few agencies to pitch for the business. But not in this case. Mr. Klien opted to bring in an agency he had experience with and did little to steal market share for BK.

ArbysThis is all fine and good, but it is an example of a problem that runs wide and deep, particularly with consumer goods. Companies have become so processive in their thinking that they constantly recycle their agencies without ever arming these agencies with the tools they need to be successful. In most cases, there is some sort of “problem” that prompts a company to hire a new advertising agency as the company executives believe the solution to the problem lies in new creative execution. What’s worse is that, in most cases, the agency that gets the business is either the incumbent or an agency that was just fired by one of the competitors. This brings nothing new to the table and, more importantly, does nothing to address the fundamentals that caused the problem in the first place. (The auto industry is also famous for this kind of recycling.)

It is remarkable but this happens over and over again. An agency will get fired from “Company A” only to be hired by that company’s competitor a month later. Then the agency that was fired from Company A’s competitor will turn around and get hired by Company A. If it seems confusing, pointless, and ludicrous, it is.

Creative execution is hardly ever the problem. It is usually the strategy behind that execution that causes the loss of market share. It is the very brands themselves that cause company problems, which are sadly seldom addressed or looked at as the root cause.

Companies that spend time thinking about their brands as equally important to their business do not have to change agencies. (Think Apple.) A meaningful (and different) brand gives all of the wonderfully creative and talented employees all the fodder, guidance, and restraint, they could possibly need, allowing them to pump out their best work, consistent and true to the DNA of the brand.

I’m not sure what the problem was here for Arbys. But I can tell you that whatever problem Arbys thought it had will not be fixed by hiring its competitor’s fired agency.

See more posts in the following related categories: Arby's Burger King marketing Fast Food advertising QSR branding QSR brands QSR marketing

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