Monday, December 11, 2006

Draft Bagged

Let’s start with this: the American Association of Advertising Agencies’ Standards of Practice. One of the initial ‘graphs states:

We hold that, to discharge this responsibility, advertising agencies must recognize an obligation, not only to their clients, but to the public, the media they employ, and to each other. As a business, the advertising agency must operate within the framework of competition. It is recognized that keen and vigorous competition, honestly conducted, is necessary to the growth and the health of American business. However, unethical competitive practices in the advertising agency business lead to financial waste, dilution of service, diversion of manpower, loss of prestige, and tend to weaken public confidence both in advertisements and in the institution of advertising. [Emphasis added]

Tell me, now that Draft FCB’s rep is thrashed, do you think it’s time for some remedial reading?

In the very early 80s’ I was a copywriter at BBDO/Minneapolis. I worked on the Honeywell business, because BBDO had the advertising assignment. That’s the first time I met Howard Draft. He was a young account executive at Kobs & Brady in Chicago, handling the direct mail portion of Honeywell’s Protection Services business. We used to shake and howdy at various client meetings in Minneapolis.

Kobs & Brady became, as I recall, Kobs & Draft. Then Draft Worldwide. When Draft bought FCB, one Chicago newspaper called it “one of the darkest moments in the history of an increasingly troubled ad industry.”

It’s even darker now: Draft FCB got kicked off the $580 million Wal-Mart account it just won this past week. It wasn’t any prettier than the much-hammered ad Draft/FCB ran – briefly - for last year’s Cannes winners.

At the same time, “one of the most colorful and influential” client-side marketing executives, Wal-Mart’s Julie Roehm, has left Wal-Mart just two months after leading Wal-Mart's advertising account review – out after less than a year on the job. Sean Womack, vice president of communications architecture, who served Roehm closely during the course of the review, is following Roehm out the door.

The story has gotten full play in The New York Times, complete with extravagant gifts, some rather expensive dinners and passions that Wal-Mart’s other executives didn’t find very amusing – or ethical. In one ‘graph, the Times points out:

[Ms. Roehm] was spotted taking a ride in an Aston Martin owned by the chief executive of one agency, Draft FCB. At another time, she was seen riding in a BMW convertible with the president of another, GSD&M, according to people familiar with the matter.

Wal-Mart has strict rules. They prohibit employees from accepting gifts of any kind, as the Times mentions. So – if the gifting and the partying happened – what were Draft/FCB and GSD&M thinking? Yeah, yeah, $580 million in billing was on the table. So what?

Is there some part of ethics that ad agencies don’t understand? (And whoa-boy, I know just as many stories as you do – including the time a Boston agency picked up part of a major energy account by sending the decision-maker live lobsters.)

Tell me, are reputable advertising agencies going the way of HealthSouth, WorldComm and Enron? Tell me, is the ad industry as a whole ethically challenged? Or is this an outlier, a freak occurrence?

More recent stories, like one yesterday in the Chicago Tribune, quote people as saying that maybe it’s not such a big deal – and who needs the Wal-Mart account anyway? I say it’s a big deal.

“A couple of lunches” is one thing. This is another. Howard: what’s the story?

Thanks to Rita Dutt, James Gardner, Angela Natividad, Rob Schoenbeck, John Shanley, Pat Tobin and Buddy “Friendly” Wachenheimer for their help and perspectives.


Angela Natividad said...

I tip my hat back to you, Rich.

But I have to beg the question, what do you think really went wrong with this picture? What went down with Julie looked like your standard schmoozing to me.

And while an ethical business wants to believe the majority of its decisions are objective and based on a good outlook for the long-term, this isn't always the case. Networking by its nature attempts to evade objectivity by creating subjective relationships. An extreme situation like sending live lobsters attempts more blatantly to evade objectivity by pandering outright.

In a people business, the line is always rather fine, wouldn't you say?

Richard Laurence Baron said...

You bet, Angela...although I'd say the line is rather broader (smudgier?) than fine - at least in this case. One issue is what Wal-Mart's rule is: the company has such rules for a reason.

I haven't heard from Howard yet...I wonder what the reverse side of the story is, especially since I'm overseas for the hols and out of touch. Happy New Year!