12975: Class Action For Crumbs.

Advertising Age reported the defunct Commonground/MGS is now facing a class action lawsuit for terminating employees without notice when the enterprise sank. It would be somewhat obscene if the class action lawsuit succeeds against the failed minority holding company, considering all the class action lawsuits that have fizzled out after targeting the advertising industry for its lack of diversity. Plus, any monetary awards delivered to the ex-employees would be paid in crumbs.

Class Action Lawsuit Filed Against Commonground/MGS

Suit Seeks 60 Days’ Pay and Benefits For Employees; Says Shop Shuttered Without Sufficient Notice

By Maureen Morrison

Plenty of agency employees are enjoying holiday bonuses and parties this time of year. But not those who worked for Commonground/MGS.

Those employees were unceremoniously fired and told that as of Dec. 5, they were out of a job, as the agency closed its doors due to what the company told them was financial issues.

Now a class action lawsuit is being filed against PCH Communications, which does business as Commonground/MGS. PCH is a creation of Panton Equity Partners, the private-equity firm that significantly backed the formation of Commonground/MGS last year.

The plaintiff is Jorge Espinosa, who was managing partner of the Miami office of Commonground/MGS. That office was originally MGSCOMM before the formation of Commonground/MGS network in fall 2014.

“This action arises from Commonground’s decision to terminate substantially its entire workforce without a single day’s notice,” reads the beginning of the complaint. The complaint, which said that the plaintiff was acting on behalf of more than 100 employees, alleges that the employer violated a law called the WARN Act that requires employers to give employees 60 days’ notice of mass layoffs.

“This mass layoff was a violation of the rights of the Plaintiff, and others similarly situated, to receive 60 days’ advance notice of their respective termination under the Worker Adjustment and Retraining Notification Act,” reads the complaint, filed in district court in the Southern District of Florida.

The complaint said that the Dec. 5 terminations “resulted in the loss of employment for at least 33% of the employees who worked at, were assigned work from, or reported to its Miami office (excluding part-time employees).” The agency overall was believed to have nearly 200 employees throughout its five offices.

The suit aims to award to those employees “their respective wages, salary, commissions, and bonuses, the cost of health and pension benefits, pay for personal days, accrued vacation pay, severance pay, and other fringe benefits for a period of 60 days.”

Former representatives for the now-defunct agency declined to comment.

“Our hope is to get the employees what they are due under federal law, which is 60 days of pay and benefits,” said Brian Chaiken, an attorney for Mr. Espinosa. “The fact that they were given no notice, and they were let go the same day they got notice and weren’t given much of an explanation makes some, especially those who had been around since before the merger, feel they were treated badly.”

When employees were notified of the closing, PCH sent an email to all, saying, “As many of you may be aware, the agency has been dealing with financial challenges. Over the last several weeks, we have been carrying out good-faith negotiations with our senior lender to attempt to obtain relief from these challenges, and we believed we were close to an acceptable resolution with the lender. It continued, “To our surprise and dismay, however, the lender took hostile actions against CGMGS and froze our bank accounts earlier this week.”

Mr. Chaiken said that the WARN Act does have some exceptions, like unexpected events, but he did not expect PCH and Commonground to be exempted, because that often pertains to disasters like fires.

But the memo specifically mentioned the WARN Act. “While the Worker Adjustment and Retraining Act of 1988 may require advance notice of your permanent layoff, the unforeseeable circumstances of the lender’s actions and our faltering business circumstances that necessitated our good faith efforts to actively secure capital to prevent closing the agency, did not afford us an opportunity to provide such advance notice,” it said.

“Faltering business” may have been carefully chosen language. Mr. Chaiken said that another exception is the faltering company exception, though he does not believe that applies either, as that is generally for the closing of a plant or location and not an entire business.

Earlier this month, Sherman Wright and Ahmad Islam, co-founders of Commonground before the merger and partners of commonground/MGS, told Ad Age that they were working on launching a new agency with no relation to the dead entity. MillerCoors, a client of Commonground/MGS, would remain with the two execs at their new shop.

Other agencies that were part of the deal that formed Commonground/MGS include Vidal Partnership, Sway Public Relations and others, creating what its partners called a wholly minority-owned network. Coinciding with formation of the network, three of the ventures—Commonground Marketing, MGSCOMM and Vidal Partnership—merged to form the agency Commonground/MGS. The move united all the agencies involved, forming an entity with offices in New York, Chicago, Houston, Los Angeles and Miami.

12148: Changing America Specialists…?

The New York Times reported on Commonground/MGS, a new holding group comprised of eight independent, minority-owned agencies. The Times headine reads, “Specialists in a Changing America.” Too bad the advertising industry has not been changing with America. For now, the principals admit not knowing if their offerings should be labeled as cross-cultural, total market, multicultural, general market or whatever. Well, as they cannot call themselves a White agency, their initial adventures will likely involve vying over crumbs.

Specialists in a Changing America

EIGHT independent agencies and companies that create and produce ads aimed at minority, multicultural, urban and youth markets are coming together under the umbrella of a holding group named Commonground/MGS, which will have its headquarters in New York and offices in Chicago, Houston, Los Angeles and Miami.

The five principals of Commonground/MGS, all senior executives with decades of experience in those markets, are describing the new agency holding company as the first in the advertising industry to be wholly owned by members of minority groups. Commonground/MGS will have about 300 employees offering clients services that include, in addition to advertising, public relations, event marketing, social media, content development, production and animation.

Three agencies being brought together under the Commonground/MGS banner — Commonground, based in Chicago; MGSComm, based in Miami; and the Vidal Partnership, based in New York — will be combined to form an agency also named Commonground/MGS. The other five agencies and companies — CG Works, the Cunningham Group, Post Master, Run Wild Productions and Sway Public Relations and Marketing — will continue operating under their own names as autonomous units of the holding group.

The formation of Commonground/MGS comes not long after an article in the trade publication Advertising Age described “a surge of small mid-sized agency holding companies,” among them the CHR Group, the Engine Group and Project WorldWide. They, however, work primarily with marketers seeking to reach consumers in the mainstream.

The new agency holding group also arrives as Madison Avenue pays more attention to the changing face of America, studying demographic trends that suggest ads may be more effective if they are crafted with a “total market” approach, also known as cross-cultural or transcultural marketing: directing pitches at a general audience whose demographic makeup is becoming more diverse rather than aiming ads in traditional fashion at specific ethnic audiences like Hispanics or African-Americans.

“We’re ultimately working toward a total market,” said Andrew J. England, executive vice president and chief marketing officer of MillerCoors, which has worked with Commonground on ads intended for African-American beer drinkers, because “a company like ours has to be open to where cultural influences are coming from.”

For instance, ads meant for African-American consumers that Commonground created for Coors Light beer, featuring the rapper Ice Cube, “became a core part of our total-market approach for a while,” Mr. England said.

“I’m very intrigued” by the formation of Commonground/MGS, he added. “A minority-owned holding company fills an important hole in the landscape.”

MillerCoors is among two dozen clients of the agencies uniting to form Commonground/MGS that will also be clients of the new holding group. Others include blue-chip brands like Bacardi, Coca-Cola, Hyundai, NBCUniversal, Outback Steakhouse, Tiffany and Verizon Wireless.

“We bring clients a solution that’s more relevant than ever: how to target the new U.S.” and how to understand “the multicultural consumer’s influence on the new America,” said Manny Vidal, the president and chief executive of the Vidal Partnership who becomes one of the five managing partners of Commonground/MGS.

“Where there’s change,” he added, “there’s an opportunity.”

“It didn’t take much to convince me that this was the right group to join,” Mr. Vidal said of the principals of Commonground and MGSComm, who had been discussing for some time the possibility of a combination. He was introduced to them by a mutual friend, Jorge Moya, chief creative officer of MGSComm. Top executives of MGSComm — Al Garcia-Serra, chairman, and Manuel E. Machado, chief executive, both of whom become managing partners of Commonground/MGS — met the principals of Commonground when “we pitched a pharmaceutical account together and were able to get to know each other,” Mr. Machado recalled.

“When Al and I started this agency in 2003, part of our long-term plan was to grow not just organically but, through the right people, reaching critical mass,” Mr. Machado said. “But it’s tough to do.” “We’ve all had opportunities” for deals that foundered because there was “a lot of personality in the room,” he added. “Here, we put it all together and the chemistry works.”

Mr. Machado acknowledged that “there is this confusion” over how to describe or refer to the kind of campaign that is now increasingly in vogue: “Is it multicultural? Is it total market? Is it general market? Is it all market?

“At the end of the day, the solution we’re bringing to the table is that we’re able to do the whole thing,” he said. “To do it together makes it a lot more powerful.”

Ahmad Islam, who founded Commonground with Sherman Wright, echoed Mr. Machado. “When Sherman and I started Commonground 10 years ago, clients were looking for a new model to reach multiple consumer segments,” Mr. Islam said. “Those once the minority are now a majority.”

Commonground/MGS will be “a brother-and-sister group of companies” developing campaigns with “a human truth based on a universal insight that applies to everyone,” he added, as well as campaigns aimed at demographic groups like African-Americans and Hispanics that do not “ignore the culture that is still relevant” when approaching those consumers.

“It’s being a bit of a Swiss Army knife,” Mr. Islam said, “not defined by one tactic.”

Mr. Islam and Mr. Wright, who are managing partners of Commonground, will become managing partners of Commonground/MGS. The new holding group will seek growth in three areas, Mr. Islam said: “from existing clients, new clients and acquiring entities that fit the culture, the spirit of what we’re doing.”

Correction: October 16, 2014

The Advertising column on Tuesday, about several agencies that are coming together under the umbrella of a holding group named Commonground/MGS, misstated the name of one agency involved. It is Sway Public Relations and Marketing, not the Sway Group. And a picture caption with the article misspelled the surname of one the partners shown in the group. As the article correctly noted, he is Al Garcia-Serra, not Al Garcia-Sierra.

11571: Delayed WTF 28—Dumb Depot.

MultiCultClassics is often occupied with real work. As a result, a handful of events occur without the expected blog commentary. This limited series—Delayed WTF—seeks to make belated amends for the absence of malice.

Wanted to provide further commentary on The Home Depot’s social media fiasco involving a tweet deemed racist.

Within hours of the mishap, the retailer tweeted a condemnation of the original message and announced, “We terminated agency and individual who posted it.”

Wow. Imagine if every advertiser were so brilliantly decisive and brutally unforgiving. In the overwhelming majority of cases where culturally clueless communications have been published, the client takes the heat while the agency gets off scot-free—and remains gainfully employed. Interestingly enough, The Home Depot partners with The Richards Group, the shop that hatched talking vaginas with stereotypical voices. Why, the White agency even won the Latino portion of the account from The Vidal Partnership with an in-house multicultural unit that would likely feel challenged in a faceoff with TVP’s janitorial maintenance crew.

In short, The Home Depot screwed a top minority agency and handed its business to the segregated silo of a White agency—yet now has the audacity to feel outraged over a clumsy tweet. Perfect.

10811: Heineken Heaves Hispanics.

Advertising Age reported Heineken is shifting its Latino creative advertising duties from The Vidal Partnership to Wieden + Kennedy. To clarify, TVP is a Latino agency and W+K is a White agency. Now, it’s not unprecedented for the minorities to lose their crumbs to the White guys—in fact, it’s becoming a common crime. Culprits like General Motors and Burger King immediately come to mind. There are also the White shops that prop up Latino wings to commandeer the overall marketing budget. Think of The Richards Group and its minority unit, Richards/Lerma, who teamed up to create racist talking vaginas for Summer’s Eve. Incidentally, TVP lost its Home Depot business to The Richards Group and Richards/Lerma in 2010. It seems as if for every Walmart promising to increase its multicultural marketing, there are a dozen brands engaging in Shifty Segregation® or complete abandonment of their minority partners. Heineken VP-marketing Colin Westcott-Pitt provided the following excuse for his company’s move:

“There’s a shift in what consumers are interested in what they believe in and value in life. It trumps where they happen to be from or what their ethnic group is. [Wieden & Kennedy] displayed that they can effectively understand the target consumer for Heineken—demographic elements and behavioral and psychographic elements as well. … We have a great relationship with them from a global and local perspective. To be able to consolidate all creative needs into one agency at that level of quality was very important to us.”

Of course, Westcott-Pitt did not elaborate on the mythical shift, although the statement bears similarities to the cross-cultural mumbo jumbo spouted by executive liars including Mark LaNeve, Mike Kappitt and Susan Docherty. Oh, and ADCOLOR® Award Winner Dan Wieden went from declaring, “Now that’s fucked up” to fucking the Latino agency. It’s just a typical—and stereotypical—day in the advertising industry.

Heineken Agency Shift to Affect PR, Hispanic and Creative Roster

Heineken, Amstel PR Moves to Edelman While Hispanic Is Consolidated at Wieden & Kennedy

By Alexandra Bruell, EJ Schultz

Heineken USA has shifted brand PR duties for its Heineken and Amstel brands to Edelman from Publicis Groupe’s MSLGroup, while consolidating Hispanic advertising with Wieden & Kennedy, which already handles general-market creative duties for the brand.

The importer has also picked Zambezi as the creative agency for Strongbow, a hard-cider brand from the U.K. for which it will assume U.S. distribution rights beginning in January. Strongbow, one of the largest cider brands in the U.S., is owned by Heineken USA’s global parent company, Heineken NV, but had been distributed in the states by Vermont Cider Co.

The move follows Edelman’s win over the summer of Dos Equis and corporate PR. Now, in addition to the new Heineken and Amstel brand accounts, Edelman will also assume Hispanic PR duties for the Heineken brand. The marketer cited Edelman’s creativity on the Dos Equis account, on which it has worked for six months.

We had a fairly complex agency structure,” said Colin Westcott-Pitt, VP-marketing for Heineken. “For us, it’s really about forming deeper, stronger relationships with a number of partners.”

An MSLGroup spokesman said, “MSL New York is very proud of our work across the six-year partnership on Heineken, Heineken Light and Amstel Light. We wish the Heineken portfolio of brands continued success as they move forward in the marketplace.”

This move comes on the heels of the resignation of former MSLGroup North American President Jim Tsokanos. Renee Wilson succeeded Mr. Tsokanos in September.

Hispanic creative and PR duties for brand Heineken had been handled by Vidal Partnership. The importer is moving the work—above-the-line Hispanic, including Spanish language and Hispanic creative—from a niche agency to a more general market agency such as Wieden & Kennedy to account for a shift from demographic targeting to psychographic targeting, according to Mr. Westcott-Pitt.

“There’s a shift in what consumers are interested in what they believe in and value in life. It trumps where they happen to be from or what their ethnic group is,” he said. “[Wieden & Kennedy] displayed that they can effectively understand the target consumer for Heineken—demographic elements and behavioral and psychographic elements as well.”

“We have a great relationship with them from a global and local perspective,” Mr. Westcott-Pitt added. “To be able to consolidate all creative needs into one agency at that level of quality was very important to us.”

The Strongbow assignment is a significant win for Zambezi, a small shop based in Venice Beach, Calif. Cider is one of the fastest-growing segments in the alcohol category. Heineken USA is expected to pour significant resources behind Strongbow, naming it one of its top three priorities for 2013, behind its Heineken and Dos Equis brands. The importer said it plans to differentiate Strongbow from other ciders on the market.

“Zambezi’s responsibilities will include strategic and creative development to support further brand growth in the U.S.,” said Matt Kahn, VP-marketing for Heineken USA portfolio brands.

Heineken USA spent $126 million on measured media in 2011 across its brands, which include Heineken and Heineken Light, Dos Equis, Amstel, Tecate and Newcastle, according to Kantar Media.