7871: Corporate Cultural Collusion Continues.

Adweek reported on the recent account shifts that took place without formal reviews. Not mentioned in the piece is how clients continue the Corporate Cultural Collusion that ultimately perpetuates industry exclusivity.

Fast and Friendly: The Straight Shift
What’s behind the recent rise in the number of accounts that moved without reviews

By Andrew McMains

The review process is as much a tradition in the advertising industry as is the complaining, from both agencies and clients, about the time and expense involved. And recently, some marketers have opted to dispense with the practice altogether.

Since January 1, 29 sizeable accounts that last year collectively spent nearly $3.6 billion in major measured media shifted without reviews, including major brands such as Chevrolet, Cadillac and Jeep, according to Adweek research. That’s a huge jump from the same period of 2009, when some 17 accounts worth a total of $1.5 billion shifted without pitches, Adweek research found.

Agency leaders point to the sour economy as a primary driver of this year’s shifts sans reviews. The recession has only heightened the pressure on marketing chiefs to deliver share gains quickly, so they in turn are bypassing reviews that can take anywhere from three to six months, executives said. Beyond the time savings is the appeal of working with an agency that is known and trusted.

And while it’s risky internally for a CMO to fire and hire without the consensus a review might breed, it can be riskier still to hire a shop you’ve never worked with before based primarily on how it performs in a pitch.

“A CMO typically joins an organization and has just two years to make an impact,” said Matt Weiss, chief of staff at MDC Partners’ Kirshenbaum Bond Senecal + Partners. “So, I think it’s less about hubris … than it is [about] a genuine market need to move incredibly quickly.”

Of course, familiarity and past performance are no guarantees of success. And agencies that benefit from quick hires can also be hurt by them. Omnicom Group’s DDB, for example, added creative duties on H&R Block in June 2009, owing to connections with then-CEO Russ Smyth, a former contact at McDonald’s. After Smyth left H&R Block last month, CMO Robert Turtledove shifted the business to Publicis Groupe’s Fallon—his agency when he was CMO of TheLadders.com.

Even victims of such shifts, however, see wisdom in skipping the time and expense of reviews. “There’s a financial as well as mental and emotional [toll] from going through a pitch process,” said Brandon Snow, U.S. director of business development at DDB.

But the vast majority of account moves still stem from reviews. The total of 29 review-free shifts came against the backdrop of last year’s total of 154 creative and media moves, Adweek found, based on accounts that spent at least $20 million annually. Many CMOs prefer the rigor and team building that a search can provide.

“I think it’s really important that we make the decisions together,” said Alexis Cardona, CMO of Transitions Optical, which opted for a review in its ongoing search for a global creative agency.

Travel search engine Kayak.com considered hiring an agency without a review last year but ultimately opted to conduct a review, albeit one without a consultant or RFPs. Kayak CMO Robert Birge, a former top executive at TBWA\Chiat\Day in New York, handpicked finalists Goodby, Saatchi & Saatchi and 180 after meeting with five shops.

Going into the pitch, sources eyed Saatchi as a favorite, given that then CCO Gerry Graf knew Birge from their days at TBWA\C\D. Goodby, however, won the $40 million account, proving that relationships alone don’t guarantee success.

“We needed to launch a brand and for us, the review process added a lot of value in terms of how much focus and energy is put on it,” said Birge. “There is a process where planning function and the best planners get involved in a pitch and it’s hard to replicate that outside of a review process.

While some view recent high-profile shifts like Chevrolet and Cadillac as relatively rare—“Very few client organizations cede that kind of lateral control,” said Ogilvy & Mather North American chairman John Seifert—others expect the practice to grow, particularly if a client needs quick and drastic change.

Such was the case when General Motors hired vp of U.S. marketing Joel Ewanick in May, after years of market share erosion. In his second week on the job, he hired Goodby to replace Publicis on Chevy and in his seventh week, he named Fallon to replace Bartle Bogle Hegarty on Cadillac. Ewanick had worked twice before with Goodby (when he held marketing roles at Hyundai and Porsche) and once with Fallon (also when he was at Porsche).

“He’s in a position where he has to win or lose. He can’t just maintain,” said an agency CEO who declined to be identified. “So then you go in with your best teammates. That’s what you do.”

Ewanick didn’t reply to an e-mail asking about his rationale for the quick hooks.

Ultimately, of course, agency performance overshadows the particulars of how an account arrives at an agency. And if the initial hire stemmed primarily from a relationship with a single client executive, the shop may be more vulnerable and less proven in the eyes of the client organization, particularly if that executive leaves. As Avi Dan of Avidan Strategies in Forest Hills, N.Y., put it, “All agency selections are risky in some way, even agencies that you know well.”

Hat Tip to KMBA