Dentsu-owned Mcgarrybowen has resigned the whopper Sears account in the US, the latest shake-out in a protracted agency review by Sears Holdings which also owns supermarket Kmart and some other retail businesses. Mcgarrybowen has handled Sears since 2011.
Sears, the one-time king of the department store trade, has become a basket case in recent years, losing money consistently. Kmart, currently handled by FCB Chicago, is in slightly better shape but always the number two to Walmart.
You might say that Mcgarrybowen is well rid of Sears, notorious for trying to grind down fees, but the retailer still spends north of $300m on ads. Mcgarrybowen’s decision, if, indeed, it was the agency’s decision, creates a clear opportunity for new FCB boss Carter Murray to get the agency up the billings table if he can persuade Sears to come his way. FCB, after a much improved run, lost the flagship KFC account to Wieden+Kennedy two weeks ago.
But the Sears loss will also alarm Dentsu. The Japanese marcoms group has revived its fortunes outside Japan with two big deals in recent years. First it bought Mcgarrybowen in the US, formed by two ex-Y&R veterans who seemed to do no wrong. Then it bought media agency Aegis – owner of Carat, Isobar and Vizeum among others – in a £3.6bn deal which has given it real momentum in Europe and the US.
But Dentsu is stil short of the creative firepower it needs to mount a real challenge to WPP, Omnicom, Publicis Groupe and Interpublic. Even Havas, which lags it in terms of size, has stronger creative assets in Havas Worldwide and France’s BETC.
Dentsu has been mooted as a buyer for Interpublic, owner of McCann, FCB, Lowe and go-go digital agency R/GA. North America boss Tim Andre has always refuted such notions. But Interpublic is now much more expensive than it was anyway, following a successful revival under CEO Michael Roth. A deal would now cost the best part of $10bn against not much more than half of that two years ago.
So Andre and his Japanese bosses have a problem. Mcgarrybowen seems to have run out off gas and it was always a big ask to expect it to become a credible worldwide network on its own. Its recent foray into London has not been a great success, despite some good work for Honda Europe.
Sears might be one of those accounts (many of them are retailers) that you wave goodbye to with relief. But the repercussions just might mean that Dentsu dusts off its cheque book again.
