Leo Burnett Sydney fires Subaru
Leo Burnett Sydney has fired client Subaru. Changes to the carmaker’s agency working model, where agencies must pitch against each other for every brief, has been given as the reason for the split.
In an email to staff obtained by Mumbrella, Todd Sampson, Leo Burnett Sydney’s CEO, wrote:
We talk a lot about our priorities: People. Product. Profit (in that order) and sometimes that means we have to make some hard decisions. This is one of those hard decisions. Yesterday we fired Subaru. As you know Subaru decided to change its working model to one where their agencies pitch against each other for every brief. You know better than anyone that pitching is really hard on you, our culture and our current clients. We simply don’t want to work that way. We deserve better. We have had a long relationship with Subaru, of which the last 10 years were record sales, so we all need to act professionally in ending this relationship. Whilst they have not treated us well recently, they are not bad people.
Sampson declined to comment.
Other agencies on the Subaru creative agency roster include Disciple, which handles brand, and US Sydney, which handles retail.
Subaru Australia’s national marketing manager Toby O’Bree was unavailable for comment at the time of going to press.
Among notable ads Leo Burnett has created for Subaru was last year’s ‘crowd rider’.
Good for them. It is great to see an agency with the backbone to say no to unreasonable terms.
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good call Todd. if you cant have faith in your agency – whats the point.
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Shows balls – but with good reason
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Good to see an agency sticking up for its principles and more importantly its staff. Subaru must be mad to want to pitch every campaign, as a client I rate pitches up there with root canal treatment at the dentist.
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Well done, it wouldn’t have been a decision taken lightly and shows a lot of backbone.
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well done Todd. It’s about time agencies stand up to client with unreasonable demands.
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Nice work Leos. Subaru are clearly labouring under some delusion.
As an Asian company, Nick Senior, Andrew Caie and Toby O’Bree will be in face-saving control and questions will be asked by both FHI and Inchcape, I suspect.
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Good move by Todd & co. I really can’t see how this model enables agencies to deliver their best work as their engagement with the client will be ad hoc. How can there be consistency at brand level with multiple agencies all having a crack. Seems very tactical.
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Just in time too. The designs of the new models coming out are horrible – extremely vanilla/pedestrian – will be tough to market.
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Well done, Leos.
Do Subaru REALLY pitch every single brief? Or just the big ones (new launches, stuff like that?)
If the former, then that’s crazy and the definite mark of an inexperienced and/or unprofessional marketing department.
If the latter, it’s still an indictment on Subaru. If you have a roster, you really should know which agency is best suited to which briefs.
So well played by Leos. Sadly, however, there will be no shortage of agencies queuing up to get treated like peons by the good people at Subi.
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Todd, if you really had principals, you’d fire your large cigarette company client.
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Good on them. No agency deserves to be treated like that, particularly by a main/major client. When I was working agency side (which was until recently), I was sick to death of even our minor clients requiring pitches for every piece of work. It was insulting and time conusming – many of these companies we’d worked with for several years, produced great work and achieved wonderful sales results. And that’s how they repaid us? It’s rude, costly and unnecessary. That’s not how client/agency relationships work so it’s good to see somebody having the guts to act on this.
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That takes big balls , good to see Agencys pushing back and not just laying down.
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So did Todd make these comments or not?
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Drop your girlfriend before she drops you….
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Well done, any client demanding that clearly has little respect for their agencies.
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I thought that by making them pitch for a few briefs they were ‘putting the agency on notice’. The old pull up your socks or you’re out technique.
Perhaps Leo’s got the first shot in and walked away, perhaps I am also wrong with my assumption as well.
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I heard that having Subaru as a client was a side wager at the Noise Ping Pong tournament. As Leo’s beat Us, they had the luxury of choosing to fire them…
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I guess they weren’t winning many of those pitches then.
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Makes me wonder – is there a bigger auto client they are going after and had to drop subaru before they could pitch to someone else?
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It’s good to see an agency with principles fire a crap client.
Unfortunately some other agency without principles will pick it up.
If the industry had principles Subaru would have no option but in house.
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Here’s a tip boys and girls. if you want to part ways with a client, do so quietly and professionally. Don’t go mouthing-off you ‘sacked’ them. Its not a good look, and frankly, sounds a bit churlish. I’m sure there have been times when a client has been right to sack Burnett’s. I doubt whether they told the world how useless the agency was when they did it.
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The rot set in when Leo’s lost the digital account for which they pitched to retain and lost.
That work has since been passed through two agencies.
I am not sure if the team at Leo’s who’ll be losing their jobs today will be as enthusiastic about Todd’s stance.
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@tut tut: Are you that big a numpty? It was an email to their staff, which leaked out. And so what if they announced to staff they sacked a client, their staff need to know what’s going on and better to nip it in the bud before rumours and untruth spread.
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@tut tut:
My first reaction was the same as yours: it may have been the right decision but you probably could have communicated it without saying you ‘fired’ the client.
On reflection, that was an internal email not meant for anyone outside Leo’s. While it may have been naive on Todd’s part to think it wouldn’t get leaked you have to question the type of person who’d drop him in the proverbial after he says Leo’s made the decision in order to protect their team/people. Nice way to reciprocate!!
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@tut tut, perhaps you overlooked the, ‘In an email to staff obtained by Mumbrella’ which suggests that Leos did not send this out as a press release.
Whether or not they meant for it to get out this way is for another story. Taking this at face value, it’s seems that a staff member sent this to Tim. Please save your ‘tips’ for another story.
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Hahaha “Subaru Australia’s national marketing manager Toby O’Bree was unavailable for comment at the time of going to press.”
Time to step-up Mr O’Bree we are waiting…. or will you flick it like teflon to PR and be spineless
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Love the NW style journalism. Keep it up.
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Hearty applause for the Leo crew.
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Whomever leaked that email better hope Leo’s doesn’t have a good IT guy…
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Todd is smart enough to know that the moment he committed ‘fired’ to writing it would become public. All he had to say was ‘parted ways, wished Subaru well’ and he’d look just as ‘tough’ but far more mature. But, if you think differently, fine.
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…and so showed the difference between a manager and a leader.
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Subaru deserved it, especially when they didn’t even have the courtesy to answer my query. Now what the hell’s the name of the Forester song? Who composed/sings it? Throw me a bone … someone.
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Bravo Leo Burnett!! now if only Agencies treated their suppliers well.
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Respect. And good on you for standing up for your people.
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Well done guys. This behavior from clients needs to stop. Treat your agency well, have a real marriage and greatness will happen. Look at Wieden and Nike, TBWA and Apple etc.
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Leo’s lays the smackdown on Subaru. Respect!
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He just told the truth to his staff – it was an internal note. At least they had the courage to stick up for themselves
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Was this email leaked, or “leaked” because Subaru were getting rid of Leo’s?
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Re: Name of Forester song -its not a “song”. Its a jingle recorded by eclectic specifically for the ad.
It was styled (influenced) off a 60’s mexican track.
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@comment 30: What’s the wager Sampson leaked it himself?
It’s all so Don Draper in Season 4-ish, I have a boner.
8====D~~~
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Interesting. I wonder what’s changed at Subaru?
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Like the way you make design companies and production companies pitch for free?
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Actually – Subaru asked Leo Burnett to justify the expenditure and help show ROI – they were getting sick of spending and not seeing value for money.
The answer was to get agencies to compete. Funny how all you agencies are upset now that you actually have to compete in the market place. Oh dear – now you actually have to work for a living rather than passing off this ephemeral notion of brand value to clients.
Guess what – the clients are starting to wake up!
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Notice the e-mail mentions ‘priorities’, not ‘principles’. I suppose, that way you don’t feel so bad about the money you get from selling tobacco.
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Drop your girlfriend before she drops you….This seems to be a recurring one with Leo’s
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#Amused,
Your combative attitude is disturbing and says much about how not to get the best from an agency. I don’t know if you work for subaru but if you are representative of attitudes there, well your business is in for trouble ahead.
IF the assertion about campaign-pitching is true, I sincerely hope that there is NOT a queue of agencies forming outside Subaru’s doors, all eager to be serially abused. This provides us as an industry an opportunity to show some maturity about the kind of professional standards we expect from clients.
On the question of who ‘fired’ first, it would be extremely unwise for an agency to mindfully leak the ‘firing’ of a client, knowing full well that all the ex-client has to do is refute the allegation and hey presto an embarrassing and damaging public spat ensues…as several people above asserted, ‘Todd’s smarter than that’.
I prefer to think that a bit of (unwisely) loose language was used to gee up the troops in what was genuinely meant to be internal comms. However, now the genie’s out, it might be wise for Leo’s to make a statesman-like statement about the issue.
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Normally the client ie the paying customer would fire the employee ie the agency…unless the agency was paying the client…um
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Did Todd sit in his boardroom, flick back his hair, and say it in his best Donald Trump voice?
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I think this is going to be a trend – Brand based advertising has no real measurement and agencies have never wanted to provide any link between brand values and bottom line. Recall of a song or watching a video do not mean that anyone bought the car
What agencies need to do in this scenario is charge for the ideas – that way if they do not win the campaign they still get paid for the IP – but they must be willing to justify how the idea can be tangibly measured and how it will drive bottom line
Car Advertising is about selling cars – aspirations are great but proving that you can drive the consumer into a purchase or at very least into a dealership is going to be product of next generation agencies
Figure out how to drive provable ROI or I think you are going to be firing a lot of clients
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@Mark A combative attitude is exactly what’s needed in the agency industry. Why should ad agencies be any different to other industries? Competition involves pitching against others, and the current status quo of putting an agency on retainer and just accepting great creative isn’t going to last unless the agency can prove that it’s generating sales – and more importantly, sales above and beyond the cost – ie – profit.
You seem to think that getting the best from an agency means the agency shouldn’t have to pitch. Pitching means sharpening the sword and providing a point of difference between yourself and the others. @Tony sums it up kind of nicely actually.
A “mature” industry is one that has stopped overcoming its initial problems – and if you think that the agency business has overcome its initial problems, then you’ve clearly missed the transition that agencies have made in the last 18 months to digital. I’m yet to see any of the initial digital problems overcome – and with digital platforms comes measurability – something agencies have never had to deal with.
Watch this space – there will be a queue of agencies for Subaru – agencies that are prepared to pitch and show ROI. If your business doesn’t recognise this trend, and the fact that clients are waking up, then it’ll be your business in trouble – not Subaru’s.
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Amused:
Pitching is one thing. It’s to understand a variety of areas for compatibility.
Pitching every brief is another. It suggests you don’t know your agencies, their skillsets and why they’re on your roster.
Tony:
Brand, tier 1 work can be fairly easily tracked and even given a reasonably accurate value. The problem is that it isn’t just brand ads the provide the whole brand perception, so causality can be harder to achieve.
Charging for IP is a wise suggestion, but client’s often get confused, in the “fog of marketing” as to who created the amazing ideas…
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Any agency that thinks clients are prepared to pay for ROI is not working in Australia. As a rule Australian clients say they want to reward agencies based on success but they actually work out that this might mean paying more sometimes they quickly change their tune. The digital side of the business is so pleased to deal with training, deal with the hard won expertise, deal with the increase in staff costs and then instead of passing these onto the clients they cut the price.
The best digital agencies in the US are making good money based on the fact they are prepared to deliver an ROI but they want to be rewarded for the ROI. Based on the profitability of the digital public companies, Hyro, Q and others the opposite is happening here.
I have no real idea what happened here but pitching stuff until someone likes it is crazy for both client and agency. Look at Subaru sales for the past year and it’s not exactly working for them either.
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Thank you @Adgrunt somebody here had to know what they’re on about…
Those who think all advertising is direct response obviously have no understanding about the role of brand. I suspect this lack of understanding about the role of brand might indeed be a trend – not a desirable one, but a one-eyed by-product of those who live and breathe web-based marketing; for them, indeed it’s all about response, but ask the people who run the brands they work on and you’ll get the broader view.
For them let me try to explain: for people respond to a product offer, they have to want it. Think Apple. Would you saying their brand work has been of no value or has failed to deliver ROI?
@ Amused you should read more carefully mate. I was referring to a combative attitude between client and agency as being unproductive, I didn’t say agencies shouldn’t compete – for accounts. I said they shouldn’t complete for briefs.
Let’s see if your suggestion that a bunch of digital agencies will line up for the Subaru account proves true. It doubt that will happen…as your position demonstrates, digital agencies represent only a part of the communications mix and they don’t get brand. Subaru will surely not be looking for a project-based digital agency to handle its brand… despite that model being your entire world view 😉
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Subaru ads have tested really poorly and the brand is in big decline.
The creative is woeful and Subaru know this and then you add on the poor brand work and the insane and excessive way agencies charge for every little thing – e.g. used a new pencil $100 had a coffee and thought about the client $1,000.
Agree with a previous …..dump your girlfriend before she dumps you OR it’s not me it’s you
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Wait – amonst all this waffle – did someone say Leo Burnett was responsible for the Nanny state campaign???
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With the exception of Robbie, amused and tut tut, I am gobsmacked by the naivety and conceit displayed in this comments thread. It’s patently obvious to anyone with a pr sensibility that by saying they’ll open all briefs to pitching, subaru was putting leos on notice or perhaps even constructively dismissing it.
I don’t think I’ve ever seen a more obvious case of dump your girlfriend before she dumps you!
Those of you who think agencies shouldn’t have to hustle for work but should sit on fat retainers are not living in the modern professional world. Every profession has to continually demonstrate their value and roi, why should advertising be any different?
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Gutsy decision – good one Todd!
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That floaty ad campaign for Subaru; was that by Leo’s?
Either way it was crap.
I am a Subaru driver and I feel that the brand has taken a nosedive over the last few years.
Mainly the new Outback and Liberty (products) look too family, without enough grunt(.)
That floaty campaign backed that up…
The product is the reason I stay though. Subies are so, so reliable(.)
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