The Minneapolis firm privately called the stunning blow “an outcome we do not deserve.”
Fallon’s great date with Cadillac is over.
The Minneapolis ad agency and the iconic American luxury vehicle maker have parted ways after a nearly three-year relationship, with Cadillac deciding to go in a different marketing direction.
Losing Cadillac is a stunning blow for Fallon, which once handled Porsche, performed award-winning work for BMW and resigned its account with Chrysler in 2010 to take on the General Motors opportunity.
The agency has publicly been circumspect in its reaction to the Cadillac news.
In a statement to the Star Tribune, Fallon CEO Mike Buchner said, “We are exceptionally proud of our Cadillac work and the phenomenal business results it achieved. The brand has momentum that it didn’t have when we took on the account almost three years ago and that will serve Cadillac well as it moves forward.”
However, in an internal memo to Fallon employees, Buchner said, “This is an outcome we do not deserve.”
According to Advertising Age, which obtained a copy of the memo and which was confirmed by the Star Tribune, Buchner also wrote, “The fact of the matter is that we took a brand that was emerging from bankruptcy, gave it a differentiating positioning, brand identity and voice, and made Cadillac the fastest growing major car brand in the United States.”
Fallon declined to make any of its executives available for comment.
Cadillac awarded its $200 million plus advertising account last week to a three-agency team from the Interpublic Group. The agencies, Detroit-based Campbell Ewald, Boston-based Hill Holiday and London-based Lowe, formed a hybrid agency called Rogue to handle the Cadillac account.
John Purdy, an advertising and public relations professor at the University of St. Thomas, called the agency-client split “a sad day for Fallon and a sad day for the Minneapolis advertising community.”
“It’s good to have those marquee accounts, because it reflects on the whole market,” Purdy said. “It hurts a bit.”
Loss of a big account such as Cadillac often means layoffs in the advertising world, although Fallon has been mum on that topic.
“There’s only one variable cost that you can address and that’s people,” said Purdy, an agency alumnus.
But University of Minnesota brand strategy professor Jennifer Johnson said winning and losing accounts is part of the game in the advertising world.
“It takes a lot of guts to be in it and stay in it,” said Johnson.
She said an agency with Fallon’s sterling reputation will find other high-profile business clients.
Johnson noted that agencies always anticipate these things and that they don’t immediately start cutting people. “They look for the next business win and you have to have the horses for that,” she added.