Broadcasting Telecasting (Oct-Dec 1957)

ADVERTISERS & AGENCIES CONTINUED KUDNER LOSES BUICK, $23 MILLION • Agency reshuffle, retirement plans of President Ellis follow • History's biggest account loss ends 22-year association In what is believed to be the largest account loss in history, the Buick Division of General Motors Corp., Flint, Mich., last week announced the termination of its 22year association with Kudner Adv., New York, touching off a chain of events that included the projected retirement of J. H. S. Ellis, Kudner president, and a realignment of the executive staff of the agency. The account bills an estimated $23 million, representing about one-third of Kudner's overall business. Although reports circulated that Buick's defection could deal a death blow to Kudner, which has lost other substantial accounts in recent years, a spokesman for the agency said unofficially that its personnel "is not completely dispirited" and expressed confidence that the agency would "bounce back, as we have done in the past." In its announce MR ELL1S ment, Buick made no mention of a successor to Kudner but noted the company has "several agencies in mind." The development precipitated a current of speculation and rumor as to the reasons for Buick's disenchantment with Kudner after 22 years and about the agencies said to have the inside track as possible successors (see facing page). Buick's decision, announced Monday by E. T. Ragsdale, general manager of the division and a General Motors vice president, was followed on Tuesday by news of Kudner's reorganization plans and on Wednesday by Mr. Ellis' announcement that he plans to sell out and retire. Although the announcements from Kudner did not tie the developments there with the loss of the Buick account, there is little doubt that the reorganization plans within the agency are traceable to the decision of the automobile manufacturer. Mr. Ragsdale's brief announcement said the move is being made with "extreme regret," and added: "Kudner has handled the Buick account for 22 years in a manner that has brought credit both to the agency and ourselves. But I feel it is now in the best interest of both parties that Buick seek advertising elsewhere." No definite termination date with Kudner has been set. An agency spokesman said this means Kudner will continue to receive billing on the account for the remainder of the 1958 auto model year, running to October. Though no reason was given for the move, it is known that one source of irritation to Buick has been that it lost third place in auto sales in 1957 to Plymouth (Ford and Chevrolet are rated No. 1 and 2). Friction also arose between Buick and Kudner last August when, during the telecast of the heavyweight championship bout between Floyd Patterson and Tommy (Hurricane) Jackson, an announcer injected a commercial for Buick the instant the bout was stopped and before Floyd Patterson was declared the winner. At that time, Mr. Ragsdale apologized to the public for "the inept handling and bad timing of the commercial." Although Kudner blamed NBC-TV for the intrusion and the network, in turn, blamed the agency, Buick reportedly felt that Kudner had to bear responsibility for the fluff. Mr. Ellis would not comment on the loss of the Buick account. Other officials of the agency would not comment directly on the development. One spokesman said that "no one likes to lose an account, especially one like Buick, but we all feel that now we must work harder than ever to land new business." Advertising industry leaders could not recall a larger account that has been dropped. The loss overshadows by far those of D'Arcy Adv., which lost approximately $15 million in annual billings in the transfer of the Coca-Cola Bottling Co. account to McCann-Erickson two years ago, and of Foote, Cone & Belding which surrendered the estimated $10 million American Tobacco Co. (Lucky Strike) account to BBDO in 1948. The deflection of Buick comes on top of the loss by Kudner of the substantial Texaco account early in 1957 to Cunningham & Walsh (estimated billing: $5 million). But a Kudner spokesman said part of this loss was recouped during 1957 through the agency's acquisition of the General Telephone Corp. account (estimated billing: $2 million) and the Clipper Cargo Div., Pan American World Airways (estimated billing: $750,000). There was no indication that Kudner would lose other General Motors accounts. It handles the advertising for the Frigidaire Div., the GMC Truck & Coach Div. and the institutional advertising for the parent company, General Motors Corp. Its other larger accounts are National Distillers Corp. and Goodyear Tire & Rubber Co. An agency spokesman said the Buick loss is not likely to affect any of the other GM business since, he said, the various GM divisions operate autonomously, with separate advertising departments. During the past year, Buick sponsored the Patrice Munsel Show on ABC-TV and Wells Fargo on NBC-TV, both on alternate weeks, and spent a limited budget in spot radio. Despite the loss of Buick, there are no immediate signs that Kudner is thinking in terms of a substantial reduction of its staff, according to a spokesman. He pointed out the account "is going to be in the shop until the fall." Earlier this year, another automotive account, Studebaker-Packard, shifted its approximate $8 million business from Benton Page 34 December 23, 1957 & Bowles, New York, to Burke, Dowling, Adams, New York. The day after Buick's decision, Mr. Ellis announced a realignment of Kudner's executive staff and on Wednesday revealed his own plans to retire and sell his interest in the agency. Mr. Ellis, 64, reported he plans to complete the sale next month under an agreement restricting his sales negotiations to other executives of the agency. Mr. Ellis stressed, however, that he has not decided when he will retire and indicated his departure from the agency is not imminent. He added that he plans to reinvest the proceeds from the sale in timber land he owns in Virginia, where he will make his home when he leaves the agency. As part of the realignment move, Mr. Ellis announced the resignation of Myron P. Kirk, senior vice president and director of radio and television. Mr. Kirk said his resignation "had nothing to do with the Buick loss," adding that he had offered to resign a year ago, at which time he sold his 10% interest in the company. At that time, Mr. Kirk continued, his resignation was not accepted. It was understood Mr. Kirk's reasons for wanting to leave Kudner were connected with his growing interest for the past several years in the Broadway theatrical field, to which he wants to devote more time. Top-level changes announced by Mr. Ellis cover the election of Paul E. Newman, general director of the art department and senior vice president, and C. M. Rohrabaugh, vice president, secretary and director of account management, as executive vice presidents, and of Donald Gibbs, a board member, as a vice president. Mr. Gibbs was named to handle temporarily the duties relinquished by Mr. Kirk. Mr. Newman and J. W. Millard, vice president and account manager, were elected to the executive committee, of which Mr. Rohrabaugh becomes chairman. Other members of the executive committee, which assumes all managerial responsibility for the agency, are Mr. Ellis, Charles R. Hook Jr., Vincent F. Aiello and William J. Griffin Jr. Client, Agency Growth Causes Breakups — Bolte What causes breakups in long-term agency-client relationships? It's the unparalleled and unprecedented growth of companies and coincidentally of the agencies, according to Benton & Bowles Executive Vice President Brown Bolte. Mr. Bolte spoke Tuesday before the Radio & Television Executives Society's timebuying and selling seminar in New York. His opinion on advertiser-agency severances came after his formal speech (subject: "Why Clients May Seem Peculiar") and during a question-answer session. The speaker pointed out that today the Broadcasting MR. BOLTE