DP/C bows out of Walgreens review; bigger shop sought

Downtown Partners/Chicago is out.   Sources report the powers-that-be at Downtown Partners/Chicago have changed course and decided not to participate in the agency review drug store behemoth Walgreens launched just weeks ago. 

That review, about which ad trade publications have mostly kept  mum because they are not up to speed on it, promises to be one of the spring’s biggest.

DP/C’s final decision, sources say, comes after careful further consideration of the likely high cost of participating in the review and the rather slim likelihood (given the way most reviews play out) of the shop prevailing. Downtown Partners, we’re told, had certainly been invited to participate.

With this twist, that means Walgreens, the nation’s largest drug store chain, will almost certainly wind up with a new agency of record and a new creative sensibility attached to its principal advertising efforts.  This will come after a 15-year-plus run with Jim Schmidt and Joe Stuart leading the creative charge for Walgreens at Downtown Partners/Chicago, as well as at previous agencies with which both creatives were affiliated.

Walgreens, sources say, most likely is looking to align itself with a larger shop than Downtown Partners, where the full-time staff numbers under 50 people.  A RFP was sent out in late January.

Big agencies than DP/C were contacted for review

Walgreens is in a battle for pharmacy  businessAll shops that were contacted are believed to be considerably bigger than Downtown Partners.   DDB/Chicago was among those approached, but it has decided not to participate, because of a conflict with a current client, the Safeway grocery store chain.

But at least two other Chicago shops are believed to be possible contenders:  McGarryBowen and Leo Burnett.  McGarryBowen, of course, has been perhaps the hottest new business shop in Chicago the past several years.

MB has picked up a number of Kraft accounts and is now the agency of record for brand advertising for department store giant Sears.  The Disney theme park business is another major account housed in MB’s Chicago offices. MB’s New York outpost is agency of record for United Airlines, Burger King and Chase financial institution, among other major accounts.

Burnett has not been on the kind of new business roll that MB has enjoyed recently, though the agency did pick up FifthThird Bank and is working with lead shop Digitas/Chicago to help service the Sprint business, which Digitas landed in December. 

Burnett also has done some work for Walmart in recent years, which could be perceived as a possible conflict with Walgreens.  But Burnett might be willing to sacrifice any ties to Walmart to land the entire Walgreens account.

Ad consolidation could save Walgreens money

So what’s behind Walgreens’s decision to launch the agency review?  At least a couple of factors, sources say.

Not least among them is a desire to create efficiencies and lower advertising expenses — sadly something that has become a reality for many large advertisers today and an irritant to most agencies.

Because of its size, Downtown Partners was not equipped to handle many of the drug store chain’s below-the-line needs, or much in the way of digital marketing efforts — the new twist that all advertisers want in their marketing arsenal.

Consolidating all of these advertising needs under one agency roof could potentially save Walgreens some big bucks.  That could be a very welcome development for a drug store chain that is now trying to revamp its image and its product lineup, especially in the larger, high-traffic markets it serves.

Walgreens offering more prepared food options

Walgreens adds food to product lineWalgreens has recently introduced sushi, of all things, in the Duane Reade drug store subsidiary it operates in New York City,  and the company recently expanded that offering to select Chicago Walgreens stores as well.  Within the past few days,  Walgreens also said it would introduce soft-serve yogurt in its Duane Reade outlets in NYC, and the same is likely to happen selectively in Chicago.

These shifts toward more upscale lifestyle food options come after Walgreens already has moved aggressively to offer more packaged goods and refrigerated foods typically found in grocery stores.

The attempt to draw more people with a wider range of products in the front of the store also comes as Walgreens has recently lost millions of lucrative prescription drug customers in a battle for their business with pharmacy benefit manager giants such as Express Scripts, which is touting the benefits of filling prescriptions via mail order.

Whatever ad shop winds up as Walgreens new agency of record will have to help market a company that is obviously changing in many ways and battling to maintain its dominance. And it’s by no means clear, yet, whether Walgreens will wind up in a better, stronger place when the fight is over.

One thing is now apparent, though.  When the agency review is completed, Walgreens no longer will be relying on the creative smarts that Schmidt and Stuart have provided to the nation’s largest drug store chain.

Contact Lewis Lazare at LewisL3@aol.com

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