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Fallon (US/UK)

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Fallon established a reputation as one of America's most admired creative agencies in the late 1990s, in the culmination of a process that began when founder Pat Fallon reinvented his company at the beginning of the decade, buying it back from WPP and quadrupling billings in just three years before selling for the second time in 2000, this time to Publicis That deal allowed Fallon to expand its presence around the globe with outpost such as Fallon London. By mid-decade, however, the core US agency had begun to struggle with a series of account losses, and was overshadowed by its UK office, which was then enjoying considerable critical acclaim in recent years as a result of stunning work for clients such as Sony, Orange and Cadbury. In 2007, Publicis Groupe established a closer partnership between Fallon and larger stablemate Saatchi & Saatchi under a shared umbrella structure, known as SSF Group. Fallon's performance in the US has remained bumpy since then, but the London office has suffered an alarming slump since 2010.

Clients

Click here for a Fallon client listing from Adbrands Account Assignments

Competitors

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Brand & Activities

Although it is widely admired for its creative skills, Fallon's US operations have had a bumpy ride of late, marked by senior management departures and several notable client losses. However the group developed a major presence in Europe as a result of its London office, which enjoyed an exceptionally good run between 2004 and 2009. Since then, though, the fortunes of the two agencies have reversed, with Fallon US enjoying a modest comeback, while Fallon London lost a string of senior managers and clients. Overall performance remains vulnerable to ups and downs in clients and management. Advertising Age estimated global revenues for Fallon of $44m in 2015, including $33m in the US.

Until recently, Fallon's mission statement was nothing if not ambitious: "To be the world's premier company using creativity to drive business growth and success for clients with whom we share the genetic need for excellence." However, performance in the US was weak for several years following the departure of several key members of the creative team. Group creative director Dave Lubars left the agency in 2004 to join BBDO, sparking the loss of several clients, and the following summer the two senior partners from Fallon's New York outpost also jumped ship, causing the loss of further accounts and the subsequent closure of the office. Lubars' replacement Paul Silburn was unable to fill the void, and he too left the agency in 2006. His successor, Kerry Feuerman, also lasted less than a year.

The group's main office remains in Minneapolis. It offers traditional creative advertising but also selected creatively led marketing services, such as branded entertainment. The latter unit became well-known for its creation of a series of short internet-based films for former client BMW, which generated considerable acclaim in the early 2000s. However that account departed in 2004 and the agency suffered a prolonged slump exacerbated by upheaval in the creative department as a succession of managers came and went.

By lucky coincidence, the decline in fortunes in North America was counter-balanced by an extraordinary string of successes by Fallon's subsidiary in London (see separate profile). In 2002 the group also opened several international outposts, in Hong Kong, Singapore and Brazil, mainly to serve clients United Airlines and Citi. However the loss of both accounts proved irreparable and all three local offices subsequently closed. A Japanese outpost debuted in 2003 through a joint venture with local shop Gram advertising. It was later merged with the local outpost of Saatchi & Saatchi to form SSF Tokyo.

In an attempt to provide a more lasting fix for Fallon's troubles in the US, as well as for the UK office of Publicis stablemate Saatchi & Saatchi, which had also been wrestling with account defections and management problems, Publicis Group established a closer strategic partnership between Fallon and Saatchi & Saatchi Worldwide, uniting the two brands under a single management team and umbrella entity SSF Group. That move added considerable stability to the troubled US agency, which enjoyed a much-needed resurgence during 2009. A string of small to medium account wins were capped at the end of the year by the appointment by Chrysler Group, bringing Fallon its first auto account since the loss of BMW. That account was surrendered less than a year later to allow Fallon to accept the account of GM's Cadillac, seen by the agency as a more suitable follow-up to its work with BMW. It was serviced out of a new office in Detroit. However Cadillac too called a review in 2013, and the account departed later that same year, as did another key account, Nestle Purina. The combined losses led to the departure of a third of Fallon's US staff.

At the beginning of 2017, Fallon reopened an outpost in New York following the absorption of boutique creative agency AR New York, acquired by Publicis USA in 2012. There is also an office in Los Angeles, and another in Prague in the Czech Republic (to serve European auto client Skoda).

Duffy Design was for many years the agency's design arm. Initially formed by designer Joe Duffy in 1984, working alongside Fallon, the agency became a wholly-owned subsidiary in 1994, but was sold back to management in 2004. Fallon Brand Consulting was formed in 2000 to offer clients strategic brand planning as well as creative support. This too was later sold to managers and now operates as Tait Subler.

Background

The Minneapolis-based agency was originally created out of an informal partnership between Martin/Williams executive Pat Fallon and Bozell & Jacobs creative director Thomas McElligott. After working out-of-hours on private projects since 1974, the pair decided to set up on their own in 1981 with three other partners, Nancy Rice, Fred Senn and Irv Fish. They launched as Fallon McElligott Rice, with the promise they would be "A new advertising agency for companies that would rather outsmart the competition than outspend them." Although art director Rice also got her name above the door, both she and McElligott subsequently left the company, which was renamed Fallon McElligott. (McElligott's name remained on the board for another 20 years. He initially went to Chiat-Day Mojo in 1988, before founding McElligott Wright Morrison White in 1990. He retired in 1992.)

The agency began with a collection of small, mostly local clients looking for national coverage. The Wall Street Journal was an important early win, as were Rolling Stone (its very successful "Perception/Reality" series depicting the magazine's typical readers) and Lee Jeans, although all three later moved on. In 1986, Pat Fallon succumbed to the temptation of getting bigger faster and sold out to New York-based parent shop Scali McCabe Sloves, then owned by Ogilvy & Mather. In the early 1990s, both SMS and Fallon McElligott ended up as part of WPP, following the latter's acquisition of Ogilvy. But the quality of Fallon's work was slipping. In 1992, the agency lost out on a series of pitches, and Pat Fallon decided to take stock of his situation. The following year, the company borrowed $14m to buy itself back from WPP, and bring on a new, more high-powered management and creative team. (Scali McCabe Sloves was also sold off by WPP, eventually becoming the US HQ for Lowe Group).

The newly liberated Fallon McElligott went from strength to strength, with billings jumping from $154m in 1992 to $486m by 1997. An important step was the win of the BMW US account in 1995. The launch campaign for the US-made Z3 roadster won many plaudits, and paved the way for a series of further wins. Also in 1995, the company established a presence in New York. Fallon McElligott Berlin was originally a joint venture with creative director Andy Berlin, but Fallon and Berlin fell out two years later after the latter tried to increase his stake in the shop. (Berlin left to launch what became Berlin Cameron United).

The win of the United Airlines account in 1996 was another key gain, Fallon's biggest ever new business win. What made it all the more satisfying was that Fallon was the black sheep on a pitch list that included incumbent Leo Burnett. By sheer coincidence Fallon also won two other pieces of business off Leo Burnett in the same year - part of the McDonalds account (later resigned), as well as another key account, Miller Lite, worth $130m. (The latter was later lost to Ogilvy & Mather in 1999).

In 1998 the win of the $20m pan-European Lee Jeans account inspired the agency to open a London office, as a joint venture with a British management team. Unlike other US agencies who opened US offices that year (notably Wieden & Kennedy), Fallon UK had a great starting run, picking up a series of good accounts. Its success naturally inspired Fallon to think of a larger network, and in February 2000 the agency announced its acquisition by Publicis. This gave Fallon backing to establish satellite offices around the world, as well as access to Publicis-owned media operation Optimedia. No financial details of the deal were announced but industry speculation put the price at between $100m and $150m. Almost 20 years after the departure of Tom McElligott, the agency finally shortened its title from Fallon McElligott to Fallon Worldwide in May 2000.

The international network finally began to take shape in October 2001, when the agency said it would launch Sao Paulo, Singapore and Hong Kong outposts. The three agencies opened for business in January 2002 as joint ventures with local management, similar to the successful London office. That outpost received a huge boost towards the end of 2002 when it won the pan-European Sony Electronics account, out of Saatchi & Saatchi. Shortly afterwards, a Tokyo office was added to the portfolio.

In 2003 and 2004, the agency broke new ground and encouraged many imitators with the launch of a series of short artistic films on behalf of BMW, and followed up that success with a similar campaign for Amazon. Yet 2004 and 2005 were marked by the loss of creative directors Dave Lubars in Minneapolis and Ari Merkin in New York, and the subsequent departure of several key clients in the US, including BMW, Dyson and Sony. Stability began to return to Fallon's North American outpost in 2006 following the appointment of creative director Kerry Feuerman. However the loss of both United Airlines and Citigroup in 2007, as well as the failure to convert a pitch for Volvo, led to the departure of Feuerman as well.

Pat Fallon retired at the end of 2007, relinquishing day-to-day control to a new SSF Group management team. He retained the title of chairman emeritus until his death in 2015. Mike Buchner became CEO in 2011. His brother Rob Buchner, previously chief marketing officer, moved to crosstown rival Campbell-Mithun two years later.

Last full revision 28th April 2017

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