Echoes of the now-infamous Labatt agency review of 2007 are still reverberating, having already caused an avalanche that changed the landscape of beer marketing in Canada. In November, with every big-name Labatt brand up for grabs, agencies scrambled to defend their portfolios and snatch what new work they could.
Some refused to play along. Lowe Roche, for one, declined to defend its Stella Artois account. Others, like Capital C, jumped late into the fray and surprised everyone by appearing on the short list.
But one agency has become the avalanche’s casualty. DDB Canada’s Downtown Partners in Toronto was fired by Labatt, losing Budweiser, Bud Light and Alexander Keith’s-work for which it won Cannes Lions and popular acclaim-without a chance to defend the account.
Downtown opened in 2001 with Labatt as its first client. It quickly earned a reputation as a creative powerhouse, creating the still-popular Bud Light Institute campaign and the King of Beers concept for Labatt’s partner, Anheuser-Busch. Downtown also produced the “Good Dog” Super Bowl spot for Anheuser-Busch in 2004, which USA Today rated as the best Bowl spot that year.
But after watching from the sidelines as its beer portfolio was divided between Grip Limited and Publicis, there wasn’t enough business left in the stable to keep the agency viable. Having lost 40% of its revenue and more than three-quarters of its staff almost overnight, Downtown Partners is shutting its doors this month.
Frank Palmer made the final call. As president of DDB Canada, he consulted for weeks with Dan Pawych, Downtown’s creative director, and DDB Worldwide senior execs in New York on how to keep the business afloat.
The closure, announced in late January, came two months after Palmer proclaimed the agency would remain open despite the loss of Labatt. At that time Pawych told Marketing the shop was “really busy” working on clients such as Prime Restaurants, Gatorade and the 2010 Vancouver Olympics, an account it partnered with Vancouver-based Hyphen Communications and Montreal’s Bleu Blanc Rouge to win.
After the loss of the Labatt business, Downtown’s first move was one of defiance. The agency ran full pages in major daily newspapers that read “To prove we’re still making ads, we made an ad.”
Behind the scenes, however, Palmer acknowledged layoffs were a possibility. “We are trying to do everything possible not to have [layoffs] happen,” he said at the time. But they did happen, and thus began an exodus.
At the beginning of November there were 40 staffers at the agency. Those not given severances began finding work at other Omnicom agencies, or heading to other shops with referrals in hand. By the end of January, the agency had only eight employees.
“We fought to regain control again and service our existing clients,” said Pawych the day the closure was announced. “We were trying everything possible to pitch the existing business and give [clients] options on how we can run their businesses with the smaller unit.”
It didn’t work. In a release, Pawych stated that “the remaining accounts didn’t provide a strong enough revenue base to continue long-term operations.”
The closure will not affect Downtown Chicago, which carries a separate stable of clients. Downtown’s Toronto office will continue to work on existing client projects until Feb. 15, but at press time negotiations were underway to find homes for each client within the Omnicom network.
There is a chance that Downtown will appear again on this side of the border. After taking a long break to make up for the Christmas vacation he was denied last year, Pawych says he’s interested in maintaining a relationship with Omnicom and may work with it to “figure out if there’s anything else we can do, whether it be jump-starting another agency or bringing Downtown back in some form or another.”
