What’s Next For the Clients That Fired The Richards Group?

What's Next For the Clients That Fired The Richards Group?

The rapid withdrawal of clients from the Richards Group in recent days has created painful uncertainties about the future of the agency and the fate of its 700 employees. In the highly competitive world of advertising, however, the fallout means there are suddenly a number of sizable accounts up for grabs too.

This week Motel 6 ended its relationship with long-time agency The Richards Group. The hotel brand cut ties with the Richards Group after the agency’s founder, Stan Richards, determined in an internal meeting that a campaign was “too black” for the customer.

Richards then resigned and left the agency he founded 44 years ago. Richards’ departure wasn’t enough to comfort clients, however, as a number of other brands ended their partnerships with the Dallas independent agency. Losses included The Home Depot, grocery chain HEB, Keurig Dr. Pepper and the Salvation Army.

According to Kantar Media, HEB, which has worked with The Richards Group for nearly two decades, spent nearly $ 24 million on media last year. The grocery chain recently spearheaded a customer satisfaction survey among grocers during the pandemic. The Salvation Army spent $ 10 million on media last year, according to Kantar Media.

A review has already been carried out for Motel 6

Motel 6 was in the middle of an agency review process that began earlier this summer when it first parted ways with the Richards Group, according to a spokesman. The Motel 6 representative added that the company had plans to announce a winner by the end of the year and that ending the process with The Richards Group may have accelerated the process. The motel chain also pointed out that The Richards Group, as an incumbent operator, had no advantage in this process and was weighted equally with other participants.

Motel 6 spent nearly $ 19 million on media last year. According to Kantar Media, the company cut spending to just over $ 1 million in the first six months of 2020.

Motel 6 plans to continue its relationship with spokesman Tom Bodett and has no plans to change the “We’ll leave the lights on for you” tagline with its new agency, according to a spokesman.

Will Home Depot be creative in its media search?

The Home Depot launched a U.S. media agency review last month in which the incumbent Carat was defending. According to sources with knowledge of the review, this process is expected to be completed in December. Home Depot is also currently reviewing the motif. The consulting firm Roth Ryan Hayes now has the task of helping the hardware store chain find a new creative partner and a new media agency, according to sources with knowledge of the process.

Home Depot declined to comment on finding a new partner for a creative agency at this point. Roth Ryan Hayes also declined to comment.

It is currently unclear whether Home Depot is trying to consolidate media and creative with a single holding company. While sources speculate that the process could be faster than a typical creative review, it seems unlikely that it could be completed with the expected completion of the review by Home Depot’s media agency.

According to Depotar Media, Home Depot spent over $ 444 million on media last year and just over $ 153 million in the first six months of 2020, compared to nearly $ 209 million in the same period last year.

Look for parallels in recent history

The current situation at The Richards Group may be unprecedented in recent advertising history. Still, there is a precedent for moving quickly to a new creative agency after a client ends a relationship after racist comments.

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