Burger King Corp. has a new U.S. media agency of record: Publicis Groupe's Starcom. The fast-food chain has confirmed that it made the appointment this week, without a formal review. Burger King spends about $300 million on ads in the U.S., per sources.
The client's previous media agency of record was WPP's Mindshare. The client issued a statement indicating that the two parties made a "mutual" decision to part ways. But other sources said Mindshare resigned the account back in June over a number of issues, leaving BKC little choice but to reach out to another shop quickly to handle its massive account.
Starcom has a leg up in the review; it was already on the roster through its multicultural unit Tapestry, which has handled the client's multicultural assignment since 2008.
The Mindshare-BKC relationship started to "head south quickly" this year in the wake of the 2010 $3.2 billion acquisition of the quick service restaurant chain by venture capital firm 3G Capital, per sources.
Plus, BKC has been rejiggering its agency lineup over the past several months in the wake of the ownership change, which was followed by several high-level changes in its corporate and marketing management ranks, including the departure of global COO Natalia Franco. The chain is widely perceived as struggling -- last year earnings dipped 7% on a 1% revenue slide.
In March, it launched a formal review for a new creative agency. The incumbent, Crispin Porter + Bogusky, resigned the account in lieu of defending it, per usual practice. Last Month BKC tapped Mcgarrybowen to replace Crispin.
In addition to creative, CP+B also handled media-planning duties. Mindshare, which had handled buying chores up to that point, took on the planning duties after the CP+B departure. That's when things really started to go downhill between the agency and the client. "They just couldn't see eye to eye on future media marketing strategy," said one source. "The agency felt the new owners just didn't get what kind of marketing effort it would take to get the company on track."
The company rejected a number of strategic planning initiatives that Mindshare offered, and negotiations on planning fees "hit a brick wall," said a source.
In a statement, the burger chain said: "BKC and Mindshare, the company's media agency of record, have mutually decided to end their business relationship. BKC appreciates the partnership with Mindshare over the past seven years."