McKinney loses Audi account

A San Francisco agency lands the Durham agency's longtime account

Durham advertising agency McKinney is losing one of its oldest and largest clients: luxury carmaker Audi of America.

The account, which industry publications estimate is worth $70 million or more in billings, moves to Venables, Bell & Partners in San Francisco.

McKinney has had the Audi account since 1993, but the switch isn't unexpected.

Audi decided in September to let other ad agencies compete for the business, a process known as putting the account up for review. Audi said at the time that the review was initiated by Audi's chief marketing officer, Scott Keogh, who joined the company in June from rival Mercedes-Benz USA.

When an account goes up for review, it's rare for the incumbent agency to get the business.

Reji Puthenveetil, a partner in the Raleigh office of ABA Consulting, which works with ad agencies, said losing an Audi-size account can lead to layoffs, but job cutbacks aren't a given. A key factor would be how successful McKinney has been in winning new clients and gaining business from existing clients in recent months.

"Turnover happens," Puthenveetil said. "You just have to find another large account." But accounts the size of Audi's "are hard to come by," he said.

McKinney declined to address the implications of losing the account.

McKinney has expanded rapidly, from 160 employees in October 2004 to 250 employees. Last year the company posted $36 million in revenue, up 50 percent from a year earlier. Ad agency revenue typically amounts to 10 percent of billings.

McKinney recently attracted a new client: Select Comfort, the maker of the Sleep Number mattress and the nation's top bedding retailer. Trade publications estimated that account at $10 million and $20 million in billings. A spokeswoman for Minneapolis-based Select Comfort said at the time those numbers were wrong, but declined to disclose the actual amount.

McKinney crafted the "Audi: Never Follow" theme for the car company.

"I think they did good work for Audi," Puthenveetil said.

McKinney CEO Brad Brinegar was not available for comment but released a statement: "When McKinney won the account in 1993, Audi was on its way to being pulled from the American market. Since then, we have helped them rebound to become one of the premier brands in its category, growing 12 of the past 13 years, posting record sales in five of the last seven years (including 2006), growing to seven times the size it was when we were hired. We wish the very best to the many friends that we made at Audi over the past 13 years."

Audi sales in the U.S. market rose 4.9 percent during the first nine months of this year.

Johan de Nysschen, executive vice president in charge of Audi of America, said in a statement that the ad agencies that were finalists for the account all presented "strong, creative concepts." But Venables, he concluded, demonstrated that "they are the right advertising and marketing partner" for the automaker.