The Los Angeles-based Chiat/Day advertising agency--which rocketed to national fame by creating some of the most unorthodox and alluring commercials in recent memory--has lost its second major advertising account in less than a month.
Nike Inc., the Beaverton, Ore.-based maker of athletic shoes and apparel, announced Tuesday that it was dropping Chiat/Day and consolidating its estimated $10 million worth of advertising with the Weiden/Kennedy agency of Portland, Ore.
Nike's move was the latest in a string of upheavals at Chiat/Day, which on May 20 saw its biggest client, Apple Computer, take its estimated $50 million in advertising business to another firm. Chiat/Day executives declined to comment Tuesday on the change.
Weiden was Nike's original advertising agency when the shoe company was founded in 1979, but it had been handling only a small part of Nike footwear and apparel advertising since 1982. Chiat/Day handled the much bigger Nike brand advertising account, including the much-touted "I Love L.A." Nike commercial with singer Randy Newman.
"It doesn't surprise me; there have been lots of rumors that perhaps Nike was unhappy," said Leonard Pearlstein, head of the Keye/Donna/Pearlstein advertising agency of Los Angeles.
Chiat/Day, which has 326 employees in offices in New York, San Francisco and Los Angeles has recently been in creative and management flux as it attempts to downplay its overnight-celebrity image and promote its hands-on abilities.
In the process, Chiat/Day, whose haut monde advertising style prompted adoring fans to steal the Nike bus shelter placards of Olympic athletes, seems to have lost some of the luster that came with dozens of awards, industry analysts say privately.
The agency continues to draw big-name clients, however, including Porsche, Maxicare Health Care Plans and California Cooler, who bring with them several million dollars in advertising billings. (Billings are the cost of advertising placed through an agency. The agency typically is paid 15% of billings.)
In the last year, Chiat/Day has undergone at least three executive shake-ups that took away much of the autonomy of its three offices and concentrated oversight in the hands of Fred Goldberg, an ex-Young & Rubicam advertising executive who had been general manager of Chiat/Day's San Francisco offices. Meanwhile, Chiat/Day's highly praised pool of creative talent has lost some key staff members, including Jeff Gorman, who worked on the award-winning Nike campaigns.
For his part, Rob Strasser, a Nike vice president, said the parting with Chiat/Day was cordial.
"They did a good job, but we felt we needed more consistency . . . and more day-to-day contact" with the agency, Strasser said. "We sell a diversity of products. We need (an agency that) focused on the nuts and bolts of our products."
Dan Weiden, president and chairman of Weiden/Kennedy, expressed mixed feelings about the decision.
"I have a bittersweet reaction. I have a great deal of respect for (Chiat/Day President) Lee Clow and the work they do. You'd rather be taking business away from somebody else. But it means a lot to this agency that Nike is back. Nike is the reason we are in business today. It's nice to have them back home again. It means a lot for this part of the country."