Leo Burnett: The Ad Agency Philip Morris Loves To Call For

Forgive some of New York's top ad executives if they seem just a bit ruffled by the rise of Michael Miles. After all, the new chairman of Philip Morris Cos. controls the nation's largest advertising budget: In 1989, the company spent $2.07 billion to promote everything from Marlboro cigarettes to Velveeta cheese. What's more, he began his marketing career at--of all places--a Chicago ad agency.

From 1961 to 1971, Miles was an account manager at Leo Burnett Co., the agency that created such marketing icons as the Pillsbury Doughboy and the Jolly Green Giant. His younger son, Christopher, is now an account executive at Burnett, which is the 13th-largest U. S. agency, with billings of $3.6 billion.

MENDING MISSTEPS. While Miles spent most of his time working on Procter & Gamble products, his colleagues were crafting the legendary Marlboro Man campaign for Philip Morris' stalwart cigarette. Marlboro's cowboy has since become the keystone of a durable and lucrative relationship between Philip Morris and Burnett. "The company has a tremendous bond with the agency," says Joel D. Weiner, former executive vice-president for marketing services at Kraft General Foods Inc.

Philip Morris entrusts Burnett with many of its top brands besides Marlboro: Merit and Virginia Slims cigarettes; Velveeta cheese; and Miller High Life and Meisterbrau beers. The agency coined the slogan "You've Come a Long Way, Baby" to sell Virginia Slims, and conjures up warm images to get beer drinkers to "Buy That Man a Miller." Such work has led Philip Morris to assign Burnett a stunning $700 million in media billings.

Lately, that bond has become even tighter. In the last year alone, Philip Morris awarded the agency $105 million worth of new accounts, including Kraft Real Mayonnaise, Bucks cigarettes, and Miller Lite. More important than the money is the message: Mf its dozen ad agencies, Leo Burnett has become the shop that Philip Morris calls on to fix its marketing missteps.

Take Miller Lite. While still the nation's second-best-selling beer, the brand's growth has slowed as the average age of its drinkers has increased. So Philip Morris pulled the $70 million account from longtime agency Backer Spielvogel Bates Worldwide Inc. and assigned it to Burnett. The agency had been sketching proposals for Lite ads even while Backer had the account.

The same with Benson & Hedges cigarettes. As smoking becomes more of a downscale habit, the brand's image of elegance has become outmoded. Ad agency

Wells, Rich, Greene Inc. had created such enigmatic ads as one where a man clad only in pajama bottoms grins sheepishly at a group of women. But that didn't prevent its U. S. market share from sliding from 4% to 3.6% in 1990. So Philip Morris has been shifting assignments to Burnett. The agencies won't comment, but executives at other shops with tobacco accounts predict Burnett will soon pick up the entire account.

Burnett has helped revive flagging food brands such as Kraft's Velveeta cheese. And it is now working to build the market share of Kraft Real Mayonnaise on the East Coast, where it lags behind archrival Hellman's. Not all of Burnett's repair work has succeeded: Despite its warm ads for Miller High Life, the brand's share has continued to slip.

To be sure, Philip Morris has strong relationships with other agencies, including J. Walter Thompson Co. and Young & Rubicam Inc. Last year, Kraft General Foods gave its $80 million Maxwell House coffee account back to agency Ogilvy & Mather Worldwide Inc. after moving it to another agency. And Burnett Chairman Hall ("Cap") Adams Jr. says even with an alumnus in the top job, Philip Morris won't necessarily favor his shop for new business: "That can work both ways. He could also bend over backward to be fair to all the agencies."

Still, advertising veterans insist that Philip Morris has an affinity for Burnett's homespun advertising style. "They feel Burnett knows how to touch the heartland of America," says George Lois, chairman of Lois/GGK. Now, with a former colleague at the helm of its mainstay client, Burnett's rivals are betting that the lovefest will ripen even further.

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