DDB's Blockbuster Win May Be Pyrrhic Victory
Blockbuster halted trading in its stock — it was down to just 13 cents — and is exploring brankruptcy, according to Bloomberg. Which is bad news for DDB Worldwide, which just won Blockbuster’s ad account.
True, the account was only $12 million in billings even before the bottom fell out. And DDB must have known that the ad budget would continue to be limited. Blockbuster has yet to report is Q4 2008 numbers, but looking at the advertising line on its Q3 statement, you can see that the total pie was cut by a third in the first nine months of 2008. (”Advertising” on this release seems to imply all forms of promotion, not just above-the-line ads.)
DDB must now begin worrying about Blockbuster’s creditors, who may want input into the company’s turnaround. One question they might well ask, Is it cheaper or more expensive for DDB to form its own dedicated Enfatico-style unit to service Blockbuster, as DDB has done?
Lastly, if this delays work — and thus billings — on Blockbuster, folks at DDB will have a right to be pissed at their client. They opened the review in 2007, held presentations in March 2008, and didn’t pick a winner until a few weeks ago. That’s a lot of work to go through without having anything to show for it.
And now this.
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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