Dive Brief:
- Domino's tapped Boulder, Colorado-based independent agency WorkInProgress as its new agency of record (AOR), dropping MDC Partners' Crispin Porter Bogusky (CPB) after 13 years, according to a news release. WorkInProgress will take over creative execution, brand strategy and digital design for the pizza chain starting in January 2021 as part of a three-year contract.
- Domino's paid tribute to the work produced by CPB during a decade-long partnership, including an iconic "Pizza Turnaround" campaign and advancements in competitive technology areas like e-commerce. But Art D'Elia, Domino's new marketing chief, said that WorkInProgress' independent status gives it an agility the company needs now.
- An AOR switch-up is one of the first big moves from D'Elia since his promotion to chief marketing officer in August. The news stands as a potentially grim portent for large agency holding groups like MDC Partners, which have seen losses mount under the pandemic.
Dive Insight:
Domino's ditching longtime partner CPB in favor of an indie shop marks one of the more notable agency shakeups to occur in recent months. CPB's contract was up at the end of the year, but Domino's reasoning on the decision not to renew keys into how CMOs could be changing their thinking around partnerships as a result of the pandemic, with large agency groups losing out.
In announcing the change, D'Elia sent a clear signal that Domino's is looking to alter its agency working model in significant ways as the COVID-19 health crisis wears on and continues to pressure companies — particularly in the restaurant category — to adjust quickly to shifting consumer needs. WorkInProgress was founded by former CPB members who worked on Domino's account for more than six years, per a bio on the company's website.
"The fact that they are an independent agency means they have the flexibility and nimbleness we need during these quickly changing times," D'Elia said of WorkInProgress in a press statement. "This is the right agency model and team for Domino's moving forward."
Growing favor for independent agencies spells bad news for large holding groups, which were already facing significant challenges prior to COVID-19 and have seen their growth prospects further diminish as the virus' negative economic impact settles in. MDC Partners reported that organic revenue fell 16.4% in third-quarter earnings released last week, a drop largely in line with rivals.
Well before the pandemic, agency networks were criticized by some marketers for having cumbersome and inefficient structures. Those weaknesses have grown more pronounced as marketing functions like campaign production and media planning are executed on shorter timelines to account for a particularly volatile period.
Work sent to in-house and boutique teams is at the same time on the rise, according to some industry analyses. Domino's switch to four-year-old WorkInProgress stands as one of the higher-profile examples of the latter trend, and is noteworthy because CPB held AOR duties for an unusually long time, proving instrumental to turning Domino's into the largest pizza chain in the world based on global retail sales.
With CPB's help, Domino's adopted technologies like e-commerce and digital ordering platforms well before many competitors, giving it a leg up as those channels became enshrined as must-haves for restaurants. The MDC shop was also responsible for "Pizza Turnaround," a decorated campaign that openly acknowledged Domino's pizza quality was not up to snuff, and that the company was working to reinvent itself.
That reinvention ended up paying out in big ways that are still apparent today. Last month, Domino's reported its 38th consecutive quarter of same-store sales growth, a key metric of business health for restaurants. Same-store sales were up in the U.S. 17.5% year-on-year as people continued to order in during the pandemic, showing how Domino's earlier bets on technology have fortified its position in the pizza category as delivery and takeout surge among homebound consumers.
