If there is a lesson to be learned in the four-year tenure of David Lubars as both creative director and chief executive of L.A.-based BBDO West, it's that outstanding creative types don't always make outstanding business managers.
Lubars, 39, announced last week that he is leaving West L.A.-based BBDO West in June to become creative director of the well-regarded Minneapolis agency Fallon McElligott.
BBDO West had mixed results since Lubars was named CEO in 1994. The agency won a slew of industry awards and landed a number of high-profile clients, but it also lost its two biggest creative accounts.
"Most good creative people are not true business managers who know how to control fixed and variable costs, nor should they be placed in that position because it detracts from their primary mission and focus, which is creative," said Michael Marsak, a consultant who helps connect advertisers with agencies. "They shouldn't be looking at spread sheets, they should spend more time looking at spread ads."
That consensus was echoed by the heads of several ad agencies in L.A., who seem to universally respect Lubars' creative talents while shaking their heads at his business losses.
BBDO West's press materials say it picked up $180 million in billings in 1997 under Lubars, adding new accounts by such big players as Metro-Goldwyn-Mayer Inc., Starbucks Coffee Co., Best Western motels and a new soft drink from PepsiCo.
By far the largest portion of that new business, worth an estimated $100 million in annual billings, is the MGM account. But the number is deceiving. MGM is strictly a media-buying assignment, which brings in only about 2 percent to 3 percent of billings, compared with the 12 percent to 15 percent that's taken in when an agency handles both creative duties and media buying.
Meanwhile, BBDO West's two biggest creative accounts both went into review under Lubars: Apple Computer Co., worth an estimated $70 million to $100 million in billings, and LA Cellular, worth an estimated $20 million. BBDO opted not to participate in either review, and so it lost both accounts.
"David Lubars is not leaving BBDO West in as good a shape as it was in when he found it," said the head of one large local agency. "In effect, he could not get business."
Lubars scoffs at such criticism.
"I think my business legacy is that we went from a one-account office, Apple, to an office with an array of clients that does quality work across the board," he said.
Lubars also notes that he is making a substantial step up the ladder.
"As great as our agency is here, it is a branch office, and to go to a headquarters at that level is really an honor and a privilege," he said.
Lubars' move to Fallon McElligott is considered a smart one, both for the Minneapolis agency and for Lubars.
Fallon, which handles Miller Lite beer and BMW of North America, has grown from $150 million in billings to $500 million in the past five years. It conducted an 18-month search to find a replacement for Bill Westbrook, who has been serving as both creative director and president of the agency. He will continue as president, but was looking to hand off the creative duties to someone else.
"This job frees (Lubars) up to do what he does best, which is creative," said another local agency head.
Perhaps the best measure of BBDO West's fiscal health is a look at its staff. Billings figures are easy to manipulate and can be a deceptive way of measuring the success of advertising agencies, but most agencies need about 1 employee for every $1 million to $1.5 million in actual billings, according to several local agency heads.
BBDO West reported 190 employees when it still held the Apple account in 1995. At the end of 1997 it reported 154 employees, and BBDO West officials say they currently employ 175 at the division's two offices in L.A. and San Francisco.
Tom Carey, president of BBDO North America in New York, said the West division has made "not huge, but good" progress in winning new business. "I think the good news is that the company got much more focused and organized (under Lubars)," he said. "It raised the quality of its product and its thinking."
Lubars will be replaced as CEO of BBDO West by Tom Hollerbach, an account manager who has never worked on the creative side. He was formerly executive vice president and the agency's general manager, meaning he oversaw such business functions as account management, client negotiations and media buying. Before coming to BBDO West three years ago he was group account director overseeing the famous "Got Milk?" campaign and other high-profile accounts at San Francisco-based Goodby, Silverstein & Partners.
"I think the reason they chose me is that I have a pedigree of working with creatives," said Hollerbach, who like Lubars is 39. John Hage, who recently joined BBDO West from the Los Angeles office of DDB Needham, has been named the agency's new creative director.
Whenever there is a major management shift at a large advertising agency, competing agencies soon begin circling overhead in an effort to pick up clients. At least one local competitor has already begun contacting BBDO West's accounts.
"There's no leadership over there, nobody left," said the agency's chief. "We're meeting this morning figuring out what accounts we should go after."
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