$156 million U of Phoenix Account Shops for new Agency

Steve’s breakdown: They say the new shop’s responsibilities will include brand advertising, TV, print, digital and out-of-home and that they are reaching out to 20 to 25 shops. Go be one of those shops!

PHOENIX, AZ: After a three-year run, San Francisco-based agency Pereira & O’Dell and the University of Phoenix are parting ways. The move comes as University of Phoenix, owned by the Apollo Group, initiated an agency review under new CMO Arra Yerganian. The agency bowed out of the review.

“I wanted to review and evaluate all of our agency partnerships,” said Mr. Yerganian, who previously held posts at Lennar Corp. and Pulte Group, and spent time at real-estate companies. He wants to take University of Phoenix to the next level, he said, and “as part of that commitment I’m only willing to work with the strongest and most creative agency partners.”

“We are reaching out to upwards of 20 to 25 agencies, all over the country, small and large,” Mr. Yerganian said. “I’m not predisposed to a particular size. We want an agency that has a soul and understands the mission-critical nature of the work we do. There are some fantastic agencies we could work with, and we’re conducting meetings over the next several weeks and months and will probably have this process wrapped up by May.”

The new shop’s responsibilities will include brand advertising, TV, print, digital and out-of-home. The company has recently hired other shops, including Market Vision, a Hispanic agency in San Antonio. “Serving the Latino community is going to be huge for us,” Mr. Yerganian said. “We have a large market share today, but we want to fortify.”

Andrew O’Dell , the CEO of Pereira & O’Dell , told Ad Age: “They have invited us to participate in the review. … But in the end, the agency made the decision that it made sense to end this portion of the relationship. I’m very proud of what we accomplished for them, and the work. I look forward to seeing the next phase. We part as friends and that’s the truth. We continue to be advocates for the University of Phoenix and are still working with them in various capacities.”

The agency is producing the Phoenix Lecture Series, featuring distinguished guest speakers.

“We value them immensely as a partner,” said Mr. Yerganian. “The team has done really terrific work.” Pereira & O’Dell ( Ad Age’s Small Agency of the Year two years ago) won the account shortly opening. The the University of Phoenix spent more than $200 million on measured media at the time.

Spending has fallen somewhat since but is still sizable; the University of Phoenix spent $156 million in domestic measured media between January and November 2011, according to Kantar.

Despite the account’s size, Mr. O’Dell says there won’t be any layoffs. “There is no impact on our current staff,” he said. “New business we’ve won has offset any revenue shortfall that would have been caused, and we’re fortunate to have that situation.”

He declined to discuss the new accounts, citing confidentiality agreements.

The move means yet another key piece of business could leave San Francisco. Omnicom Group’s Goodby Silverstein & Partners recently lost two significant accounts, Hewlett-Packard and Sprint, and that resulted in a large round of layoffs. Meanwhile, Publicis & Hal Riney is defending its biggest account, U.S. Cellular.

“It’s unfortunate, and I wish that business would stay in the Bay Area,” said Mr. O’Dell . “But there’s going to be some great, talented people available in the San Francisco market, and I believe the majority of them will be absorbed into shops in the area over the next few months,” he added. “Talented people always thrive.”


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