Dallas advertising executives are concerned about ripple effects by the region’s creative community from the big-time loss of advertising agency marquee clients.
The Richards Group, the largest ad agency with Dallas headquarters with nearly 650 employees, expects to reduce staffing as a matter of fact this week’s extensive shift of long-time clients to tidy up its bottom line. The defections followed an outrage at founder Stan Richards describing a new ad campaign idea as “too Black” for the Carrollton-based budget chain Motel 6.
Owen Hannay, chief executive of Dallas-based ad agency Slingshot, is concerned that The Richards Group will have to put “hundreds of employees in an advertising community who do not understand them.”;
“And that’s just the Richards Group, people,” he said. “You started looking at editing companies, freelancers, shooters. … The advertising service business side beyond agencies will suffer terribly because they can’t replace that business.”
Richards’ 44-year run at the helm of his namesake agency abruptly ended Thursday, when he effectively fired himself into the unspoken remarks he made in an internal meeting with nearly 40 employees.
After making his comments public, Motel 6 immediately fired at the agency and ended a week of bleeding that saw half a dozen well-known brands and the Salvation Army charitable organization separated by ties to the company. Many have worked at The Richards Group for decades.
Hannay said it is very likely that a national client like home improvement retailer Home Depot will take on another Dallas agency.
The client canal can also reach the creative companies Richards has worked with over the years along with other advertising professionals, said Leon Banowetz, president and owner of Dallas ad agency Banowetz + Co.
Richards toured a multicultural agency called Richards / Lerma with veteran veteran Pete Lerma in 2009. The agency renamed its first year in simple Lerma. Two weeks ago, Richards Group veterans Pete Lempert and Dave Kroencke launched a new consulting group called Richards Venture.
“When something like this happens in a corner of our community, it affects all of us,” said Hawkeye agency CEO Joe DeMiero, describing Dallas’ creative and advertising community as closely intertwined.
Hawkeye has approximately 250 employees in Dallas and a total of 931 spread across 22 offices around the US
In Dallas, it is common for creative professionals to flow between The Richards Group and Hawkeye during their careers and vice versa, DeMiero said. He said he thinks his agency could accommodate some Richards staff.
“If there is any silver line in what is a horrible situation, it is that more clients are asking that their partners’ values conform to their values, ”DeMiero said.
The 38-year-old executive said he also saw a change in how companies view their relationships with ad agencies.
Hawkeye, one of the largest agencies in Dallas, added 18 clients to its business during the COVID-19 pandemic and almost all the necessary data or a commitment to diversity and integration, he said.
“Transforming the creative industry will require the part of the buyer that demands it on the supply side, and the supply side increasing and meeting the demands in a timely manner,” DeMiero said.
The University of Texas at Austin, where an advertising and public relations school was named Richards, on Friday issued a recorded apology from Richards to the university and its students. He said in the video that he did not allow racial discrimination and did not allow white supremacy, but acknowledged that what he said was the biggest mistake of his life.
“At that moment, I lost years of trust,” he said. “I can hide from it, but I believe it is better to own it.”