Tyson Foods has moved marketing contracts out of Arkansas and into Illinois — a move that could hurt advertising and marketing companies in the state.
Brian Rudisill, president of Cranford Johnson Robinson Woods’ Northwest Arkansas office, said the company had been working without a contract for several months and was among other agencies notified of the decision in December.
“As part of the acquisition of Hillshire Brands, Tyson Foods has chosen to move a majority of its marketing efforts to their Hillshire office based in Chicago,” he said in a statement. “With this decision, they will now employ the agencies currently supporting the Hillshire brand.”
Rudisill said Cranford Johnson Robinson Woods had worked with Tyson for more than 27 years.
Collective Bias, which is headquartered in Rogers, and Mitchell Communications Group, which has offices in Fayetteville, did not respond to requests for comment. Both companies have worked with Tyson, according to their websites. Both also have offices in Chicago.
When asked about the size of the contract and whether any employees would be laid off as a result, Richard McKeown, a spokesman for Cranford Johnson Robinson Woods, said it’s the company’s practice not to comment on the size of contracts or personnel issues.
Tom Finneran, executive vice president of agency management services for the American Association of Advertising Agencies, said it’s common for employees to be laid off when an agency loses a big client — especially if the agency employs dedicated staff to service that client.
“Well, if the agency lost the business, a goodly number of that direct staff would be given their walking papers,” he said. “What the agency will try to do is take their most talented employees and try to redeploy them on other clients’ business.
“No agency can afford — if it’s a big client — the agency can’t afford all that overheard.”
Dan Fogleman, a spokesman for Tyson, declined to talk about the company’s marketing contracts.
“We make it a practice not to discuss our business relationships with vendors, service providers or our customers,” he said.
Finneran questioned the decision to end relations with state-based marketing companies as Hillshire’s integration takes shape.
“It’s a personal service business so there are significant learning curve issues and foul-ups are incredibly costly to brand and corporate reputation,” he said. “It’s penny-wise and pound-foolish just to hack that off.”
Early in the Hillshire acquisition process, Tyson executives made it clear that they were taking a hard look at Hillshire’s marketing expertise.
It took Donnie Smith, Tyson’s chief executive, less than a minute to comment on marketing operations when he announced Tyson’s intent to bid on Hillshire on May 29.
“We will combine our industry-leading strength in beef and pork supply with their best-in-class brands and marketing power, creating a unique competitive advantage especially critical in times of short protein supply,” he said at the time.
And Smith spoke again about marketing later in his remarks.
“We’d like to note that we’re committed to maintaining a presence in Chicago, where we already have prepared foods production facilities,” he said. “I’d also like to say that we have a great deal of admiration for Hillshire’s marketing ability, and hope to maximize their talent within the Tyson Foods organization.”