Roche Macaulay & Partners is weathering the fallout from its recent resignation of Ault Foods, a client acquired when Roche merged with Lowe SMS, all of Toronto.

Roche’s sudden decision to split with Ault, which the agency felt it could not win over to accepting the merger, has added fuel to industry speculation that one or more former Lowe SMS clients are deeply concerned about the merger and may wind up pulling their accounts.

Graham Freeman, president and ceo of Ault, has publicly condemned Roche, The Lowe Group of London, Eng., which purchased a minority share of Roche last month, and Lowe’s parent company, The Interpublic Group of Companies, based in New York, for mismanagement of the account resignation.

On July 12, Freeman was embarrassed when the news that Roche had resigned his business came in the form of a phone call from Strategy, not from the agency. The day before, The Lowe Group, had issued a press release on company letterhead announcing the resignation.

When asked to comment, Freeman responded, ‘They have resigned the account according to this thing, is that what you’re saying? I can’t believe it.

‘Interpublic has found a new marriage of arrogance and ignorance that I’ve never seen before in an agency. I can’t believe this. They sent out a press release?

Freeman says he’s never heard of a client firing an agency – much less an agency resigning an account – in this manner. ‘And I’ve heard of some terrible agency firings,’ he adds. ‘I’m hearing it from a reporter.’

Freeman says at a meeting with Roche Macaulay management two days prior to the resignation, it was understood that Ault and the agency would be working together.

Ault spent $7,026,400 on media in 1995.

Andy Macaulay, Roche Macaulay senior vice-president, says the miscommunication between client and agency was not intentional.

Macaulay says the decision to resign the business was made because at the meeting with Ault it was obvious that client and agency could not have a working relationship.

‘We had a very uncomfortable meeting and that was the deciding factor for us. Everybody knew they would be very upset with the changes that happened and that we would have an uphill battle to gain their trust. Our judgment was the hill was too steep to climb.’

Freeman is not sure of what Ault will do about a new agency but is certain it will not be dealing with another that has multinational connections.

‘I would advise all Canadian companies to look very hard at the security and whether they’re going to be dropped because of some reorganization that’s been dictated out of New York or London,’ he says.

Freeman may also reconsider the company’s involvement with another multinational agency, Optimedia, the media buying arm of FCB Canada. Earlier this year Ault became part of a broadcast buying consortium at the agency along four other advertisers.

Not all of the Lowe SMS clients are unhappy about the new relationship with Roche Macaulay.

JoAnne Caza, marketing director for Mercedes-Benz Canada, says 1996 is a preparation year for the company prior to launching two new vehicles next year and she is looking forward to seeing some great work from Roche Macaulay.

Caza says, ‘We’ve had a lot of conversations with the new group. If you’re going to make it work there has to be communications right from day one. We’ve made sure of that and it seems to be working quite well so far.’ Lowe SMS in New York has the Mercedes-Benz North American account.

One casualty of the Ault resignation is Susan Andrews, Lowe SMS senior vice-president, group account director and lead person on the Ault business, who was fired following the announcement of the resignation of the account.

Macaulay says there was no job left for Andrews without Ault and he was sorry to see her go because he had originally hired her when he was at Scali McCabe Sloves prior to joining Roche.

Hertz, which spent more than $800,000 on media last year, is one of the other Lowe SMS clients said to be unhappy with the merger. When contacted, George MacPherson, national marketing manager for Hertz, refused to make any comment on the situation.

Although there are rumors of more people leaving Lowe SMS, one departure is confirmed. Jack Perone, vice-president, managing director of Outsights, made the decision to leave Lowe SMS because of the uncertainty about whether the division would survive the merger. Outsights is the consumer insight and planning unit of Lowe SMS which was set up last November.

Perone joined J. Walter Thompson last week as strategic planning director, new products.

Macaulay believes the uncertainty surrounding Lowe SMS staff and clients is perfectly natural with a merger of this kind. ‘There isn’t a business I know of that isn’t constantly faced with change. This is just, not to minimize it, a greater change in a short period of time.

‘We’re doing our best to reassure people that it won’t in any way affect the quality of work they get from our agency,’ says Macaulay. ‘There are lots of people who would love to see us fall flat on our face with this thing, either because they have been personally affected by this or because they are envious of the success of our agency.

‘So there are going to be lots of people who are going to say a lot of negative things. We’re doing our best to ignore that and keep our eye on the ball.’