Little Caesars and Longtime Ad Firm Slice Their Ties

Little Caesars has parted ways with the New York advertising agency that created the much-celebrated “Pizza! Pizza!” campaign amid flat sales, increased competition and a shrinking ad budget.

Cliff Freeman & Partners, which has handled the account since 1986, withdrew from the running after the private fast food pizza chain began an agency review last month. The split terminates what some consider one of the industry’s most successful advertising partnerships.

The award-winning Little Caesars campaigns transformed Freeman, a unit of Saatchi & Saatchi, from a little-known agency to a rising star on Madison Avenue. At the same time, the humorous pizza campaigns elevated Detroit-based Little Caesars into one of the nation’s leading pizza brands, behind Pizza Hut and Domino’s.

“This is one of the most difficult decisions I have had to make on both a personal and professional level,” Cliff Freeman, chairman and chief creative officer, said in a statement. “Together, we took the Little Caesars brand to dizzying heights. However, today the Little Caesars brand faces a myriad of business challenges that impact their business both now and in the future.”

Initially, Freeman agreed to participate in the agency review, along with Fallon McElligott, Grey Advertising and Bozell Worldwide. But he changed his mind.

Freeman, in his statement, did not offer details about why the relationship soured, only to say, “Little Caesars’ and Cliff Freeman & Partners’ solutions to those business issues have come to differ greatly.” He wasn’t available for comment Friday.

However, analysts said the split is likely linked to bumps in Little Caesars’ business. In recent years, it has struggled as consumers continue to find fast food alternatives and its competitors beef up their businesses. It joins a roster of companies, including Levi Strauss & Co. and Delta Air Lines, to part with longtime agencies amid business troubles.

Little Caesars’ sales stagnated at $1.8 billion between 1995 and 1996, said Ron Paul, president of Technomic Inc., a Chicago restaurant consulting firm. And the company did not fare any better last year, analysts said.

The company, however, is not the only one struggling for consumers.

“After huge growth in the early ‘90s, the fast food pizza industry hit a roadblock,” said Douglas A. Christopher, an analyst with Crowell, Weedon & Co. in Los Angeles. “First you have nouveau pizzas like California Pizza Kitchen and wood-fired pizza. There’s also been improvements in traditional frozen pizza. And then you have fast food chains like Boston Market taking away customers.”

Because of the increased competition, the chains have had to find new ways to grow their businesses. While Pizza Hut is in the midst of a major marketing push that led to a 5% increase in fourth-quarter sales over the previous year, Little Caesars’ changes have been received less favorably, analysts said.

“Their marketing message is off,” said Karen Benezra, editor of Brandweek, a trade publication. “These guys thought humor would always work, but consumers are looking for better-tasting pizza.”

Furthermore, Little Caesars reduced its ad spending, cutting its budget from January through November 1997 to $34.6 million from $53 million in 1996, according to Competitive Media Reporting.

Little Caesars spokeswoman Susan Sherbow described the split from Cliff Freeman as amicable.

“We used Cliff for 12 years, and it had been a long time since we had done a review,” she said. “But we felt we needed to go out and look at other agencies and see what they had to offer.

“We have great respect for Cliff and all the work he’s done, and we’re sorry he’s not participating in the process, but that’s his decision.”

She said the company is upbeat about its prospects. “We’re optimistic we can capture more market share, and one of the ways to do that is through advertising,” Sherbow said. “It’s very possible we could benefit from a new agency.”