An ad agency sued Omnicom’s DDB, alleging it was ‘exploited’ to win a $4 billion US Army contract

An ad agency sued Omnicom's DDB, alleging it was 'exploited' to win a $4 billion US Army contract thumbnail
  • The ad agency Hero Group sued Omnicom’s DDB agency over a $4 billion US Army contract.
  • The suit alleged DDB brought on Hero Group to win the contract but never paid it for more than two years of work.
  • Hero Group is seeking $100 million in damages for what it calls “a classic bait and switch.”
  • Visit Business Insider’s homepage for more stories.

The New York ad agency Hero Group sued the Omnicom-owned agency DDB in federal court this week, alleging DDB “exploited” Hero to win a US Army contract and didn’t pay it for two years of work.

The suit filed in the US District Court for the Northern of Illinois stems from a $4 billion Army account that DDB won in 2018 and alleged the agency performed a “classic bait and switch” that included misrepresentation, breach of contract, and fraud. The suit says it is seeking $100 million in damages based on an estimate of the revenue Hero Group would have earned if it worked with DDB on the entire 10-year contract.

Hero Group founder and CEO Joe Anthony told Insider that then-DDB US President Paul Gunning brought him on to help pitch the account in 2016 because of his experience working with the Army’s past ad agencies, McCann and Leo Burnett.

Hero Group specialized in targeting young people and would also help DDB meet the legal requirement to assign about 40% of the Army business to small and disadvantaged businesses or those owned by minorities, the suit said.

The suit also alleged Hero Group, which is also known as Hero Collective and has done work for Johnson & Johnson and Mattel, performed work for DDB from 2017 to 2020 but never received payment or additional assignments.

Read more: Pitch deck reveals how ad giant Omnicom won the US Army’s $4 billion marketing business. Its first ads are about to hit digital and social media.

Gunning, the suit claimed, promised to make Hero Group DDB’s primary partner if they won the review. The suit alleged Gunning wrote an email to Anthony that said: “I will look for you to make a serious impact on our pitch.”

It also claimed DDB’s pitch deck used a “substantial portion” of Hero Group’s own proposals, like “Real Life Iron Man.”

But in May, Anthony said, Army officials told him they did not know his agency had signed a contract with DDB.

Anthony told Insider he did not realize DDB was dropping his agency until he received a message from the Army saying that DDB could not find work that fit Hero Group’s capabilities.

An Army spokesman previously confirmed to Insider that DDB never named Hero Group as its partner.

“These contracts are very lucrative; they’re some of the last whales in the ocean,” Anthony said of federal contracts. “Too much latitude is given to big agencies, which ultimately leads to dollars not making their way to the hands of those who truly need it.”

A DDB spokesperson declined to comment, and Omnicom and the US Army did not immediately respond to requests for comment.

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