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Conflicting accounts.

Conflicting Accounts

Bids For Two City Accounts Spark Conflict-Of-Interest Accusations In CJRW's $11-Million Tourism Business

June 10-11 could prove to be lucrative -- and potentially costly -- days for the Little Rock advertising agency Cranford Johnson Robinson Woods.

On June 10, CJRW will vie for the $950,000 Hot Springs Advertising and Promotion Commission account held by Walker & Associates.

The following day, CJRW will present proposals in Eureka Springs to keep that city's $400,000 account.

If CJRW wins both accounts, the money will be good. But the fallout among advertising agencies across the state may not be positive.

Rival advertising executives, hungering for the same business (55 firms bid on the Eureka Springs account), are asking themselves if CJRW should have what is perceived as a lock on the state's tourism advertising.

There was a time when advertising for tourists wasn't worth much. But in recent years, the state's steadily growing $2.3-billion tourism industry has showered millions of dollars in ad billings on agencies that win accounts.

Luckiest of all was the Woods Brothers Agency, led by brothers Shelby and Wayne Woods. That agency, more than any other, helped build the tourism industry in Arkansas to its current level.

The Woods brothers spent 24 years building their $11-million business by cultivating tourism accounts across Arkansas -- most significantly the state Department of Parks and Tourism account.

When Woods Brothers merged with Cranford Johnson RobinsonAssociates in December 1989, a near strangle-hold on tourism accounts was cemented.

In addition to the Parks and Tourism account, CJRW represents seven of the state's 12 tourism associations, seven of the 16 city advertising and promotion commissions (several of which do not employ ad agencies) and hundreds of individual tourist attractions.

There is a feeling in the Little Rock advertising community that CJRW is an agency caught in a conflict of interest and that the conflict of interest is growing as CJRW's tourism ad account list expands.

Some ask how one agency can represent the state, numerous cities and tourist associations and do it in a competitive and even-handed manner.

Is this the best way to represent taxpayers' money, others ask.

Still others say the Woods brothers deserve the accounts because they are, after all, the ones who made the whole thing happen.

Shelby Woods can't understand why people complain about a conflict of interest when his agency has to be selected for each account. It's not as if the tourism accounts are a birthright, he says.

"It's a slap in the face to the people involved in the decision-making process," he says. "I don't think conflicts exist in Arkansas tourism [accounts]."

One thing is certain -- trying to take any business away from CJRW will be tough.

"For all these years, we've been street fighters," says Woods, executive vice president and chairman of the executive committee at CJRW. "Now, we're street fighters with money, and that makes us dangerous."

A big part of that money came from the 1989 state tourism tax, which boosted the Parks and Tourism account from $640,000 to $3.6 million. The account is now worth $4 million.

Wayne Woods, the firm's senior vice president and director of promotions, questions critics' motives. He says they're complaining because they weren't around to land the accounts initially.

"I don't remember seeing a lot of these people 10 or 15 years ago," Woods says.

Few of the ad executives contacted for this story were willing to talk on the record. They were fearful of CJRW's influence or concerned with appearing petty.

Whether people are simply envious of the tourism advertising business that CJRW has garnered or are sincerely concerned as citizens, questions have been raised.

And Shelby and Wayne Woods will have to handle grumbling and growing competition -- and what some rival ad agencies hope will be a mounting backlash -- just as they've handled the majority of the state's tourism accounts for 24 years.

License To Steal

Shelby Woods talks about tourism with as much gusto as he did when he started his own advertising and publishing business in 1967. The main difference today is that he and Wayne talk from the smartly appointed executive conference room of the largest advertising agency in the state.

As the Woods' agency grew, the tourism industry matured and prospered as well.

"What we've done is kind of grown up with our clients," says Wayne Woods, who joined his brother in 1971.

At age 21, Wayne called on a 16-unit motel that today is the 300-unit Inn of the Ozarks at Eureka Springs. He watched Mountain Harbor Resort on Lake Ouachita grow from a 100-slip marina to 800 slips.

The Woods brothers saw a future in tourism and thus capitalized on accounts that others ignored.

Other agencies wouldn't travel to places such as Mountain Home for a mere $10,000 account. The Woods brothers would. They developed several accounts in Mountain Home and mined what then was a sleepy north Arkansas town for a $50,000 combined ad billing.

Such success has been magnified since the merger with CJRA. What was created was an agency of unparalleled size and influence in Arkansas.

Conspiracy theorists in the ad community question why CJRA didn't bid on the Parks and Tourism account when it was up for review in April 1989, instead choosing to endorse Woods Brothers. They speculate the two agencies already were planning a merger.

Shelby Woods says the theory is false.

He notes that other firms, such as the Brooks-Pollard Co., endorsed his agency as well simply because they liked and appreciated the work Woods Brothers had done for the state.

The merger wasn't negotiated or even thought about until later, he says.

Regardless of when the merger was planned, CJRW is commonly acknowledged as being the best connected ad agency in the state politically -- an important factor in keeping tourism advertisers in the company fold.

CJRA's political clout was evident when the Arkansas Industrial Development Commission account was up for review in 1988.

At the time it was reported that what is now Combs & Heathcott won the most points during judging. Yet Cranford Johnson was allowed to keep the account after Gov. Bill Clinton made telephone calls to commission members.

"It was almost a foregone conclusion they were going to get it," says Sheffield Nelson, who was AIDC chairman at the time. "For the governor to involve himself was unconscionable."

Clinton later publicly apologized, but he had already made his favoritism obvious.

In a much less controversial manner, the Woods brothers have established strong ties with Parks and Tourism officials during the past 24 years. One local advertising executive remembers seeing a commission member put his arm around Wayne Woods during the 1989 review and say, "You old sly dog."

CJRW's connections can be daunting.

Dan Cowling at The Communications Group says his agency declined to bid on the Hot Springs account partly because Walker & Associates have done so well with it and partly because "of the political and industry contacts that Cranford Johnson has, as well as their experience."

No Competition At All

Last week, it was reported that CJRW had won a $75,000 state Game and Fish Commission project for which no other agencies made presentations.

The commission does not employ an agency of record, but CJRW has donated work because the agency feels the commission is an important player in the tourism game.

"We have a favorite saying," Shelby Woods says of the commission and fishing. "Unless we help the Game and Fish Commission put |em in, our visitors can't take |em out."

The extra work paid off for CJRW.

"There's no doubt they have connections," says Parks and Tourism Executive Director Richard Davies.

But Davies contends that jealousy is fueling many of the complaints about the agency.

"I think a certain amount of that may be sour grapes," he says. "Do you really believe they would keep it if they weren't doing a good job?"

Muddled Picture

Richard Davies refers to Barbara Mandrell's song "I Was Country When Country Wasn't Cool" as he talks about the Woods brothers' commitment to tourism, an industry that was neither fashionable nor fruitful when they first embraced it.

Their love of the state and its people is obvious. The brothers admit they're friends with clients and even vacation with them.

Shelby Woods discounts the good-old-boy network and says its ability to land the agency accounts is a myth.

"These are business people," Woods says. "If they don't get a return on their investment, and if we don't perform, they're not going to stay around."

"They have to produce," says Davies. "There's too much money involved and too many people who are vitally interested."

With $2.3 billion in revenue, tourism is second only to agriculture as the state's top industry. And it's growing rapidly. Tourism dollars spent in Arkansas increased 11 percent last year.

"We're about as accountable as you can get," Davies says. "The tourism tax was like saying, |We've given you a built-in barometer, boys.'"

Handling a variety of accounts from across the state benefits clients, Shelby Woods says. It also dovetails with the brothers' longtime strategy of blending accounts for greater impact.

Woods says there are no destinations in Arkansas that can hold visitors longer than three days. Tourist attractions need to cross-sell and pass people around. Woods points to Hot Springs and Eureka Springs as examples of where that happens.

Some advertising and promotion commission members agree, but others don't.

"It wouldn't bother me to see an ad that says, |Visit two famous springs in Arkansas,'" says Bob Wheeler, a commission member at Hot Springs. "Think of the in-between people who gain off of tourism, too. Tourism is going to bring money into the state if we can show them something they want to see from top to bottom."

The only conflict of interest Wheeler sees is if an agency handles convention accounts in Little Rock, Pine Bluff and Fort Smith at the same time.

"We've been successful in our state because we work together," says Bob Purvis, executive director of the Eureka Springs Advertising and Promotion Commission. Purvis doesn't even think his city's tourist season coincides with Hot Springs'.

But Hot Springs Advertising and Promotion Commission member Jay Chesshir takes the conflict-of-interest question one step further where CJRW is concerned.

"How are we going to justify the attention we're receiving from the state budget?" he asks.

Chesshir feels that if CJRW represents Hot Springs, which has the largest local advertising budget in the state, and Parks and Tourism, it will be too easy for other cities to cry foul if they feel Hot Springs is getting more than its share of publicity through state literature and promotions.

Chesshir isn't passing judgment. But he fears if an agency represents more than one city, the picture becomes muddled.

Even Davies says, "I have thought about that, and it's sort of like debate class. I could take either side and make a fairly good argument."

Critics also ask how CJRW would justify the amount of exposure individual tourist accounts such as Oaklawn would receive in city advertising if the agency won the Hot Springs account.

When those individual accounts are added into the equation, the picture becomes even more unclear. The Woods brothers' ability to reassure clients that they have their best interests in mind becomes crucial.

So far, they've been successful.

Obviously, competitors are hoping it won't last forever.

The Ultimate Reality

One of the few tourism accounts CJRW does not have is by design.

The Little Rock Advertising and Promotion Commission rotates agencies on a three-year cycle. CJRW already has had its three years. Resneck Stone Ward & Associates now has the account.

"I don't know if there's a real reason for it," says Executive Director Barry Travis.

But Travis says the routine works well.

There are mixed reactions to his system.

"I think the world of Barry," Davies says. "But I don't know if I buy that."

Steve Holcomb, a principal at Mangan Rains Ginnaven Holcomb, says all state services -- from accounting firms and law firms to advertising agencies -- should be reviewed or changed every few years.

All Arkansas businesses should have the opportunity to compete openly and fairly, according to Holcomb.

"For the taxpayers' benefit, that should happen," he says.

The Woods brothers disagree.

"Change for the sake of change produces inefficiencies," says Shelby Woods. "If corporations have good relationships with marketing firms, they don't change. Why should it be any different for a state agency?"

He adds, "We have a reputation for being aggressive and on target, and that's Arkansas' reputation."

There is no question the Woods brothers have done much to promote Arkansas.

They published the state's first tour guide, and they helped form tourism co-ops across the state. They worked tirelessly to pass the tourism tax. The list goes on and on.

But as tourism accounts become more lucrative, the accusations of conflicting interests won't go away.

At the same time, Davies and others won't quit defending CJRW's role.

Davies scoffs at those who say CJRW has the Parks and Tourism account because of political connections.

"How long do you think I'd get away with that?" he asks. "Put yourself in my shoes as a matter of political reality."

The Woods brothers' grip on the tourism industry isn't something they feel they're "getting away with."

"Tourism gets in your blood and flows in your veins," says Wayne Woods. "We live it daily."

"[Arkansas] is a neat place, and it deserves the best," Shelby Woods says. "We think we are the best."

PHOTO : THE $11-MILLION BABY: For the past two decades, ad executives shelby ( left )and Wayne have nurtured their lion's share of the advertising from Arkansas' $2.3-billion tourism industry. Rival agencies say the Woods brothers have too much control and too many conflicts of interest. But the Woods brothers say it's only sour grapes.

PHOTO : SWEET SMILES OF SUCCESS: Although there are numerous conflict-of-interest charges made against them, Shelby (left) and Wayne Woods have reason to smile with an $11-million tourism business that just keeps growing.

Carrie Rengers Arkansas Business Staff
COPYRIGHT 1991 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Cranford Johnson Robinson Woods advertising agency denies conflict-of-interest accusations
Author:Rengers, Carrie
Publication:Arkansas Business
Date:May 27, 1991
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