The U.S. Army has ordered a dramatic shake-up of its marketing machine in the wake of congressional scrutiny of "ineffective marketing programs" that emerged in an internal audit.
In a May 30 service memo, Army Secretary Mark Esper ordered that Army Marketing and Research Group (AMRG) be "redesignated as the Office of the Chief Army Enterprise Marketing."
In addition, Army marketing operations will relocate from Arlington, Virginia, to Chicago effective Aug. 1, officials said.
The move comes after the service awarded a contract worth up to $4 billion in late November to DDB Chicago Inc. -- a subsidiary of DDB Worldwide -- for "services in support of the U.S. Army Marketing and Advertising Program," according to the Defense Department contract announcement. DDB beat out McCann Worldgroup, which had been the Army's ad firm for more than a decade.
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Adweek first reported on this story, saying that Esper's memo comes about nine months after the "Trump administration responded to an internal audit that found millions of dollars in 'ineffective marketing programs' during fiscal year 2016 by withholding [approximately] 50% of the AMRG's budget in its latest defense spending bill."
The Fiscal 2019 National Defense Authorization Act directed Esper to submit a report on recommendations from "the audit conducted by the Army Audit Agency of the Army's Marketing and Advertising Program concerning contract oversight and return on investment" to both the House and Senate Armed Services Committees.
The NDAA blocked the service from spending roughly half of its fiscal 2019 funding for advertising and marketing until the report was submitted.
AMRG was also in the news in 2017, when Adweek reported that the group fired its director of marketing after he was accused of having an inappropriate relationship with an employee of McCann Worldgroup.
Army officials told Military.com on Wednesday that Esper's directive is the result of reform efforts that began 18 months ago when Congress directed the service to "consolidate our marketing enterprise and reshape the organization into more of a program and business management directorate," according to a written statement from Army spokesman Lt. Col. Emanuel Ortiz.
"As a matter of practice, we deliberately reviewed our practices to identify efficiencies and areas of improvement," Ortiz wrote.
Military.com reached out to McCann, but company spokesman Jeremy Miller declined to comment for this story.
The Army's new ad agency, DDB, is based in Chicago, but service officials said there are other reasons the marketing operation is relocating there.
"Chicago is home to some of the most innovative marketing experts in the country," according to Ortiz. "It is home to respected academic institutions, including prestigious marketing programs, and ranks as a top location in nearly every marketing category, from access to talent to job opportunities. The opportunities to build Army marketing talent are abundant in Chicago."
The marketing reorganization comes on the heels of the Army's decision to launch a sweeping new recruiting strategy in October after the service missed its annual recruiting goal by 6,500 recruits. The strategy added more than 700 recruiters and targeted Chicago and 21 other major cities in an attempt to strengthen the service's connection with America's youth.
-- Matthew Cox can be reached at matthew.cox@military.com.
