An ad agency CEO sued Omnicom's DDB, alleging he was 'exploited' to win a $4 billion US Army contract

  • Ad agency Hero Group sued Omnicom's DDB agency over a $4 billion US Army contract.
  • The suit claims 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.

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

The suit filed in the Northern District Court of Illinois stems from a $4 billion Army account that DDB won in 2018 and claims misrepresentation, breach of contract, and fraud. The suit 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, the suit claims.

Hero Group founder and CEO Joe Anthony told Insider that former DDB US president Paul Gunning brought him on to help pitch the account in late 2016, using his experience working with the Army's past ad agencies, McCann and Leo Burnett.

The suit alleges Hero Group specialized in targeting young people and would also help DDB meet the legal requirement to assign around 40% of the Army business to small and disadvantaged, or minority-owned, businesses.

The suit claims 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.

According to the suit, Gunning promised to make Hero Group DDB's primary partner if they won the review. The suit quotes an email in which Gunning allegedly wrote Anthony: "I will look for you to make a serious impact on our pitch." It also claims that DDB's pitch deck used a "substantial portion" of Hero Group's own proposals, like "Real Life Iron Man."

But in May 2020, 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 claiming 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 [federal] contracts are very lucrative; they're some of the last whales in the ocean," Anthony said. "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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