Countrywide Credit Industries' search for a new advertising agency, which caught the fancy of the trade press, has been put on hold.
The search, which drew frontpage coverage in advertising publications, was suspended "due to changes in the business environment" of the mortgage industry, according to Marlas Covin, the Pasadena, Calif.based lender's vice president for advertising.
She said the advertising efforts had been "redirected."
"Countrywide plans to reestablish discussions in the near future with those agencies previously contacted to address its needs for additional creative resources," the statement said.
Countrywide is one of the few mortgage companies big enough to advertise on national TV.
The sudden suspension of its search comes at a particularly gloomy time for mortgage lenders. A severe downturn in originations volume - precipitated by higher interest rates - has forced many to cut budgets.
Countrywide has already made significant staff cuts in the past couple of months.
In April, it cut 363 loan production jobs, or 14.2% of its production staff.
Jack Calnan, a principal at Elliott and Associates, a small Los Angeles ad-agency that created Countrywide's first TV ad campaign, said his firm would remain the lender's advertising agency - at least temporarily.
Mr. Caluan said his firm was notified May 13 that its relationship with Countrywide would continue.
He was "pleased" Countrywide would continue using EIliott and Associates.
According to a front-page report earlier this month in Adweek, a tabloid for the advertising industry, at least four Los Angeles advertising agencies were bidding on Countrywide's business: Paul Keye & Partners; Lois, Colby; Mendelson/Zien; and Stein Robaire Helm.
All these firms are small, highly creative shops. It would seem Countrywide was hoping its new agency would "break the mold" in advertising for mortgage lending, advertising insiders said.
The ad budget Countrywide had been shopping around was reportedly worth $8 million to $10 million, according to Adweek. Ad executives say a budget of that size is big by West Coast standards.
Countrywide was one of the first residential lenders to launch a nationwide television ad campaign.
Countrywide's first TV spot was shot in July 1993 by Elliott and Associates. Under the tag line, "America's Having a Home Sale," the series of four commercials produced a surge of business for Countrywide.
Countrywide's standard two weeks of advertising on a nationwide radio network yielded 1,000 to 2,000 phone calls per month. "We got as high as 9,000" per month during that TV campaign, said Ms. Covin.
Advertising at Countrywide is especially important given that it has no commissioned loan officers to drum up lending business, said Steve Artwood, senior vice president, American Residential Mortgage Corp., La Jolla, Calif.