Senior vice president Bart Brown today informed financial analysts and media of the decision
|Gateway hopes to 'reset' its brand
First quarter prediction
Gateway today also warned analysts that its first quarter earnings will only break even as it attempts to slash product pricing.
The decision to bring its advertising account in-house comes after negotiations with Publicis Groupe's Fallon, Minneapolis, broke down last week over strategic differences. Also in the review were Siltanen/Keehn, El Segundo, Calif., and DiMassimo Brand Advertising, New York. Gateway fired Interpublic Group Cos.' McCann-Erickson Worldwide, New York, in January.
The change comes as Gateway struggles with weak earnings and sales, which resulted in a management shuffle in January and Chairman Ted Waitt returning to daily management of the company, adding the title of CEO. Gateway also recently announced layoffs of some 3,000 employees.
Gateway will deploy "relentless messaging" to promote a new brand promise and "reset the brand," Mr. Brown said. The marketer will target consumers with more segmented offers geared toward lifestyles, deploy viral offers, rewards and incentives, and step up "beyond the box" deals with major ad campaigns driving a "Gateway Value Promise" proposition.
During the meeting in San Diego, Mr. Brown quipped, "Ted's running advertising again," explaining that the company thought it already had the resources it needed to manage its advertising in-house.
Mr. Brown told analysts that Gateway will streamline its product line and focus less on product bundles that reduce margins and more on what he called a "selling mentality." The new approach will be evident in the cow-spotted marketer's more than 300 "Country Stores" through sales training and merchandising. "In the past, we might have been doing too much bundling," Mr. Brown said.
Gateway also will retool Gateway.com to make the site a more efficient sales channel, conduct bi-weekly communications with customers, deploy FSIs (freestanding inserts), and other advertising and communication to drive traffic both to the its stores and Web site. "The awareness of the stores is lower than the brand," Mr. Brown explained.
New TV advertising broke on Feb. 26, created in-house under the direction of independent director Henry Corra. Spots produced by McCann featuring the actor Michael J. Fox remained on the air as of Feb. 27.