AT&T's $3.4 Billion Media Account in Play

Incumbents to Receive RFPs; Select Resources to Handle Review

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SAN FRANCISCO (AdAge.com) -- AT&T has put its estimated $3.345 billion media-buying and -planning account into review.
AT&T says the media review is expected to be completed by the end of the year.
AT&T says the media review is expected to be completed by the end of the year.

In a statement, the telecom giant said it will be issuing a request for proposals to incumbent shops, and that the review is expected to be completed at year's end.

"This move will consolidate all of AT&T's media planning and buying at one agency and is part of the company's ongoing efforts to maximize efficiencies created, in part, by AT&T's acquisition of BellSouth at the end of last year," AT&T said in a statement. "AT&T is pleased with the work of all of its agencies to date," it added.

Incumbents
Five agencies currently were handling various parts of the AT&T business. GSD&M is lead agency for media planning and buying for the telecom's landline business including digital. Mediaedge:cia handled wireless media planning and buying. OMD handled print for the wireless unit. Initiative was the agency for the nine-state area of BellSouth, and Digitas handled wireless digital planning and buying.

Earlier this year, AT&T, the nation's second largest advertiser, shifted lead agency responsibilities from GSD&M to BBDO, formerly agency for Cingular Wireless, now AT&T mobility unit.

AT&T told Wall Street that 20% of its saving from the BellSouth acquisition and its complete ownership of Cingular Wireless would come from advertising and marketing expenses.

Spending data
Advertising Age estimates, which include both measured and unmeasured spending, put the overall budget for AT&T, BellSouth and Cingular Wireless at $3.345 billion in 2006. AT&T and Cingular spending alone was $2.3 billion, according to Advertising Age data.

According to TNS Media Intelligence, the telecom spent $2.341 billion in measured media in 2006. However, recent measured results indicate spending is starting to drop. For the first five months of this year, AT&T spent $914 million in measured media, compared with $1.69 billion for the same period in 2006.