"Instead of engaging multiple marketing agencies independently, TSG will engage a single holding company, which will be accountable for all advertising, direct marketing, search-engine marketing and interactive campaigns," a company spokeswoman said. "The goal behind this move is to have the holding company act as an integrator for all TSG marketing campaigns, facilitating consistency across marketing vehicles and disciplines."
According to HP, the move isn't reflective of a lack of satisfaction with TSG's current agencies. Executives familiar with the matter said those shops include Omnicom Group's Goodby, Silverstein & Partners, WPP Group's Wunderman, Interpublic Group of Cos.' McCann Erickson and Publicis Groupe's Publicis. Agency representatives either declined to comment or could not be immediately reached.
Agencies that currently work with TSG will be invited to participate in their respective holding companies' solution proposals, HP said, and the consolidation will begin in 2009.
Publicis Groupe's ZenithOptimedia is HP's global media agency of record, and handles all of the marketer's media planning and buying.
The Palo Alto, Calif.-based maker of printers, servers and desktop PCs and notebooks had centralized its advertising under former CEO Carly Fiorina. However, under its current CEO, Mark Hurd, HP returned to a decentralized plan, with each of its three divisions -- personal systems group, imaging and printing group, and the technology solutions group -- handling its own marketing. HP spent a total of $417 million on U.S. measured media in 2007, according to TNS Media Intelligence. Globally though, that number is likely closer to $1 billion.
Gary Elliott, VP-corporate marketing at HP, publicly hinted at the marketer's dissatisfaction with its current agency relationship structure in remarks made at the Association of National Conference in Orlando, Fla., last week.
"The overall message, I would have to say, with HP, is that I don't think any of these [agency] relationships are satisfactory enough that we would continue them without having some degree of experimentation," Mr. Elliott said. "We've been experimenting with different agency relationships where we're looking at agency partners and vendors in ways that connect them loosely with each other. We're looking at models where we have everything with one of our key partners."
What's lacking in agency relationships now is speed to market, Mr. Elliott said. "I don't think with our current system we're achieving that. ... We're going to pilot a number of different relationships where we go direct with media companies."