News that IBM was poised to consolidate its direct marketing assignments was first reported in Advertising Age magazine Monday.
A third agency agency responsible for direct marketing, Havas Advertising's Brann Worldwide, Wilton, Conn., was eliminated from the review. IBM interactive shops R/GA, Modem Media, Answerthink and WPP's OgilvyInteractive, all New York, will continue to work with IBM on all aspects of ibm.com.
The tech giant's realignment takes effect in early 2002.
A new model
IBM's decision goes beyond cost-cutting considerations. The unprecendented move to place both assignments at OgilvyOne and Wunderman signals a growing understanding on the part of agencies and clients that interactive or digital marketing is inextricably linked to direct marketing. IBM, like other big marketers, continues to integrate all forms of marketing, media and communications.
"This move is driven by strategy. We had a cross-company marketing team do in-depth research and work on this model, and we think this is the appropriate go-to-market strategy in an environment where interactive is very much an integral part of direct marketing," said Laura Keeton, director of corporate media relations at IBM.
Interactive advertising accounts for about 7% of IBM's $600 million global media resources. IBM does not disclose spending on direct marketing. Nonetheless, the numbers are becoming increasingly hard to tally as IBM, and other major marketers, increasingly counts interactive as part of its direct marketing spending.
IBM considers direct marketing any effort that looks to generate demand for its products and services whether it's through online banner ads, mailings or phone response.
Little division of duties
OgilvyOne and Wunderman will each implement direct and interactive marketing programs for Big Blue. The only division of labor between the two calls for Wunderman to handle product- and business-unit specific direct and interactive work, while OgilvyOne will handle IBM's umbrella-oriented solutions campaigns, which extend across the multitude of its product and service offerings.
WPP's Ogilvy & Mather Worldwide, New York, handles IBM's more than $600 million global advertising account. IBM spends an estimated $1.1 billion on an annual basis, globally, on advertising and the rest of its marketing activities.
Staff writer Cara Beardi contributed to this report.