Ten years ago today, IBM Corp. made the bold move of consolidating all of its global advertising business with Ogilvy & Mather Worldwide.
The move was significant because it changed the ways in which IBM worked with its agency partners, aligned its internal communications and defined itself as an integrated global business.
Prior to the consolidation, IBM had used more than 40 different agencies in more than 30 countries to handle its advertising, brand strategy, public relations and other marketing efforts.
At a time when the Internet was just beginning to take hold and change the landscape of business, IBM decided to partner with a single agency to help it shape and communicate its vision of how business would operate in the future and how IBM would play a leadership role in business and technology.
"It was the vision of [former IBM Chairman-CEO] Lou Gerstner and [Senior VP-Marketing] Abby Kohnstamm for rebuilding the IBM brand and how Ogilvy would become a strategic partner in that endeavor," said Lisa Baird, VP-worldwide advertising for IBM.
IBM and Ogilvy would not disclose the size of the account. Last year, IBM spent $333.6 million just on media, according to TNS Media Intelligence/CMR. Over the past decade, Ogilvy and IBM have worked as true strategic partners, sharing key resources and ideas to build and communicate the IBM brand. The relationship has not been without its challenges, particularly with the dramatic changes in technology, the boom-and-bust business cycles and the new era of greater accountability in business.
Banking on IBM
From the start, Ogilvy had to make significant changes to accommodate its new client.
"When we took on IBM, we had to resign a few competing technology clients, including Microsoft [Corp.] and Compaq [Computer Corp.]," said Brian Fetherstonhaugh, chairman of global brands at Ogilvy, who has been in charge of the IBM account since 1994, when he was chief operating officer for the IBM global account at Ogilvy.
"That was a very tough decision, but given the commitment IBM was ready to make to us, and given the caliber and character of the people we had been working with, we decided we were going to bank our future with IBM."
On the client side, IBM had to change the entire structure of its agency model.
"We had been using many, many agencies," Baird said. "We had different logo presentations, the pieces of the IBM story were being told everywhere and were different country to country and business unit to business unit, and we werenât using our competitive advantage end to end to help customers be more successful."
Ogilvy was able to work with IBM on many levels, Baird said. "This is a very multilayered relationship, not just in advertising but as a partner in strategy, in business, advertising, direct marketing and campaign development," she said.
To ensure that Ogilvy is able to function as a strategic partner, IBM provides access when needed to its very top management, including Kohnstamm and Chairman-CEO Sam Palmisano.
"The partnership from its core is built around people, not technology," Fetherstonhaugh said. "IBM as a client realized this was going to be a dangerous mission and would boil down to the people who would work on this assignment. From the start IBM got actively involved in retaining the best help on the client side, and also worked with us to make sure we were bringing the best agency people."
Featherstonhaugh said that at every meeting, IBM and Ogilvy each put together a list of the top 30 people on each side working on the account and discuss how theyâre helping the "mission." While IBM does not dictate hiring decisions at Ogilvy, it consults the agency on all major moves and hires, Fetherstonhaugh said.
"This is a partnership that has paid real dividends on both sides," he added, pointing to improved performance in brand measures for IBM over the past 10 years.
To improve its brand strength in a rapidly changing world, IBM had to make some significant changes in its overall business and communications strategy.
One of those changes was defining the impact of the Internet on business and how IBM was going to take a leadership role in that movement.
In late 1996, most Internet news revolved around browser wars, banner ads and retail e-commerce. "IBM was not about browsersâit was about business," Fetherstonhaugh said. One of the challenges for Ogilvy was to create an industry "agenda" for which IBM could assume a leadership role, he said. The agenda would define how technology was changing business but not necessarily involve proprietary IBM technology.
The result was "e-business," a campaign that was launched in 1997. " âE-businessâ was clearly a milestone for IBM," Baird said. "E-business became the terminology for the industry."
The campaign was an integrated marketing effort that included an eight-page "manifesto" in major business publications that laid out IBMâs vision for e-business, TV spots, print ads, a significant Web presence and outdoor ads.
One memorable commercial showed a Web designer trying to impress a client with a spinning logo, while the client asked if he could put his whole supply chain online.
"At a time the world was thinking e-business was about e-commerce, we ran a campaign which showed how e-business was about running a companyâs infrastructure," Baird said.
Another major initiative was the launch of "e-business on demand" in late 2002, which presented the vision of Palmisano, who had recently come into his position at the helm of the company.
"E-business on demand" was another major integrated effort that included TV, print, online, outdoor, direct mail and events. It communicated how IBM hardware, software and services could meet the requirements of an on-demand world, in which businesses could anticipate customer needs before they arose and respond immediately.
"On-demand business became a huge mantra," Baird said, pointing to the success of the campaign in defining business terminology.
Baird said that over the past 10 years, the relationship between IBM and Ogilvy has been tested, particularly on creative issues.
"We have had internal disagreements about what we think is good and not good," she said. "But the best facet of the relationship is the trust that has developed between IBM and Ogilvy."