New York-based Morgan Anderson was brought in with BBDO's blessings, said David Lubars, president of BBDO West in Los Angeles, home base of the estimated $150 million-plus worldwide account.
Managing Partner Arthur Anderson said he is looking at more than the contract and compensation, stressing his primary task is seeing how "Apple is organized for the brand worldwide."
An Apple spokeswoman quashed rumors of trouble with BBDO. "Our relationship with BBDO continues to remain strong," she said.
Apple and BBDO do need to forge new relationships. Allen Olivo, formerly Pacific Bell's advertising director, joined Apple this month as director of worldwide corporate advertising.
He succeeds Michael Markman, who caused friction with the agency with an aggressive management style and hedging about the agency relationship (AA, Aug. 22). Mr. Markman, who said Advertising Age took his comments out of context, last fall moved to a multimedia post at Apple.
BBDO and Apple also are adjusting to life without BBDO West Chairman Steve Hayden, who left in November to oversee Ogilvy & Mather Worldwide's IBM Corp. account.
The effective commission rate on Apple is "well under 10% already," said an executive familiar with the business. It's not likely to improve under Morgan Anderson.
Controlling agency pay reflects aggressive cost cutting by President-CEO Michael Spindler to adapt to PC price wars and shrinking profit margins. It's working: Apple earned $188 million in the first quarter ended Dec. 30, a nearly five-fold increase over the year-ago period. Sales rose 15% to a record $2.83 billion.