Apple to review $100 million account

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Apple Computer is reviewing its estimated $100 million to $150 million global account, ending literally years of rumors that the troubled marketer would put its account in play.

BBDO Worldwide, informed of the review late June 24, told Apple it will not participate.

"We stood by them during very tough times," said David Lubars, CEO-chief creative officer of BBDO West in Los Angeles, home office for the account. "For us to participate in a review just doesn't feel right...We just don't agree with the direction of their company."

Apple had no comment at press time but was expected to announce the move June 26.

The review ends the longest-standing relationship between a major computer marketer and an ad agency. BBDO has worked with Apple's European arm since the early 1980s and won the U.S. business in May 1986, producing some of the most acclaimed work in the category.

Apple is believed to have come close to reviewing the account last year before sticking with BBDO. But with pressure mounting on Apple management, the company pulled the plug. The decision comes as Apple is expected to report a loss for the quarter ending June 30 that could exceed $100 million.

Apple is struggling to turn around its sinking fortunes and market share, which had slumped to just 3.3% of the U.S. PC market in the first quarter, according to International Data Corp.

BBDO will work with Apple through September, the end of Apple's fiscal year. Mr. Lubars said he and BBDO's top management together decided not to participate in the review.

Agencies seen as possible contenders include Young & Rubicam, whose Wunderman Cato Johnson unit in San Francisco handles direct work for Apple; Bates Worldwide; TBWA Chiat/Day, Venice, Calif., which lost the account in '86 to BBDO; Foote, Cone & Belding, San Francisco; Hal Riney & Partners, San Francisco; Fallon McElligott, Minneapolis, which worked on an Apple project last year; CKS Partners, Cupertino, Calif., which works on interactive projects for Apple; and Deutsch, Santa Monica, Calif., and New York.

Mr. Lubars has been fending off speculation about the loss of Apple since he arrived at BBDO in 1993. Since then, Apple has been on a roller coaster, enduring continual changes in its executive offices, marketing and strategies in a world increasingly dominated by Microsoft Corp.'s rival Windows software standard.

Apple advertising is under the control of David Roman, VP-corporate advertising and brand marketing. The company is in the process of implementing a plan unveiled earlier this year to create specific communications for existing Apple customers and a separate effort aimed at the broader market. Apple also is grappling with what markets it should focus on; Mr. Roman recently said the company would emphasize sectors, such as the creative community and education, where Apple is strong while de-emphasizing consumer advertising.

Amid all the changes, Apple has slashed ad spending, now believed to be below the annualized rate of $150 million in place earlier this year. Apple's U.S. budget is estimated at about $50 million -- little changed from where it was when BBDO won the U.S. business.

Mr. Lubars said there will be "some layoffs" among the 200 people in his office. But he said Apple no longer is the biggest account in the $400 million (billings) BBDO West office.

Mr. Lubars said he wasn't surprised when Apple made its long-rumored move.

"I've been living with this sword of Damocles and doing my best to prop it up since the day I got here," he said. "One gets used to it. You live with it."

Copyright June 1997, Crain Communications Inc.

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