Compaq, Digital chase global shop consolidation

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The fortunes of soaring Compaq Computer Corp. and floundering Digital Equipment Corp. couldn't be more different. Yet both are on a remarkably similar path to global agency consolidation.

Compaq is holding to its statement that it will decide whether to go with one agency for its $200 million global account within 30 to 60 days (AA, April 21)--and that it will choose between U.S. shop Ammirati Puris Lintas, New York, and Bates Worldwide, London, which manages the European account.

PINNING ITS HOPES

Bates executives met with Compaq late last week at the company's Houston headquarters. Ammirati, meanwhile, is pinning its hopes on a proposed global campaign with the tagline "Change is good," which observers said originally was championed by David Middleton, global VP-marketing and communications.

Two other major agencies, each working for a Compaq competitor, are believed to be eyeing the company. But Compaq has said it will not consider other shops.

Digital, as reported, also is expected to consolidate its $105 million to $110 million account at a single agency--to coincide with a restructuring that takes effect July 1.

Although a Digital spokesman insisted it plans no agency changes, an executive close to Digital said consolidation is nearly a sure thing, with different factions pushing four alternatives.

The top two alternatives are to hand everything to DDB Needham Worldwide, New York, now the corporate agency, or Y&R Advertising, which has the PC assignment. The other options are to do a full review and pick one agency for creative and hire a media buying service.

While on the global consolidation track for ads, in financial terms Compaq and Digital are on different routes. Compaq has seen revenues explode from $3.3 billion in '91 to $18.1 billion last year, posting robust profits as it locks up the position as the world's No. 1 personal computer maker.

FLOUNDERING IN `90S

Digital, which once challenged IBM Corp. for leadership in the computer industry, has floundered this decade as revenues have barely budged--from $13.9 billion in '91 to $14.6 billion in fiscal 1996, ended June 30. It made a small profit last year after four years of losses.

Still, they're arriving at the same conclusion: They must communicate one message to the world of business.

Compaq in March recruited Mr. Middleton from IBM to oversee a newly consolidated global marketing function. Digital followed suit this month, moving Bruce Claflin, its PC chief and himself a former IBM executive, to the new post of VP-general manager of worldwide sales and marketing.

Mr. Claflin, who inherited Y&R as his PC agency, now is being lobbied by executive factions pushing the four agency proposals.

"Clearly, [with major corporate] enterprise customers, it does make sense [to speak to] Fortune 500 worldwide companies . . . in one voice," said Kathleen Harrington, Compaq's director of advertising.

Of course, it's not an original idea. Computermakers including Unisys Corp. and Apple Computer championed the idea years ago in tech advertising, and numerous others--IBM, Intel Corp., Microsoft Corp.--have since gone with global agencies.

GATEWAY, SUN GO GLOBAL

Just this year, Gateway 2000 hired D'Arcy Masius Benton & Bowles, Los Angeles, and Sun Microsystems turned to Lowe & Partners/SMS, San Francisco and New York, to unify global communication.

While some tech executives still debate whether consumer communication should run globally, the strong consensus is that to do otherwise delivers a confused message to business buyers, particularly globe-trotting executives working for multinational companies.

Contributing: Laura Petrecca.

Copyright April 1997, Crain Communications Inc.

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