Jones-Lundin Associates, New York, will consult on the selection process, which is expected to last three months. Former Ogilvy & Mather Chairman and current Compaq board member Ken Roman is playing an integral role in the review.
Incumbent DDB Worldwide, New York -- the latest in Compaq's string of shops -- will defend the business against a handful of pre-selected global shops, executives close to the situation said.
Although contenders weren't disclosed, industry observers speculated D'Arcy Masius Benton & Bowles; FCB Worldwide; Grey Advertising; J. Walter Thompson Co.; and Young & Rubicam would be among those on the list.
Interpublic Group of Cos.' ad agencies may also have a shot at the account; Interpublic's Draft Worldwide already handles direct duties, which are not affected by the review.
In an internal memo disseminated last week, David Middleton, VP-corporate communications, stated: "As we execute our strategy to become a leader of Internet infrastructure, access, services and solutions, advertising will again play a critical role. It is for that reason that we must be absolutely certain we have the right agency."
Compaq has conducted on-again, off-again searches for a top marketing executive. "They're very far from a marketing company; it's not organized to be a marketing/brand company and it's hell for DDB," said an executive close to the account.
`WE'LL FIGHT': DDB EXEC
The agency, however, is gearing up for battle. "We'll fight," said one DDB executive. "It's a large, important account. There will be a full-court press."
Whichever agency wins the business will have to grapple with Compaq's reputation as a hard-to-please client. In 1997, Bates Worldwide and Ammirati Puris Lintas duked it out for the business. Just one year after the worldwide consolidation at Ammirati, Compaq once again moved the business in June 1998 to DDB.
Compaq beat Dell Computer Corp. in global PC unit shipments in the fourth quarter of 1999 with a 13.8% market share vs. Dell's 10.1%, according to International Data Corp., a technology research company. Dell pulled past Compaq in U.S. shipments, however, if only by a hair: 17% vs. 16.3%, during the same period.
Compaq's decision to place its account into review doesn't surprise industry observers.
"They're trying to remake the whole company from soup to nuts," said Roger Kay, research manager for IDC.
Despite improved fourth-quarter numbers, Compaq lags in transforming itself into a nimble Internet company. It has slogged through layoffs, management upheaval and several reorganizations since last spring when President-CEO Eckhard Pfeiffer was forced out.