GERSTNER OUT TO MAKE BRAND NEWS

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IBM Corp.'s anointing of Ogilvy & Mather Worldwide with its $500 million global ad account will buy Big Blue consistency in advertising. But whether that matters will depend on Chairman-CEO Louis V. Gerstner Jr.'s efforts to simplify product branding and technology choices so IBM can deliver on the promise in the ads.

Mirroring the eight-member task force that late last month brought about the replacement of 40-plus ad agencies with O&M, committees set up by Mr. Gerstner are looking at critical issues like brand management and technology.

The outcome likely will be far more emphasis in advertising and products on "IBM" and far less on specific models. IBM is expected to drop many existing sub-brand names.

In PCs, for example, many observers look for the company this fall to scuttle some overlapping sub-brands, such as PS/2 and ValuePoint. Also expected is a return to a branding structure similar to its hugely successful early-1980s IBM Personal Computer, a model where "IBM" was far more important than "Personal Computer." In recent years, model names like PS/2 have overshadowed the IBM brand.

"It's going to be product-line pruning time," said Bob Nelson, principal in a technology marketing consultancy bearing his name in Morgan Hill, Calif.

Some analysts, though, worry that IBM may go overboard in pitching the corporate brand when many customers are as committed to a specific model, like the popular AS/400 minicomputer, as they are to IBM.

Still, brand and ad issues like these are cut and dried for the veteran of American Express Co. and RJR Nabisco. But Mr. Gerstner, with limited background in computers, faces a daunting task in deciding where to place IBM's bets on technology.

For example, he wants to leverage technologies in which IBM has a stake, such as the PowerPC chip. Yet one of IBM's strong performers, IBM Personal Computer Co., has succeeded by selling what the customers want-Microsoft Corp.'s Windows software and Intel Corp.'s chips.

Mr. Gerstner is betting on a formula that worked for decades: Market one brand, IBM; offer a broad array of products; and be able to assemble them into computer systems for customers wanting someone to make sense of a confusing world of technology.

But computer buyers are far more sophisticated than they used to be, computers are sold in all sorts of stores and what's good for IBM is no longer automatically accepted by the market. In this new reality, IBM is working to make its wares compatible with rival products.

In other tech review news:

Microsoft is likely to hire a West Coast agency with tech experience for its $45 million U.S. product account, formerly at O&M, Los Angeles, and appears willing to poach.

An executive close to the company said agencies that have been or will be contacted include San Francisco shops Foote, Cone & Belding, now handling rival Novell; Goldberg Moser O'Neill, agency for Symantec Corp.; Saatchi & Saatchi Advertising, Hewlett-Packard Co.'s primary agency; and Anderson & Lembke, already working for Sun Microsystems.

Salt Lake City shop Dahlin Smith White, now creating ads for WordPerfect Corp., is also on the list, he said.

Chiat/Day, Venice, Calif., may be included, the executive said. Chiat works on Microsoft in Canada.

Microsoft expects to finish by July 1 an ongoing review for a proposed $40 million global branding campaign, seen as a tossup between finalists Leo Burnett USA, Chicago, and Wieden & Kennedy, Portland, Ore.

Digital Equipment Corp., left with five finalists for lead agency in its estimated $90 million global account after O&M's withdrawal, will stick with multiple shops.

"We are looking for a worldwide strategic partner who will set plans but not execute all the advertising," said Charlie Holleran, VP-corporate communications.

The one-shop approach is questioned by Arthur Anderson, managing partner of Morgan, Anderson & Co., a New York advertising consultancy. "One reason some clients are consolidating into one agency is that it relieves corporate management of the job of managing worldwide resources," he said. "IBM is taking a big chance."

Contributing to this story: Tim Clark, Kim Cleland, Alice Z. Cuneo and Cleveland Horton.

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