GROWING HEWLETT-PACKARD TO INVEST IN ADS VIA PUBLICIS

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Hewlett-Packard Co., a growing force in the global PC field but an also-ran in ad spending, is getting more aggressive with a business PC brand campaign.

HP last week awarded Publicis SA, Paris, the incremental brand campaign promoting PCs and PC servers, breaking after HP's fiscal year begins Nov. 1.

HP PC spending via Publicis could be up to $60 million.

The account will be anchored at Publicis & Hal Riney, San Francisco. But Publicis effectively created a customized virtual agency for HP, harnessing the brand expertise of Riney, tech knowledge of Publicis Technology and global reach of the Publicis network.

HP A GROWING PLAYER

Publicis lands one of the industry's fastest-growing players: HP has climbed to fourth in the world market and fifth in the U.S., according to Dataquest.

The win is a coup as the first global account landed through the combined resources of Publicis and the former Hal Riney & Partners, acquired in May.

"Instead of HP picking an agency, an agency organized itself for HP," said Terri Holbrooke, president-ZD brand and market services at Ziff-Davis.

Ann McDaniel, North American marketing communications manager, said HP intends to step up its ad spending. "We're very serious about the PC business," she said.

Publicis prevailed over roster shop Saatchi & Saatchi, San Francisco, for the assignment.

In a statement, Saatchi said the PC account loss is "less than 10%" of its worldwide HP billings, which are "in excess of $100 million."

At HP's request, Publicis executives declined comment.

HP's PC product spending this year is an estimated $15 million in the U.S., via Saatchi, and $25 million in Europe, via Publicis.

HP indicated in the review it could spend $60 million on PCs next year, which suggests HP could add $20 million in spending to support the brand push next year.

SAATCHI TO RESIGN MEDIA?

HP asked Saatchi to continue to handle PC product ads and media in the U.S., but Saatchi resigned the product assignment and is expected to resign media. Both are expected to land at Publicis.

Saatchi will seek new tech business to replace the PC account. Julie Bauer, exec VP-general manager of Saatchi in San Francisco, said she expects HP to allow the office to pursue any business not directly competitive with the shop's remaining estimated $50 million in HP work, which primarily involves advertising for Unix servers.

MONEY FROM FUNDING SHIFTS

Some of the new incremental brand money going to Publicis is expected to come by shifting money from PC reseller market-development funds into advertising.

One observer said this could foreshadow a move by HP to sell PCs directly and become less reliant on resellers.

An HP spokesman responded: "We already have direct fulfillment capability that can be deployed when and if it makes sense."

Ms. McDaniel said HP's PC unit wants to consolidate its work in PR, Web and other functions. But at least for now, HP's PC business in other regions will stay at existing ad agencies: Leo Burnett Co. in Latin America and seven agencies in Asia/Pacific.

However, the Singapore office of Publicis already is beginning work for HP.

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