Hewlett-Packard seeks agency for spinoff

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Hewlett-Packard Co.--on a fast-track review to hire an agency for its $7.6 billion spinoff--hopes to select a shop this week to introduce the venture to global customers and investors. Shirley Horn, director of brand management for the unnamed spinoff, declined to reveal budget or contenders. But she said Hewlett-Packard is using Lucent Technologies, AT&T Corp.'s hugely successful spinoff, as a "best practice model" in developing its spinoff.

Lucent agency McCann-Erickson Worldwide, New York, is believed to be a strong contender for Hewlett-Packard's business. Hewlett-Packard hired Landor Associates to name its new venture; Landor also created the Lucent name and logo. Ms. Horn foresees a launch campaign including U.S. TV and global print through an agency with a worldwide network and a solid record in branding. The Lucent model suggests a major budget: Lucent spent $61 million on its U.S. launch in 1996, according to Competitive Media Reporting.

The new venture, to be based near Hewlett-Packard's Palo Alto, Calif., headquarters, is taking over the company's test and measurement, medical, and components businesses, representing $7.6 billion of Hewlett-Packard's $47 billion in sales for fiscal 1998, ended Oct. 31. Hewlett-Packard, focusing on computers and imaging, announced in March it would spin off the other businesses starting with a stock sale later this year.

The brand assignment won't affect relationships with agencies handling product advertising, Ms. Horn said. The new operation's main product agency is Think New Ideas, Seattle, which handles the estimated $5 million test-and-measurement group.

Ms. Horn said the venture will put the spotlight on market-leading products that had been overshadowed by Hewlett-Packard's huge computer and printer businesses. "There's a tremendous opportunity," she said. "There are some very, very exciting technologies here."

Copyright April 1999, Crain Communications Inc.

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