HEWLETT-PACKARD TAKES STEP TO CONSOLIDATION: GLOBAL AD AUDIT MAY LEAD MARKETER TO PUT $375 MIL ACCOUNT AT ONE SHOP

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Hewlett-Packard Co. is embarking on a global audit of advertising, the first formal step in what could lead to consolidation of the estimated $375 million worldwide account at a single agency.

The goal is "increased integration" of now-disparate advertising, and "we may conclude that there are some improvements we can make" in the way Hewlett-Packard manages agencies and advertising, said Lisa Carr, corporate advertising manager.

"We may also conclude," Ms. Carr said, "that we need to do some level of consolidation, but that is not something we have concluded at this point."

SEEKING INPUT

Ms. Carr said Hewlett-Packard will seek input from its corporate and division marketing and advertising managers, and from its ad agencies. Hewlett-Packard wants to find a way for its agencies to respond confidentially with ways to improve the process, she said.

Hewlett-Packard is considering hiring a consultant to assist on the audit.

"What we need to do is figure out if there is a problem," and then find solutions, Ms. Carr said.

Numerous tech companies, including Compaq Computer Corp., IBM Corp. and Intel Corp., have consolidated to deliver more focused global advertising. But that approach is at odds with a credo of decentralization that has allowed Hewlett-Packard division and geographic managers to call their own shots.

Some Hewlett-Packard executives -- and some of the company's agency executives -- earlier have said they believe the marketer should consolidate to eliminate confusion (AA, March 29, et al.).

Hewlett-Packard's lead agencies are Goodby, Silverstein & Partners, San Francisco; Publicis & Hal Riney, San Francisco, with the Publicis network; and Saatchi & Saatchi, San Francisco, London and Singapore. The marketer's roster also includes Batey, Singapore; McCann-Erickson Worldwide in Latin America; and J. Walter Thompson Co. in Australia.

FAST-TRACK REVIEW

Separately, Hewlett-Packard's unnamed spinoff company -- known for now as Newco -- last week moved on a fast-track review. Late in the week, Y&R Advertising and McCann-Erickson Worldwide, San Francisco, were believed to be competing, with a third shop, JWT's San Francisco office, no longer in the review.

Shirley Horn, director of brand management for the spinoff, declined to reveal the budget but said Newco is using Lucent

Technologies, AT&T Corp.'s hugely successful spinoff, as a "best practice model" in preparing the spinoff. 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.

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