In a massive shift of direct marketing, IBM Corp. is paring the roster for its estimated $125 million global account from 30 agencies to four.
The winners are IBM's three biggest existing direct shops-- OgilvyOne, Barry Blau & Partners, Bronner Slosberg Humphrey--and a fourth-- Wunderman Cato Johnson--that has done smaller work for the computer giant. The change is effective May 1.
IBM expects the move will make its direct work more efficient, consistent and global, and more integrated with its advertising.
ENOUGH FOR THE LONG HAUL
The direct agencies now will have enough IBM business to build personnel teams for the long haul, said VP-Corporate Marketing Abby Kohnstamm. "If you're going to ask somebody to be a strategic partner, you have to give them enough of a stake," she said.
IBM is putting order into what has become a central form of marketing communication: IBM's direct budget soared from zero in 1992 to its current level and is growing 30% a year, said Fred Fassman, general manager of global direct marketing.
The marketer relies heavily on direct mail, telemarketing and the Web to promote products, generate leads and sell directly.
The review, announced last fall, mirrors IBM's May 1994 decision to fire some 80 ad agencies and consolidate the then-$500 million ad account at Ogilvy & Mather Worldwide, New York.
An estimated $100 million in direct business will be divided about evenly among the four shops. The four over the next 30 days will vie for a final estimated $25 million account for non-Web direct marketing to small- and medium-size business.
IBM and Wunderman are "discussing" whether the agency's status as direct shop for Apple Computer is a conflict, Ms. Kohnstamm said.
"We don't actually see a lot of major conflicts, but [agencies] understand [that] where they exist they will have to resign those or figure out a way to handle that in a way that's non-competitive," she said.
OgilvyOne, New York, is getting software, servers and services worldwide strategy and North American and European execution. IBM hasn't decided if OgilvyOne will handle software unit Lotus Development Corp.
Blau, based in Wilton, Conn., gains personal systems worldwide strategy and North American and European execution, plus direct mail and telemarketing work targeting IBM's 200 top customers.
Wunderman Cato Johnson, New York, will execute all direct work in Latin America and Asia/Pacific, and develop and execute global programs targeting specific industries. The Strategic Interactive Group of Bronner Slosberg, Boston, will develop and execute global Web-based programs targeting small- and medium-size business and 200 top customers.
Bronner "is the closest we've come to an interactive [direct] agency of record," Ms. Kohnstamm said.
However, OgilvyOne still will handle IBM Web banner advertising, which falls under the general rather than direct-marketing budget.
Copyright February 1998, Crain Communications Inc.