Inside Verizon Wireless review

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Verizon Wireless' decision earlier this month to put its account up for grabs was the culmination of a year-long struggle by Interpublic Group of Cos.to match the needs of a key client with those of an embattled 21st century holding company.

In an attempt to keep Verizon Wireless within Interpublic's domain, the holding company moved the marketer through three of its agencies in the last twelve months. "This reflects a macro problem of how these client relationships are handled at the holding company level," said one executive familiar with the events, who described the effort as throwing agencies at the marketer to see "what sticks."

cutting costs

Like most publicly owned marketing companies, Interpublic had been-and continues to be-forced to cut costs. That pressure sparked Interpublic's decision, announced in February 2003, to merge two of its New York agencies, Bozell, agency of record for Verizon Wireless, and Lowe.

When briefed about the decision by Interpublic management prior to the announcement, Verizon Wireless initially balked at the idea of the merger, according to a number of current and former Lowe executives. Senior Interpublic management, including then vice chairman (and now CEO) David Bell, however, addressed the client's concerns and eventually won Verizon Wireless' support for the move.

Bell's efforts to keep Verizon in the family were aided by the fact that Bozell had long been part of a Verizon success story, which had seen the company ranked as the leading cellular service provider since its inception in early 2000, according to market researcher Yankee Group, Boston. In early 2002 Bozell had introduced Test Man, the popular, hardworking, geeky icon of Verizon Wireless' continuing "Can you hear me now?" campaign.

"An agency gets some credit," said one executive familiar with the Bozell/Verizon Wireless relationship. "It is easy to fire an agency when your business sucks. But when things are going well and you are in the midst of a landmark campaign, it is not."

But, despite this goodwill, relations with Lowe began to sour last summer. Chief among the reasons was turnover among senior creatives. In March, Executive Creative Director David Nobay left, and Group Creative Director Richard Wallace took the helm, but the relationship did not jell. Dean Hacohen, exec VP-executive creative director, was then asked to take the creative lead. Additions and changes on the account-management side resulted in a strained client-agency relationship, said executives familiar with the situation.

evolving test man

The cutthroat competitive environment in which Verizon Wireless operates heightened the impact of the relationship difficulties. The marketer, according to executives familiar with the situation, wanted solutions that would evolve the Test Man campaign beyond its current emphasis on network reliability. But solutions, some executives said, were slow in coming.

"Eventually the work got there, but the process to get from assignment to on the air was very painful," said one executive familiar with the situation. Other executives said the agency's mission was complicated by Verizon Wireless' approval process, as well as by corporate infighting.

Moving from concept to delivery was complicated, in at least one case, by the marketer's submission of an overly aggressive claim for a TV spot for its push-to-talk service, a walkie-talkie function offered by competitors such as Nextel. One spot promoting the service had to be pulled when Nextel in September sued Verizon Wireless, alleging false advertising for claiming that Verizon Wireless' network was the best and most reliable.

sibling rivalry

By early fall, Interpublic CEO Mr. Bell stepped in, calling on four Interpublic agencies (McCann-Erickson, New York; Hill Holliday, New York; The Martin Agency, Richmond, Virginia; and Deutsch, New York) to help on Verizon Wireless. Martin and Deutsch opted out of the project. Hill Holliday dropped out after a short time, leaving McCann-Erickson and Lowe. Throughout December, the two siblings were pitted in a competition to win a product introduction project. McCann prevailed.

Still, Verizon Wireless' decision, announced late Jan. 16, to open a review beyond Interpublic agencies was unexpected. One executive familiar with the scenario said that in a meeting the week of Jan. 5 between Verizon Wireless CEO Denny Strigl and Interpublic's Mr. Bell, Mr. Strigl informed Mr. Bell the marketer was unhappy.

Meanwhile, Mr. Strigl's top marketing executive, John Stratton, according to executives, wanted to move entirely to McCann, which Mr. Strigl did not champion, reasoning it made no sense to be limited to Interpublic. Verizon Wireless is interviewing consultants to handle the review. McCann will lead the Interpublic effort.

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