IS LOYALTY DEAD?

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Fox Inc. and IBM Corp. put "back to the future" all over the front pages last week.

Rupert Murdoch-as though he were telling Procter & Gamble's Ed Artzt, "Don't worry; you'll always have a TV network to run your commercials on as long as I'm around"-plunked down $500 million to pick up a dozen TV stations for his Fox Television Network, eight of them from CBS.

And so, despite all the wailing about how the new media might soon undermine network TV's advertiser efficiencies, Mr. Murdoch and Fox have delivered a powerful statement concerning their confidence in broadcast TV's continued strength as an advertising medium.

A day later, IBM without warning fired more than 40 ad agencies on its worldwide agency roster in order to consolidate up to $500 million in billings in one agency, an agency with certified global reach- Ogilvy & Mather Worldwide. IBM's decision to pursue a centralized approach to marketing communications comes at a time when so many other giant companies are targeting, niching, slicing and dicing their messages to customer groups in the U.S. and across the world.

As dramatic as IBM's consolidation was, there is an important little footnote that came to our attention, one worthy of passing along.

We all know that before Ogilvy was named IBM's agency it had to resign two accounts, Microsoft Corp. in the U.S. and Compaq Computer Corp.'s European account, billing about $75 million in total. If the exercise ended there, we know everyone would be saying, or thinking, "Well, that's the agency business; you resign smaller accounts when you can get a bigger account in the same category." No such thing as client loyalty.

Well, that was before we learned IBM first tried to interest Omnicom's BBDO Worldwide in its account, and BBDO declined. You see, BBDO has a long-standing relationship with Apple Computer, and while Apple is a much smaller account (perhaps $125 million worldwide), BBDO would not turn against it for IBM.

So now we're all left to think harder about the agency business of today. Even in the publicly held agency world, where BBDO and its Omnicom parent reside, there is, after all, such a thing as loyalty. And, of all the winners in last week's major moves, maybe in the long run BBDO will be the biggest winner of all.

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