LOS ANGELES (AdAge.com) -- Recognizing just how paramount its wireless business has become, Verizon Communications is eliminating the company's chief marketing officer role and re-drawing the responsibilities of John Stratton, who will now assume duties for plugging the company's mobile offerings.
Mr. Stratton, 48, was Verizon's marketing chief companywide, looking after the marketing of both landline and wireless products for the country's No. 2 advertiser. Verizon Communications owns 55% of Verizon Wireless; Europe's Vodafone owns 45%.
The leading wireless carrier is melding its residential and business landline units, Verizon Telecom and Verizon Business, into a single business, saying the restructuring will move "marketing execution closer to customer-facing operations, while retaining the benefits of centralized management of key marketing issues." A company spokesman said he did not know when Verizon would name a marketing chief for its non-wireless business.
Verizon said Mr. Stratton's new post was not tantamount to a demotion. "A centralized marketing role is no longer necessary," a spokesman said. "This is in no way a reduced role. Wireless is Verizon's growth engine." Last quarter, wireless accounted for about 58% of Verizon's revenue, up from 50% a year ago. It also accounts for the bulk of the brand's $3.7 billion marketing budget, handled on the creative side primarily by lead agency McCann Erickson, New York.
"By putting marketing execution entirely with the restructured business groups, we will gain speed against our competition and respond better to our customers' wants and needs," said Verizon CEO Ivan Seidenberg in an internal memo. "By making this move we are again tightening up our processes by moving execution closer to our customers, while maintaining our focus on a single Verizon brand image." The memo said the wireless and landline groups will cooperate to divvy up marketing efforts that have a centralized mandate.
Industry analysts said Verizon made the right move to consolidate the residential and business units and carve out a distinct area of focus for Mr. Stratton, enabling him to sharpen his focus to reinforce Verizon's dominant position in the wireless market. "They're shedding the structure that worked in the old days, and [Mr. Stratton] will now have a clear direction for a major business," said Bob Rosenberg, who heads up telecom research firm Insight Research Corp.
Telecoms are losing residential customers at the rate of about 14% a year, said Mr. Rosenberg, while their wireless business is accelerating as more consumers sign up wireless data plans and portable devices such as e-readers and netbooks gain traction.
Having a dedicated marketing chief for wireless should bode well for Verizon, as it brings focus to an important business; besides, the idea of selling bundled wireless and landline services has been more talk than reality so it really isn't necessary to have the same person coordinate that proposition, some said. "It's two different businesses completely," said Larry Swasey, an analyst at wireless research firm Visant Strategies. "You really need to concentrate on each product and advertise to their strengths."
Mr. Stratton, who was appointed chief marketing officer in 2007 after a six-year run as Verizon's head of wireless marketing, will report to Lowell McAdam, president-CEO of Verizon Wireless. Mr. Stratton previously reported to Verizon President-Chief Operating Officer Denny Strigl, who announced his retirement several weeks ago. It was under Mr. Stratton's tenure that Verizon Wireless introduced the "Can You Hear Me Now?" campaign.