SGI last week moved its corporate ad account to McCann-Erickson Worldwide's San Francisco office, from CKS Silicon Valley, Cupertino, Calif., as expected (AA, April 20). But corporate ad spending is under scrutiny as SGI's new management team puts its strategy in place to cope with slumping sales and heavy losses.
In March, McCann beat out CKS and others for a $40 million account to launch SGI's new direct-marketed line of Intel/Windows NT workstations, initially dubbed Visual PC, with a fall campaign that will include print and quite likely TV.
SPENT $15 MIL IN FISCAL '98
Corporate spending for the next fiscal year, beginning July 1, is yet to be determined, said Patrick Tickle, director of corporate marketing. SGI is spending about $15 million globally through CKS for fiscal '98.
Mr. Tickle is in the midst of a major brand audit begun late last year. Landor Associates, San Francisco, is looking at the company's name, logo, sub-brands such as Cray Research and Visual PC, product names and other issues.
Mr. Tickle said it's conceivable SGI could adopt a new logo and a new name as part of its turnaround strategy.
"We're certainly open to it," he said, "but there are [costs] that go along with those things that could make it prohibitive right now."
SGI's current marketing challenge is "delivering a consistent, focused message to the marketplace and to our customers, and doing it on a sustained basis," Mr. Tickle said.
The corporate account wasn't officially part of the Visual PC review, though SGI executives had mulled consolidating at whatever agency won that business.
"The decision [to consolidate] was based on the strategic level of what was the right thing to do in building the brand," Mr. Tickle said.
NO GATEWAY CONFLICT
SGI signed its contract with McCann only after determining that Gateway 2000's estimated $50 million to $70 million account, snared last month by McCann's New York office, wasn't a conflict.
McCann Chairman-CEO John Dooner met with SGI to allay its concerns.
Members of McCann's SGI team are signing non-disclosure agreements. In addition, offices in the McCann network will work exclusively with either SGI or Gateway; no office can work on both accounts.
"We are totally convinced that the San Francisco office partnered with the best offices," Mr. Tickle said. "The San Francisco office got their first pick of offices [before Gateway signed on]. We don't feel we're playing second fiddle to anybody."