As first reported on Adage.com, SBC last week parted with long-time agency Omnicom Group's Goodby, Silverstein & Partners, San Francisco, which handled consumer advertising. The estimated $100 million in billings will now be split among Omnicom siblings Merkley Newman Harty & Partners, New York, and GSD&M, Austin, Texas, and possibly other roster shops. SBC spokesman Larry Solomon said there would be no review. "Goodby has done some outstanding work for us in the past, but moving forward we decided to head in a different direction," he said.
As SBC moves onto a broader playing field, it's expected to market bundled telecom services requiring a far greater level of integration than it has to date. "SBC is going through a brand transformation, they're trying to create one national master brand," said Jeff Kagan, an independent telecom industry analyst. Mr. Kagan noted that SBC, which covers a 13-state territory, is gunning to become a one-stop shop for local, long distance, data and wireless services (SBC has a 60% stake in Cingular Wireless, Atlanta).
Goodby had handled advertising for the Pacific Bell brand since 1994. SBC acquired Pacific Bell in 1998. Most recently, Goodby had worked on product and retail advertising for Digital Subscriber Line, long-distance services and other offerings. The move follows the shop's loss last spring of an important branding assignment to Merkley, the launch of the SBC brand in California.
An SBC spokesman declined to specify the reason for the split, nor would he comment on the company's marketing plans or how Goodby's duties, mostly product advertising, would be parsed among the other shops. Merkley has handled SBC's corporate brand work since May 2002. GSD&M is responsible for media buying and planning estimated at more than $350 million; Omnicom sibling Rapp Collins, Dallas, remains the telecom's direct marketing agency; Rapp Digital, also Dallas, handles interactive. Independent Rodgers Townsend, St. Louis, Mo., handles business-to-business media planning. The agencies, including Goodby, referred all calls to SBC.
SBC, second to Verizon Communications in local telecommunications, controls more than a third of the U.S local market and is the nation's largest DSL provider. The Ameritech, Pacific Bell and other regional brands that existed pre-SBC's acquisition will fade away, Mr. Kagan said.
SBC is "no longer the local phone company in a market-by-market battle. They're now in a national battle against the national brands."