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Acer America Corp. last week split with Hal Riney & Partners, San Francisco, as the PC marketer slashes ad spending, turns away from brand ads and undergoes significant changes in marketing management.

Acer is moving creative to San Francisco ad boutique Kahn/Weber/Harris, which will initially handle on a project basis but is likely to be formally awarded the account

Riney will keep media buying and planning for now, though a review is planned.


Acer, a standout performer in 1994 and '95, stumbled badly last year. Its U.S. PC market share dipped to 3.3% from 3.7% in '95, according to Dataquest. But the problem was a downward momentum quarter by quarter: U.S. unit sales grew 23% in the first quarter of '96 vs. 1995; 9.5% in the second quarter; 3% in the third, as Riney's campaign began; and then dropped 15% in the fourth.

Acer America began a TV and print brand campaign late last summer (AA, July 29).

"Acer had a lot of negative momentum exiting '96," said Dataquest analyst Scott Miller. "Sales in 1997 have not rebounded to the point where . . . that negative momentum will be stopped. They are not getting any help from the market."

Acer America's '97 U.S. ad budget is estimated to be $10 million, half last year's nearly $20 million.

VP-Marketing Marlene Wil-liamson said Acer is cutting ad spending but keeping the marketing budget even, freeing money for retail promotion, trade shows, public relations and other non-media efforts.


Ms. Williamson said senior management at parent Acer Group in Taiwan asked Acer America to shift advertising to products from brand image, leaving the parent company to field brand campaigns. Acer Group hired Riney for a new $7 million to $10 million global brand account two months after the U.S. unit hired the agency in January 1996. Riney retains the global account.

A series of competitive changes have caused Acer to shift gears. Top-tier players including Compaq Computer Corp. have cut prices, squeezing Acer in the home PC market.

In January, Acer agreed to buy Texas Instruments' global notebook business, and Acer America plans to reallocate marketing money to push notebooks, which for three years will be dual branded Acer/TI products.

TI, with a well-regarded notebook line, managed a 1.4% U.S. PC market share last year, up from 1% in '95. Still, Acer remained stuck in ninth place even with TI's market share, Mr. Miller said.

After Acer agreed to buy TI, executives said the notebook assignment would move to Riney from TI's agency, McCann-Erickson Worldwide, Houston. Instead, Ms. Williamson said, Acer decided to rethink all advertising.


"It was our decision [to leave Riney], but it was extremely amicable," Ms. Williamson said. "I have no regrets whatsoever about hiring them to do our branding campaign. That was their charge, and they executed it very well."

Also last week, Tom Henry left as Acer director of marketing communications, taking the post of VP-marketing and brand development for Crescent Jewelers and Friedman's Jewelers. Steve Weeks is leaving as marketing communications manager

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