Struggling Motorola Restructures Agency Relationships

Handset Maker Close to Naming Ogilvy, MindShare to Lead 'Partnerships'

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PHOENIX (AdAge.com) -- With rival Nokia moving aggressively to build its worldwide lead through marketing, and the iPhone rattling the handset marketplace, struggling Motorola has begun to restructure its marketing, from its agency alignment to its internal organization.
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Motorola is not only revamping its communications strategy; the marketer is also looking to move marketing into product development, a crucial aspect of the new cellphone wars.

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CMO Casey Keller, in an interview with Advertising Age during the Association of National Advertisers conference here, said he has abandoned a short-lived plan announced by the late Geoffrey Frost to allow Omnicom Group, spearheaded by BBDO, to lead agency relationships. Instead, Mr. Keller said he is in the process of finalizing a new agency alignment for consumer-directed marketing with some of the final decisions coming as soon as this week.

WPP Group's Ogilvy & Mather, currently the marketer's agency for Latin America and Asia, is being considered for additional duties in North America and possibly Europe, he said. Omnicom's AMV BBDO, London, is the incumbent on the European assignment.

Mother in the mix
In addition, two to three "creative hot houses" will be hired for projects. The first agency appointed is Mother, New York and London, which will be handling music devices and one or two other projects.

On the media side, Mr. Keller said he is assessing Motorola's $200 million to $300 million global media account. The incumbent for that business, WPP's MindShare, appears to have an upper hand in those discussions, he said.

"We're trying to create real partnerships -- that doesn't necessarily mean one agency -- but we're trying to create more consistent partnerships on the agency side on the both the B-to-B and B-and-B-to-C marketing communications efforts," he said, referring to business-to-business and business-and-business-to-consumer marketing efforts.

In recent months, Mr. Keller completed the consolidation of Motorola's B-to-B advertising under BBDO, a business estimated at $20 million to $40 million. But otherwise, Motorola's attempts to work with a number of Omnicom agencies have failed. First, Goodby, Silverstein & Partners never produced a long-expected branding campaign, with agency executives there eventually declining to work with a client some considered unable to make decisions.

Earlier this year, TBWA, San Francisco, offshoot, Cutwater, was close to being announced as Motorola's new agency of record for creative, having picked up the crucial assignment for the Razr2 phone. However, that contract never materialized and the relationship was doomed this fall after the shop failed to get a spot costing more than $750,000 on air.

The Razr conundrum
This particular battle raged on two fronts. First, the director Cutwater hired for the spot, Michel Gondry ("Eternal Sunshine of the Spotless Mind"), wrestled with the agency and marketer over creative control. But there was a second issue: should the campaign emphasize slimness, the Razr's "sharp" look that once made it a hot best-seller, or some of the phone's product attributes, an issue that has become important as cellphone morph into multimedia devices, especially following the launch of the feature-rich iPhone.

At the last minute, according to an executive familiar with the situation, Ogilvy, which produced a commercial focused on slimness through its Beijing office, was selected for the launch. Eventually, the Cutwater spot was put up on the web.

Mr. Keller praised the work of Ogilvy Beijing's executive creative director, Nils Andersson, but indicated there were barriers to Mr. Andersson's taking control of the Motorola account should Motorola choose consolidate at the agency.

Mr. Keller also is moving to ease internal creative difficulties around the company's ad production. Elena Panizza, an Italian who serves as Motorola's in-house worldwide creative director and often tangled with the Omnicom shops, will now focus on branding issues, such as how Motorola, going forward, will handle its "Hello Moto" tagline, as well as its bat-wing logo. "She will help define Motorola at the next level, Mr. Keller said.

Product development
Perhaps more important than the intrigue around Motorola's agency gyrations, Mr. Keller, a package goods veteran famous for spearheading green ketchup at Heinz, also is trying to retool the Motorola organization to move marketing into product development, so product designers, marketers and "all will talk together and design together."

These teams, he said, will understand market segments emerging in the mobile phone arena – teens, for example, are looking for music players -- and decide "how to design a phone for that audience." This focus on market segmentation will enable Motorola to "get a regular drumbeat of products," he said. "We are making decisions on our portfolio and are not just throwing spaghetti on the wall," said Mr. Keller.

Good thing. Motorola is the top handset supplier to three of the top five U.S. operators, according Strategy Analytics data for the second quarter of this year. However, the report said sales of Razr and its derivative phones are slowing, with LG, Samsung and Sanyo slicing Razr sales. The world's largest handset manufacturer, Nokia, newly reorganized on the marketing front with Wieden & Kennedy for creative and JWT for global distribution, is gaining ground in the U.S., the report said.
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