The computer marketer's move comes amid mounting losses, plummeting market share and management turmoil as backer Samsung Electronics struggles for a turnaround at AST.
AST's advertising has been at Rogge Effler & Partners, formerly Lord, Dentsu & Partners, Los Angeles, since it moved from Team One, El Segundo, Calif., in February 1994. Mike Agate of Select Resources International, a Los Angeles-based ad agency search company, has contacted several agencies about a blind review for a $15 million to $20 million tech account that executives say is AST. Mr. Agate also ran AST's 1994 review.
MARKETING IN FLUX
The move comes as AST's marketing is in flux. On Oct. 4, it consolidated marketing under a new post of senior VP-global corporate marketing and communications, but hasn't filled the slot. Matt Sargent, analyst with Computer Intelligence InfoCorp, said he wouldn't be surprised to see a Samsung executive take the position.
Grant Johnson left Oct. 30 as director of worldwide corporate marketing. Mr. Johnson told Advertising Age on Oct. 24 he was not aware of any review in the works, though Mr. Agate already had contacted agencies. On Oct. 30, Mr. Johnson said he couldn't comment "officially or unofficially to confirm or deny" a review but that it was "a possibility" he would consult with AST if there were a review after he left the company.
Mr Agate has declined to comment, and an AST spokesman had no comment at press time.
AST's U.S. share among computer dealers collapsed to 1% last month from 4% a year ago, when AST ranked fifth in the market, according to Computer Intelligence.
9 QUARTERS OF LOSSES
AST has lost money for nine consecutive quarters, dropping $98.7 million in the second quarter as revenues fell 16% to $553.7 million. The bust comes as the industry booms with double-digit growth. Top brands like Compaq, IBM and Dell are growing even faster, raising questions about the viability of brands such as AST.
"It's a company without a direction," Mr. Sargent said. AST is weak in brand, product differentiation and distribution, he said, and the future "doesn't look good." But "they have deep pockets with Samsung, so they're not going to go away," he noted.
South Korean giant Samsung bought a 40% stake in AST last year and this summer raised its stake to 49.9%.
Samsung executive Y.S. Kim was installed as president-CEO in August, and a string of executives have exited since then, including the heads of the American and Asia Pacific regions and VP-Americas Marketing Larry Fortmuller.
Joe Norberg returned in September to Hill, Holliday, Connors, Cosmopulos, Boston, as chief operating officer after a four-month stint as AST chief financial officer.
AST has announced plans to introduce consumer electronics products developed with Samsung in the second quarter, crowding into the same converging computer and consumer electronics market as powers like Sony Corp., Compaq Computer Corp. and Philips Electronics.
Samsung's brand image is rising in the U.S., but Mr. Sargent said AST's weak brand and poor retail relationships won't help the joint initiatives.
AST NAME SHOULD SURVIVE
Still, observers don't expect Samsung to dump the AST name in favor of Samsung.
AST, which started in 1980 in the early days of PCs, showed signs of becoming a top-tier brand in the early '90s when it began higher-profile ads and then bought Tandy Corp.'s PC business. But AST soon started hemorrhaging money.
Under a now-departed CEO, former Apple Computer executive Ian Diery, AST this year stepped up ads. Spending in computer and business publications through September was up 54.4% to $8.4 million, Adscope estimates.
AST this year drew attention for introducing a PC for below $1,000 at Wal-Mart Stores, but it's a low-end, low-margin product that does little for AST's image.
"AST just doesn't have a [compelling] message," Mr. Sargent said. "AST's message is `We're the best-engineered product.' Maybe it's true, but you really can't see it."