AT&T Wireless is in a strong position for the next battle in cellphones despite the confusing mLife corporate branding campaign. Now it's up to Goodby, Silverstein & Partners to refocus a fuzzy image.
The nation's No. 3 wireless service likely will proceed with an ad concept presented in a stealth pitch by Omnicom Group's Goodby, which snared the corporate-branding assignment last week. The news was reported first on AdAge.com. Billings are expected to be $125 million with an opportunity to grow significantly. "This is the coolest," said Jeff Goodby, co-chairman of the San Francisco shop. "It's as good as it gets."
WPP Group's Ogilvy & Mather Worldwide, New York, retains the bulk of the marketer's $700 million budget, including the retail newspaper, business-to-business and GoPhone prepaid-service accounts. Media buying and planning remains at WPP's Mediaedge:cia; newspaper buying stays at Newspaper Marketing Services, part of Interpublic Group of Cos.' Newspaper Services of America.
"The good news is that we retain the lion's share of the business and remain on good terms with [AT&T Wireless] leadership," one Ogilvy executive said. An Ogilvy spokeswoman said: "We have a fantastic assignment with a great brand, and we're committed to building the business."
Goodby's win is testament to Omnicom's ability to manage conflicts. TBWA/Chiat/Day, New York, won Nextel in May; BBDO Worldwide, New York and Atlanta, has Cingular Wireless; SBC Communications, a partner in Cingular, works with GSD&M, Austin, Texas, and Merkley Newman Harty & Partners, New York; DDB Worldwide, Chicago, has Alltel Corp.
AT&T Wireless' mLife theme, launched during the February 2002 Super Bowl, was criticized as obtuse in a category where rivals such as Verizon Wireless (service quality) and T-Mobile (value) present clearer images.
Mr. Goodby said the biggest challenge for telecoms is that so much advertising pushes features and price. "It doesn't register on people as much as it used to," he said. Instead, consumers have to be reached on an "emotional" level: "AT&T Wireless has the best name and the best technology. We've done the research to prove it."
Goodby got a call from AT&T Wireless about four months ago-shortly after the agency split with SBC-asking for information on what it had done for brands such as Hewlett-Packard Co.
Several meetings followed. AT&T Wireless then asked Goodby for a full creative presentation. That work is likely to be the first for AT&T Wireless, pending further testing. Mr. Goodby wouldn't comment on creative. AT&T Wireless declined to comment on the direction of brand work or to make Chief Marketing Officer Michael Sievert available.
Goodby executives went to great lengths to keep the AT&T work secret, even from employees working on the pitch. Mr. Goodby said he told his staff the agency was pitching Nextel.
Ogilvy was scrambling for months. Other agencies had been circling, and the agency picked up rumors that a shop had won an audience with the client. Ogilvy executives assumed that meant Goodby; Mr. Sievert had worked closely with Goodby at E-Trade Group. AT&T Wireless earlier this year gave Ogilvy top marks for retail work but expressed concerns about mLife TV brand ads. Ogilvy responded by offering two alternative concepts in May, one without mLife (AA, July 7).
The branding loss is a blow to Ogilvy. The agency made IBM Corp. synonymous with "e-business," gave Motorola back its "moto" and moved BP "beyond petroleum." Yet many people still can't answer the question in early AT&T Wireless teaser ads: "What's an mLife?" Ogilvy won the account three days after AT&T Wireless spun off from AT&T Corp.; it lost the assignment 48 hours shy of its two-year anniversary with the client.
AT&T Wireless market share fell to 16.6% in the first quarter vs. 16.9% when mLife began, according to Yankee Group. It's No. 3 in U.S. subscribers at 21.1 million, behind Verizon Wireless (33.3 million) and Cingular Wireless (22.1 million). But AT&T Wireless is a contender. "AT&T Wireless has traditionally been focused on high-value customers who are less likely to churn; they have a disciplined [customer-relationship management] approach, loyalty programs and targeted offers," said Yankee senior analyst Linda Barrabee.
That could position AT&T Wireless for the next battle: wireless-number portability. A flurry of advertising is expected by fourth quarter as a new rule, set for Nov. 24, enables consumers to take wireless phone numbers with them if they switch carriers. The rule is expected to spur defections among consumers dissatisfied with their wireless carriers.
Telecom analyst Jeffrey Kagan said carriers will need to give consumers a reason to stay beyond price and quality networks. And despite the mLife misstep, Mr. Kagan noted, AT&T Wireless has "one of the strongest brands in the world."
contributing: claire atkinson and tobi elkin