Interpublic Group of Cos.' Mullen, Wenham, Mass., and Omnicom Group's DDB Worldwide, New York, have had discussions with AT&T marketing executives recently, according to several executives close to the company. Omnicom's Goodby, Silverstein & Partners, and independent Silver Melville Arbues, both San Francisco, and several other West Coast shops were approached late last year.
Mullen representatives said the agency has not had formal or informal discussions with AT&T. Representatives of DDB, the San Francisco shops and Y&R all declined to comment.
Cathy Constable, VP-advertising and marketing for the AT&T Consumer unit, said through spokesman Gary Morgenstern that "we talk to agencies all the time and agencies are always looking to get work from us. We're not looking for a new agency at the moment. We're very happy with the relationship we have with Y&R."
Mr. Morgenstern confirmed that late last year the unit spoke with several "boutique" shops on the West Coast. "We were looking to perhaps supplement some work we were doing in specific markets. We didn't move forward with any of them," he said. He declined to name the West Coast agencies or confirm more recent talks.
AT&T spent $416.9 million in measured media in the U.S. in 2001 and $356.6 million from January to November 2002, according to Taylor Nelson Sofres' CMR.
While there is no formal review, people familiar with the matter said that John Polumbo, president of the AT&T Consumer unit, is spurring the process of either seeking additional resources or a new agency. "Apparently Polumbo has some pretty strong opinions on advertising and marketing," said one agency executive.
Keeping AT&T happy is expected to be a top priority for Michael Patti, the incoming chairman-CEO of Y&R's New York office. "I have to believe that they're certainly holding [Patti] out as a great white hope. ... He will need to recruit a real superstar [creative]", the executive said.
Mullen is currently defending the $160 million Nextel Communications account, along with five other agencies. Discussions with Goodby, which was approached by AT&T late last year because of its experience with SBC Communications and Pacific Bell, could reignite given the fact that SBC and Goodby parted in January.
Y&R's ongoing campaign for AT&T features iterations of the company's blue-and-white logo morphing to show the brand's flexibility.
AT&T isn't the monolith it once was. Two years ago, the company split into four units-Broadband, Business, Consumer and Wireless. While Wireless retains the AT&T brand name, it is a separate company; the broadband division was gobbled up by Comcast Corp. Analysts said the brand remains sterling despite consumer confusion in the marketplace over various service offerings.
"AT&T has a unique opportunity that no other competitor has-the world wants them to succeed," said Jeff Kagan, an independent telecom-industry analyst.
"They're still the largest long-distance provider, but their business is shrinking. They're putting resources and time into local services," said Aurica Yen, senior analyst-consumer technologies, Yankee Group, explaining that regulatory issues makes the business even more uncertain.
Despite the internal chaos and industry woes, Mr. Kagan believes that AT&T remains one of the strongest brands in the world. "The marketplace expects them to own their space because there's a magic to the AT&T brand but the window of opportunity won't be open forever."
contributing: hillary chura, alice z. cuneo and lisa sanders