After turbulent ride, Goldberg bids Dell adieu

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Six years ago, Dell Computer Corp. executives gave Goldberg Moser O'Neill the gold hoop that hangs in the agency's hallway.

The way Fred Goldberg and many on his staff see it, that's the one hoop they won't have to jump through anymore.

The San Francisco shop's resignation this month of the $70 million to $90 million Dell account ended an 11-year hitch--the longest existing relationship between an ad agency and a major computer marketer.

The end of the road was rocky. Last month the agency, hot in pursuit of a recently established goal to raise its creative bar, presented what it considered a strong concept for Dell's Home & Small Business Group. Paul Bell, the division's general manager and a by-the-numbers former management consultant, ended the meeting with some news: The division's account was in review.


Mr. Goldberg initially accepted an invitation to participate. But within a few days, he sent Dell a letter of resignation.

The split really was no surprise. There had been reports of friction and rumors of review over the past year. Twice Dell passed over Goldberg for brand assignments.

"They are a great company, and they helped grow this agency," said Exec VP Mike Massaro, who helped win the business in August 1988 and then ran the account. "I feel like I personally had an incredible ride with them, but it's time."


What a ride, indeed. Michael Dell, then age 23, hired the shop--then Chiat/Day's San Francisco office--four years after he began assembling PCs in his Austin, Texas, dorm room and two years after Chiat's seminal first run with Apple Computer ended. Dell had sales of $159 million and had $10 million to $15 million to spend on ads. It ranked 20th in the PC market.

"No other company since Apple has had such a unique approach to the computer business," Mr. Goldberg said in the press release announcing the win. "Our challenge is to show how easily and confidently you can now buy the highest performance, best quality PC over the telephone."

Goldberg Moser and Dell both delivered. In '98, sales passed $18 billion; one research report said Dell swept past Compaq Computer Corp. in the first quarter to become the nation's top seller of business PCs.

Early on, Goldberg Moser helped build Dell with the feistiest comparative advertising in the computer industry, broadening the company's view of its competitive set by moving it away from other mail-order companies to take on IBM Corp. and Compaq.

Mr. Goldberg initially set Dell's ad sights on retailers. In the next phase, the attack was even more pointed: a direct hit on Compaq.


In a series of print ads, the agency developed side-by-side photos of computers. Copy under a Dell PC: "The lap of luxury," with a $3,899 price tag on the screen. Under a Compaq model: "The lap of lunacy" with a $6,799 price.

In another, photos of Dell machines were placed under the line, "To market, to market, to market we go." Next to it were Compaqs: "To the cleaners, to the cleaners, to the cleaners, you go."

Dell attacked. Compaq sued. Newspaper headlines ensued. When the battle was over, Dell had emerged as an alternative to a brand that was on its way to be the world's biggest PC brand. Compaq now is floundering in the PC market--largely because of business it is losing to Dell.

Dell's business has changed greatly since those early days. It is far less reliant on product-and-price ads than when it signed Goldberg; much of Dell's business today comes from relationships with large corporate customers that place orders through dedicated Dell reps and through customized Web commerce sites Dell offers corporate buyers.

In a way, the demand-generation ads give a false impression that Dell is still a mail-order PC company whose success is based on cheap PCs; Dell's success today is largely tied to its emphasis on customer service and long-term relationships, not simply to the price of its box.


Recognizing a need to explain the brand more fully, Dell in late 1997 moved to do its first global brand campaign. Goldberg, which had been pushing Dell to do branding for several years, learned from Advertising Age that the marketer was contacting agencies.

Dell ended up with J. Walter Thompson USA, New York and Chicago, which had a strong boardroom endorsement from former Philip Morris Cos. Chairman Michael Miles. Mr. Miles had worked with the agency when he was at Kraft. But the JWT/Dell relationship bombed, with agency and client filing counter-suits last fall.

Dell VP-Corporate Branding Scott Helbing turned the estimated $100 million brand assignment over to BBDO Worldwide, New York, which had close ties to Mr. Helbing from earlier work at Pizza Hut.


Before hiring BBDO, Mr. Helbing gave Goldberg a second shot at the brand account. Mr. Goldberg said he received a call on a Thursday asking to present ideas for a global campaign the next Tuesday.

"Like idiots, we said yes," Mr. Goldberg said.

BBDO prevailed.

There remains only one member of the 1988 agency selection committee: Michael Dell. A decade ago, he sat in Goldberg's conference room, pounding numbers into a calculator to figure out what magazine ads he could afford. Today, he has a global business to run and is little involved in advertising.

Both client and agency are moving on. Said Mr. Massaro: "We'll do it with somebody else."

Copyright April 1999, Crain Communications Inc.

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