U S West is believed to have contacted regional ad agencies, while Ayer, concerned about declining fees as U S West looks to cut costs prior to a midyear restructuring, has had talks with other telecom marketers.
U S West declined comment by press time; executives at Ayer declined to comment.
"It's not a matter of unacceptable profit margins -- there are none [profits]," said a former Ayer executive familiar with the situation.
The executive added that U S West appears to be trimming its bottom line to look more attractive to shareholders before splitting into two companies in late summer or early fall.
The company's U S West Communications Group will be renamed U S West and include telephone, data and wireless operations; U S West Media Group will be renamed MediaOne Group, focusing on the broadband, high-speed cable service available in 19 states.
The separation still has to be approved by shareholders.
Margeotes/Fertitta & Partners, New York, handles advertising for the MediaOne brand, which broke a new $20 million campaign earlier this month (AA, March 16). Grey Advertising, Los Angeles, handles the Yellow Pages business, and Dailey & Associates, West Hollywood, Calif., handles wireless products and services.
WON ACCOUNT IN '96
Ayer won what was then a $60 million account in November 1996, when U S West was looking to strengthen its brand identity. The agency created the umbrella branding campaign themed "Life's better here."
U S West is said to be considering going back to multiple agencies; Ayer gained the business in a consolidation, from Campbell Mithun Esty, Minneapolis, and Rubin Postaer & Associates, Santa Monica, Calif.
Executives close to the account say Ayer would be uncomfortable switching from a role as brand steward to working with many different agencies in the same role.