WorldCom calls $70 million MCI account review

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WorldCom is calling on agencies to compete for its $70 million MCI-branded consumer business now at Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York.

The No. 2 long-distance pro-vider last week sent out RFPs to at least 20 ad shops about its U.S. consumer advertising account. The business in review consists mainly of its 5 cents-per-minute promotions, currently pitched through ads featuring basketball great Michael Jordan and Warner Bros. Looney Tunes characters. Messner Vetere has handled the MCI brand since 1990 and will defend the business.

CHANGING LANDSCAPE

"MCI wants to be clear about what direction is right for them," said Messner Vetere CEO Ron Berger. "They want to make sure they have the right strategic direction and strategic partner moving forward in this changing landscape."

The contested U.S. consumer business accounts for an estimated 18% of Messner Vetere's $388 million in total billings for WorldCom. A WorldCom spokeswoman said the agency's other WorldCom accounts -- including dial-direct services such as 10-10-220, business-to-business services and 1-800-Collect -- are not in review. Messner's parent, Euro RSCG Worldwide, is also on safe footing with its WorldCom business in Brazil, France and Mexico, she said.

"If you want to stay competitive, you've got to keep examining yourself," said the spokeswoman. An agency decision is expected by December, she added. Gretchen Gehrett, WorldCom VP-advertising, is overseeing the review.

The spokeswoman added Messner Vetere's ability to retain the account shouldn't be discounted. "Just because we're conducting an agency review doesn't mean that we're going to change agencies," she said.

FUTURE ADS

It's unclear if future MCI-branded advertising will showcase Mr. Jordan or the Looney Tunes characters. Mr. Jordan and Warner Bros. both have long-term contracts with WorldCom. "There's no decision about what our next round of advertising will look like," the spokeswoman said. "It's premature to speculate."

WorldCom's evaluation of its consumer accounts comes at a tumultuous time in the telecom industry. WorldCom's proposed merger with Sprint Corp. was derailed by regulators earlier this year, while its chief rival, No. 1 long-distance provider AT&T Corp., has seen its stock plummet. MCI's consumer service evaluation also comes as smaller companies such as Southwestern Bell enter the long-distance market.

WorldCom CEO Bernard Ebber has said he may sell or spin off the long-distance unit as the company shifts focus to core corporate and data businesses. Another option is to issue a tracking stock for the division. The MCI spokeswoman said as the company "moves from long distance to all business" such as wireless and Internet services, MCI will examine all of its holdings.

GOING BROADBAND

Telecom analyst Jeffrey Kagan said MCI's latest move dovetails with other telecom companies evaluating their position in the market. "The long-distance business as we knew it is going away," he said. "Long term, there's not going to be long-distance companies or local companies. They're all going to be broadband companies. Consumer long distance is clearly in a transitional phase . . . and MCI is clearly signaling that they need to recast themselves."

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