Young & Rubicam hit the ground running after picking up AT&T's prized $100 million-plus corporate branding account last week.
AT&T had planned to launch a massive corporate-image effort Sept. 23, a year after the telecommunications giant announced it was splitting into three companies.
Because of delays in deciding the review, however, Y&R is now unlikely to have work on the air before early October.
DEFINING AT&T'S PLACE
The campaign's aim will be to define for consumers AT&T's place in a deregulated and increasingly competitive market. Billings on the corporate account could as much as double next year to $200 million, 20% of AT&T's $1 billion in annual ad spending.
Although few creative details are known, Y&R's strategy is said to focus on the concept of "consumer empowerment."
The appointment of Y&R came abruptly and amid speculation the decision would be delayed again after AT&T President Alex Mandl unexpectedly announced last week he was leaving to run Associated Communications. Mr. Mandl had been supervising the review, but executives close to the situation said he had clashed with AT&T Chairman Robert Allen over the direction of new AT&T branding.
DELAYS IN REVIEW
Their differences led to delays in the review, originally scheduled to be decided by mid-July; a selection then would have given the winning agency time to meet AT&T's late September deadline.
Mr. Mandl's departure was not believed to be linked to the account review, but there is speculation the executives' differences over how the company marketed itself may have made his decision to leave a little easier. An AT&T spokesman denied the clash, noting, "With a brand as big and complicated as AT&T, the review process has to be meticulous. Mr. Mandl and Mr. Allen were both involved with key points and had opportunities to weigh in their own ideas and perspectives."
In what some executives have called a "make-good," AT&T also awarded additional business to FCB/Leber Katz Partners, New York. According to the spokesman, it will "depend on the kinds of services [AT&T] brings out."
'TOO MUCH AT STAKE'
"We have too much at stake to be playing games," he added. "FCB will remain our lead consumer agency."
FCB is said to have won the first round of the review with creative that centered around the Beatles' song "All Together Now."
Although Mr. Mandl and Joseph Nacchio, AT&T president of consumer communications services, are said to have preferred FCB, Mr. Allen apparently wasn't happy with any of the initial pitches and ordered the review into a second round.
AT&T's other roster agencies, BBDO Worldwide and McCann-Erickson Worldwide, both New York, also participated in the review.
Observers said there is pressure on AT&T's agencies to help revive its flagging long-distance market share.
"AT&T is sending a message to FCB with this because their market share is falling lower each day," said Brian Adamik, an analyst with Yankee Group. "AT&T is sending a clear message that if the numbers aren't there, it's more than ready to move its account," he said.
Y&R already handles advertising for international long distance, AT&T WorldNet and special markets including the military. It is also buying Media Edge from Adcom, which handles media for AT&T.
Y&R ON A ROLL
Last week's win continues a strong new-business swing for Y&R, which is also a finalist in United Airlines' $100 million global account review.
In addition to finding a new president, AT&T will be struggling with how to handle the seven regional service organizations it formed earlier in the year to manage the company's entry into the local-service market.
Integrating advertising initiatives could present internal conflicts for AT&T as it balances regional and national marketing.
Contributing: Mark Gleason, Jane Hodges, Laura Petrecca and Pat Sloan.
Copyright August 1996 Crain Communications Inc.