Behind Sprint CMO Bill Malloy's Marketing Shake-Up
For a telecom exec little known in adland, Bill Malloy sure knows how to make an entrance.
He quietly slipped into the chief marketer post at Sprint early this fall, but made his presence known this week by swiftly firing longtime agency Goodby Silverstein & Partners and appointing a Publicis Groupe team to direct the carrier's $1.4 billion in U.S. ad spending.
It's a familiar tale -- with a new CMO comes entrenched relationships, so incumbents beware. Still, Mr. Malloy, just months into a new job, is showing himself to be especially decisive and unconcerned about maintaining the status quo. Goodby is one of the darlings in the agency world, and the shop's unceremonious firing would be unthinkable to many large marketers. And while all the leading U.S. carriers employ ad agencies that have grown up making big-budget commercials for TV, Mr. Malloy has scrapped that model for a team lead by a digital agency, Digitas .
Mr. Malloy declined to comment for this article and Digitas referred all calls to the client.
Bill Morgan, Sprint's previous top marketer, was one of Goodby's many fans. In his four years at Sprint he became close to the shop. He was also a fan of the shop's headquarters city, San Francisco. He has family there and throughout his tenure at Kansas City-based Sprint, Mr. Morgan would commute frequently between the two cities.
Mr. Morgan's departure was announced only internally in September; Mr. Malloy was simultaneously appointed chief marketing officer, a loftier title than Mr. Morgan had (senior VP-marketing). Since taking the post at Sprint, Mr. Malloy has permanently relocated to Kansas City from the northern suburbs of Chicago.
Sprint CEO Dan Hesse himself was likely responsible for bringing Mr. Malloy aboard. They were contemporaries at AT&T Wireless and have known each other for years. At AT&T, Mr. Malloy led the team that created AT&T 's flat-rate for national calls on mobile phones, which was largely transformative for the industry. Mr. Malloy's time at the company overlapped with Mr. Hesse's tenure as president-CEO of AT&T Wireless Services.
Mr. Hesse, nearing the five-year mark as Sprint chief, has faced a tough challenge differentiating Sprint in a smartphone-hungry market where its major competitors, AT&T and Verizon Communications, had quickly aligned with leading paltforms iPhone and Android, respectively. The industry faces stifled growth as most Americans already own mobile phones and many are already upgrading to internet-connected devices.
Mr. Malloy also has history with Tony Weisman, the Digitas Chicago president that will lead Publicis' so-called Team Sprint. This pair attended management courses at Northwestern University together in the 1990s. One executive said Mr. Malloy consulted the agency on the wireless industry, given it had no clients in the sector and was looking to enter the category. In more recent times, the two began holding meetings at Digitas' Chicago office.
Mr. Malloy came to Sprint from Seattle venture firm Ignition Partners, where he advised on the company's telecom and wireless investments and represented Ignition on boards, including one for Extend America -- a company, coincidentally, acquired by Sprint.
Early in his career, Mr. Malloy spent time on the agency side. He jumped from the agency serving McCaw Cellular to the client-side to lead national marketing. Perhaps it was that agency experience that made Mr. Malloy feel comfortable enough, upon landing at Sprint, to reevaluate the company's agency relationships himself without the help of an outside consultant or, for that matter, many of his own people.
According to one person close to the situation, the announcement last Wednesday about Sprint's new agency not only came as a complete surprise to its agencies such as Goodby, EuroRSCG and Mindshare, but also to certain members of Sprint's own marketing team that weren't made aware of the impending shift until late in the game.
Mr. Malloy is said to have ultimately decided that there wasn't a need for work spread across holding companies Omnicom, WPP, Publicis and Havas and so, after evaluating the options, he chose to consolidate the bulk of Sprint's business at Publicis. He is attracted to the multidisciplinary work that the holding company has done for several major marketers, such as General Motors, Citibank and Procter & Gamble, and is hoping for similar results.
The changes brought an unwelcome surprise at the end of the year for Omnicom Group's Goodby, Havas' EuroRSCG and WPP's Mindshare. While the latter shop still remains the carrier's media agency of record, some industry executives think there's reason to believe that Publicis Groupe could secure the media account down the road too.
One incentive for the formation of "Team Sprint" rather than handing the business to any one entity could have been other conflicts within the Publicis Groupe network; collectively, the holding company works on AT&T , T-Mobile, Deutsche Telekom, Orange, and Rogers Communications.
While Digitas is leading Team Sprint, Leo Burnett's inclusion in the team is said to be partly driven by the fact that Burnett's U.S. chief creative officer Susan Credle had some 15 years of creative telecom experience through her 24-year tenure at BBDO 's New York office.
In a memo to Leo Burnett employees, Rich Stoddart, president-Leo Burnett USA, announced the Sprint win, saying, "Two years ago, we set out to fill our void in two very important categories -- financial services and telecom. Following the big wins of Invesco and Fifth Third, this is an especially exciting and important win."
He ended the email by saying the agency would celebrate the win "at Soldier Field on Friday morning for a real Sprint halftime report," referring to the agency's annual holiday fete, which despite being held during the day, is typically a boozy affair. Thanks to Sprint, the Burnett Breakfast (dubbed so because it was a tradition put in place by the founder) probably had a few more bottles of champagne popping this year than in years past.
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Contributing: Maureen Morrison, Alexandra Bruell