IBM adopts new agency model

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In a move that could spark a trend, IBM Corp. has adopted a new agency model, opting for just two ad agencies for the direct marketing and interactive components of its global integrated marketing campaigns.

Under the new model, which will go into effect early next year, IBM will work with OgilvyOne Worldwide and Wunderman—both subsidiaries of London-based WPP Group plcon all aspects of direct and interactive marketing communications, ranging from online banner ads to direct mail campaigns to broadcast spots.

OgilvyOne will handle marketing and communications targeting potential customers for IBMs products and services while Wunderman will drive the marketing message to businesses that need an upgrade of their existing services or equipment, according to Rob Stagno, VP-worldwide director of marketing for IBM. "The current business environment demands our [marketing] be far more integrated," he said.

Sources said other large companies could follow IBMs lead in seeking greater integration. In 1998, after IBM consolidated its direct marketing program with three agencies from dozenslater adding four interactive agencies to deploy Web marketingmany other large companies made similar moves.

Wunderman Chairman-CEO Daniel Morel said large clients recognize their marketing and communications can be more effective if every marketing channel is under the same roof. "Stand-alone disciplines dont work anymore," he said. "With more fragmentation in the media, all the channels have to be integrated. Thats where you get the biggest bang for your buck."

Carla Hendra, president of OgilvyOne North America, who has worked on the IBM account since 1996, said: "By going with two agencies [IBM] can move quickly and more effectively to market. Thats not something you can do with 17 agencies. The decision completely aligns with marketplace realities.

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