Congress Blasts Huawei; Search for Global Agency Narrows
The U.S. government considers Chinese telecom giant Huawei a threat to national security as ad holding companies fight for the rare chance to create a new global brand from a $32 billion business that is little known outside China except when it's reviled as a security risk.
WPP and Omnicom Group are the final contenders as Huawei pares down its list of potential partners to handle its global corporate branding work.
The assignment takes on new urgency following a U.S. congressional report this week branding Huawei a potential threat to national security. The company is said to have worryingly close ties to the Chinese military and could use its projects to spy on Americans and disrupt or disable key infrastructure, the report said.
The bipartisan House Intelligence Committee recommended that the U.S. government be barred from doing business with Huawei, while American companies should avoid buying its equipment.
That would be a serious blow to Huawei as the company tries to shift to the consumer marketplace with products such as phones and tablets, after building its empire as a global B-to-B supplier of switches, boxes and towers.
This summer, Huawei kicked off a search for an ad holding company to help with its global corporate branding work as it seeks to grow outside its home market. WPP, Omnicom, Dentsu and Interpublic Group of Cos. pitched for the account, drawing teams from a combination of agencies.
Although Huawei is the world's second-largest telecom company -- operating in 150 countries -- it still has a formidable image problem as underscored by the stinging report from Congress.
"(Seeking a partner for its global corporate branding) is clearly an attempt to take the bull by the horns and cover the major bases in terms of communications and turn things around," a China-based holding company executive said.
With WPP and Omnicom still in the running, according to holding company and agency sources with knowledge of the situation, the company is expected to pick a winner before the end of the year.
Huawei spokesman Roland Sladek said the company, based in the southern city of Shenzhen, had no comment as the decision process is still underway.
It's not known how much the account will be worth or the exact scope of the work. But sources said agencies involved in the pitch include Fleishman-Hillard, OMD and Interbrand for Omnicom; and Ogilvy, Maxus and Burson-Marsteller for WPP.