Four agencies will participate in the review of Compaq Computer Corp.'s $300 million account, with credentials meetings set to begin this week. But Y&R Advertising, New York, which industry observers had regarded as a leading contender, has dropped out of the running.
Executives close to Compaq said the review, managed by Jones-Lundin Associates, New York, will involve incumbent DDB Worldwide, Grey Advertising and FCB Worldwide, all New York; and Leo Burnett Co., Chicago.
Y&R exited because it didn't want to jeopardize its relationship with client Sony Electronics, said an insider. Sony has had a history of being cautious in allowing its agencies to work with computer companies. DDB Worldwide worked with Sony in Europe for several years, but lost that business less than six months after it landed the global Compaq account.
"Y&R was invited to participate and reluctantly dropped out because of the significant risk factor," one industry insider said.
"Y&R has never put us in a position where we had to contemplate or consider a potential conflict," said T. Scott Edwards, senior-VP, marketing communications group, Sony Electronics.
J. Walter Thompson USA, New York, which also was viewed as a potential contender, is not involved in the review.
Burnett's new sibling shop under the BDM banner, D'Arcy Masius Benton & Bowles, was invited to pitch. However, because Compaq requested that only one agency per holding company participate, D'Arcy selected Burnett, which already works with Compaq in China, to represent BDM.
According to insiders, Grey's chances of landing the account are decent, given the agency's current client Oracle Corp. already partners with Compaq on a number of fronts.
Regarding DDB's chances of retaining the account, an executive close to the process said: "They have a chance because they know how dysfunctional things are inside [Compaq]. While you can rely on consultants to manage the process, you still need someone inside getting everyone on the same page."
DDB is revamping its Compaq team to pitch the account. Prior to the review, the account was headed on the creative side by Co-Chief Creative Officer David Nathanson. On the account side, Global Account Director Steve Norcia was key in nabbing the account, but has become less involved with the business. Group Account Director Matt Lake took over the bulk of Mr. Norcia's duties.
It is unclear whether Mr. Nathanson or Mr. Lake will remain involved with the client, but DDB is said to have tapped new key players, which it declined to name. One executive said that Compaq's difficulty nailing an appropriate brand strategy "isn't an advertising problem, it's a corporate problem."
The beleaguered computer giant disclosed news of the review earlier this month, indicating it plans to rethink advertising and brand strategy in a bid to position itself as a nimble Internet company.
And despite on-again, off-again attempts, Compaq remains without a chief marketing officer to devise and implement brand strategy across autonomous divisions.
Insiders say Compaq isn't looking at radically different strategies. With a handful of agency leaders, "It will be hard to differentiate on the basis of capabilities. . . . They all do world-class global advertising," one person close to the process said.
Ken Caffrey, who is managing the review process for Jones-Lundin, declined to comment on the contenders or the time frame of the review, as did former Ogilvy & Mather Chairman Ken Roman, who is a Compaq board member. The agencies and Compaq also declined comment.
Copyright February 2000, Crain Communications Inc.