AT&T to expand relationship with FCB

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AT&T Corp. is poised to expand its relationship with FCB Worldwide, New York, awarding the agency ad duties for its estimated $50 million to $100 million Business Services Division. The FCB win follows a two-month review involving Y&R Advertising, New York and Schifino Lee, Tampa, Fla., both of which already work on the telecom giant's account. An official announcement from AT&T on the account win could come as early as this week, according to people familiar with the situation. AT&T and the agencies declined to comment or confirm the decision: "We have nothing to announce at this time," said Jim Byrnes, a Business Services spokesman.

The account win comes on the heels of an Olympic ad showdown between Y&R and FCB in which AT&T asked both agencies to submit ideas for a new corporate image effort that broke during the Games. Y&R is responsible for AT&T's consumer long distance and corporate brand efforts; while FCB oversees its wireless, collect and college and youth advertising. The agencies ended up sharing duties on the coveted account, with Y&R handling TV executions and FCB coordinating the print effort. FCB's Business Services win essentially enables it to retain the business; Y&R had vied to win an additional piece of the account.

FCB won the business, in part, based on the strength of its proprietary research models and a return-on-investment-based program, according to people familiar with the matter. While Y&R emphasized a more creative approach but put less importance on the ROI aspect.

However, FCB won't be alone on the account. Schifino Lee, which next month concludes the $15 million print and direct mail "Take Me" campaign for Business Services, has been tapped for an additional $10 million ingredient-branding campaign. Schifino and FCB will work closely with Y&R's still evolving corporate image work based on AT&T's broadband communications future. AT&T's business goals remain a moving target, its stock price has plummeted in recent weeks to $24 5/8 at the market's close on October 13. AT&T seeks to spin off its consumer long distance business and is in talks to merge other parts of its business, all of which make for a confusing time for the agencies.

People close to AT&T say the forthcoming Business Services work, which may not break until early 2001, will be primarily print-based and will tout the Division's ability to partner closely with customers on Internet and data services solutions. But as AT&T evaluates its entire ad and marketing budget, spending on the effort may not even reach $50 million, the low end of the estimated range. Spending in the fourth quarter alone, is said to be minimal with few media buys except for AT&T's continuous sponsorship of ABC's "Who Wants to be a Millionaire?," according to a person intimately familiar with AT&T's plans.

Copyright October 2000, Crain Communications Inc.

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