Verizon Wireless puts $315 mil in play

By Published on .

Facing industry consolidation and an integrating marketplace, Verizon Wireless has decided it needs fresh marketing ideas-and has put its national ad account up for review.

The nation's leading wireless spends $828 million in advertising, although it is estimated that roughly half is spent on national media.

"We are not completely satisfied with what we have received from IPG," said spokeswoman Brenda Raney.

The review comes amid a major shakeout among the six players in the wireless industry. There's talk that No. 2 player Cingular, with 23.4 million subscribers to Verizon Wireless' 36 million, will combine with No. 3 AT&T Wireless, with 21.9 million subscribers, as measured by Yankee Group data. Such a combination would give Cingular a 30.5% market share, as compared to Verizon Wireless' 24.3%.

At the same time, telecommunication companies face a converging marketplace where bundled packages, offering consumers not just wireless services but landline, broadband and other integrated connections, are likely to offer the biggest competitive advantage, said Jeff Kagan, an Atlanta-based independent telecommunications based analyst.

"All [the various telecommunications sectors] are blurring into one big communications network that requires thinking on a new level we haven't seen before" in order to capture customer loyalty and market share, he said.

Incumbent Interpublic Group of Cos.' Lowe, New York, will not participate in the review. Ms. Raney said sibling McCann-Erickson, New York, will represent the holding company and is likely to have a finalist slot in the review along with shops from other holding companies. Since late last year, Verizon conducted a creative shootout for an assignment between Lowe and other Interpublic shops, including McCann. McCann has won the assignment for a new service, according to executives familiar with the situation, although Ms. Raney declined to confirm that.

Ms. Raney said the review does not affect media duties at Publicis Groupe's Zenith Media, and a number of smaller regional accounts at Interpublic agencies and other shops are not involved in the review. Ms. Raney said she was unaware of how media-planning duties, now at Lowe, will be handled going forward.

happy with test man

While Verizon's Test Man played a significant marketing role in transforming Verizon Wireless into the leader in terms of quality and reliability, his telecom network checks may not be as relevant in the changing landscape. Mr. Kagan noted because Verizon is "moving into the integrated world they may need a fresh outlook. The marketplace will be much different in the next few years than it was in the last few years."

Verizon's Ms. Raney said, however, Verizon Wireless is "very happy with the Test Man and at this point, this does not impact Test Man." Test Man was the brainchild of New York shop Bozell which Interpublic merged into sibling Lowe in February 2003.

Verizon Wireless spent $828 million in measured media in 2002, according to TNS Media Intelligence/CMR. For the first 10 months of 2003, spending was $751 million, up from $678 million in the first 10 months of 2002. National advertising accounts for about $315 million in billings, with the remainder at a number of shops handling regional advertising, Interpublic's Hill Holliday, New York, and Campbell Mithun, Minneapolis, among them. Verizon's Ms. Raney said these accounts were not affected by the review.

Verizon Wireless is 55% owned by Verizon Communications and 45% owned by the U.K.'s Vodafone Group. Verizon Communications, handled by independent McGarry Bowen, New York, at this time maintains its independence from the wireless company which shares its name.

Most Popular
In this article: