Cites Closure of Fallon NY Office as Reason for Shift

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SAN FRANCISCO ( -- Virgin Mobile has consolidated its estimated $20 million advertising account at Mother, New York.
Virgin Mobile will continue to work with Publicis Groupe’s Starlink as its media-buying agency but is reviewing its media-planning account, currently handled at Fallon.

Office closure
Howard Handler, chief marketing officer, said Virgin Mobile made the change in large part due to the closing of Fallon Worldwide's New York office, its agency since April 2003. While he said Fallon had “done a phenomenal job over the last three years” on its account, “the closing of the New York office plays into this in a pretty substantial way.”

Mother had been handling projects for Virgin Mobile, including a viral campaign directed at parents. A “kit” included tools such as a PowerPoint presentation to help youngsters persuade parents to spring for a Virgin Mobile phone.

Mr. Handler said Virgin Mobile will continue to work with Publicis Groupe’s Starlink as its media buying agency but is reviewing its media planning, currently at Fallon, which is also part of Publicis.

Fallon comment
Rosemary Abendroth, a Fallon spokeswoman, said Fallon and Virgin Mobile had agreed that they would part at the end of 2005 primarily because Virgin Mobile wanted a New York agency. “We did not expect to have them in 2006,” she said.

Virgin Mobile, once dominant in the youth and pre-paid wireless service markets, has been facing significant competition in recent months with the entry of mainline carriers such as Cingular into the pre-paid arena. This year, new, smaller carriers also are attacking Virgin Mobile’s core market, among them Amp’d Mobile and a number of Hispanic mobile virtual network operators, companies that use other wireless service carriers to provide phone connections. Virgin Mobile itself is an MVNO and has a partnership with Sprint.

Virgin and MTV
Virgin Mobile had an exclusive deal with MTV that expired late last year. MTV, which has adopted a new mobile content distribution strategy, has signed up with Amp’d Mobile. Mr. Handler said details of Virgin Mobile’s new arrangement with MTV will be made available next week.

Other accounts that left or that Falon resigned within the last year included Dyson, Sony Electronics’ U.S. work and VF Corp.’s Lee Jeans.

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