Dropped Call: How and Why AT&T Killed a $6.7 Billion Brand

Telco Hopes Ditching Cingular will Help Cross-Selling. But at What Price?

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SAN FRANCISCO (AdAge.com) -- AT&T has embarked on what may go down as the biggest brand killing of all time-eliminating Cingular.

There is little precedent for deliberately axing a brand that, according to experts Millward Brown, has a value of $6.7 billion. And although well-established corporate brands have been killed before-think Consolidated Foods becoming Sara Lee, Morgan Stanley ditching Dean Witter or Nissan dropping Datsun for its corporate name-few were vibrant, young and growing when they were eliminated. Even HP, in switching over the Compaq name to value-priced computers, was dealing with a brand many saw as declining.

So how did AT&T make the decision to erase the youthful, energetic Cingular brand? Well, as Jason Cieslak, managing director of branding shop Siegal & Gale, put it: "Ultimately it's an art instead of a science; a lot of factors come into play." No one at AT&T is giving up details of the factors that played biggest in internal discussions, but the key for the company seems to be the promise of cross-selling wireless service with other cable offerings, which will be "easier to do under a single brand," said Russ Meyer, chief strategy officer at Landor, also a branding agency.

Branding experts have argued that AT&T is your father's telecom company-in fact, some are considerably less complimentary-and that Cingular is more contemporary, fun and trusted. But telecom experts tend to applaud the move. "Short term, it will take a while to change customer thinking," said independent analyst Jeff Kagan. "Long term, it's a good idea to have a master brand strategy. It would be nuts not to have wireless under the AT&T brand."

Even assuming telecom experts such as Mr. Kagan are right, it's an expensive process, including switching over everything from ads to retail-store signs to packaging. It may be made even more costly-and potentially confusing for consumers-because AT&T is not planning to make the leap to AT&T from Cingular in one fell swoop (unlike Cingular, which acquired the old AT&T Wireless and rebranded hundreds of stores to the Cingular name literally overnight).

AT&T, which has only just eliminated the SBC brand, will phase out Cingular over several months. The process began with a rather uninspired tagline that ran during the 2007 AT&T Cotton Bowl Classic just a few days after the deal cleared final regulatory approval: "Cingular is now part of AT&T."

Eventually, the AT&T name will become more prominent, and the Cingular name will disappear. "The change will take place over time in ways that make sense for a gradual transition," an AT&T spokeswoman said. She declined to say how much it would spend on rebranding. But AT&T said it had spent more than $1 billion to rebrand SBC into AT&T just one year ago. It took more than $4 billion over six years to create Cingular.

Cingular's "raising the bar" imagery might survive. The concept originated with an Ogilvy & Mather campaign in its final days as agency for AT&T Wireless. When Cingular bought AT&T Wireless, its agency, BBDO, retained the line.
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