Gordon MacMillan probes the enormous promotions task facing WPP agencies
Having already gone globally integrated with its advertising and direct
marketing - with Ogilvy and Mather Worldwide - the computer giant, IBM,
has rewarded WPP again and handed it its global promotions business.
The WPP agency, Einson Freeman Promotional Campaigns, will be
responsible for IBM’s hefty multi-million dollar personal computer and
consumer business. The move completes IBM’s single-agency integrated
marketing strategy, which was dramatically begun two years ago with the
appointment of O&M Worldwide to its dollars 300 million advertising and
direct marketing business. The decision was billed at the time by
Campaign as the biggest win in advertising history.
At the same time, the promotions win places WPP at the top of the global
integration ladder, with a model that, if successful, could be repeated
across a number of other clients. To win the business it brought
together two of its promotional agencies, Einson Freeman and Promotional
Campaigns, which worked together on the pitch to create a third company,
EFPC, now operationally fit, WPP says, to handle global promotions.
The new company pulls up a chair at IBM’s integrated marketing core team
table, alongside its sister shops, O&M and O&M Direct, with a brief to
create an integrated unit that will strengthen IBM’s brand identity.
Winning the promotions business rates on the same scale as that of the
advertising and direct marketing wins. It really does. To date, no other
company employs a global promotions strategy. IBM, although it may not
score many firsts these days, has every right to claim one in this
United Airlines retains Leo Burnetts on a worldwide basis, but Burnetts
is not United’s sole agency. It employs a raft of other agencies for
tasks across the world, including the UK sales promotion agency, Cramm
Francis Woolf. IBM, like Coca-Cola, is everywhere.
It was a bold move for IBM. No doubt about that. However, IBM is not
being triumphalist about the switch. Ron Runyan, worldwide promotions
manager for the personal systems group at IBM, the man who was in the
thick of the pitch, is even prepared to admit feeling cautious.
‘We are excited by the whole move but we are also cautious. It’s a big
step. But we must be clear why we appointed EFPC. We appointed it for
its capability and because we believe it is consistent with our other
marketing strategies,’ he says.
‘If we have different and disparate agencies then we would have a lot
more trouble in getting things up to speed.’
IBM, however, cannot be accused of rushing into global integration. Two
years have passed since its appointment of O&M Worldwide. One gets the
feeling that it was a decision that was mulled, a decision that was also
heavily dependent on the work produced by O&M, which has gained a lot of
While the decision might come as a surprise to some, others are clearly
wondering why it took so long. At the time of the appointment of O&M it
was being reported that IBM was opting for a single strategy that would
encompass all the company’s activities. Clearly, it was not. It was
waiting to see what it would get for its money.
Sales promotion may well be regarded by some as the ‘shelf-wobbler
brigade’. IBM clearly sees it as something more. Runyan says IBM wants
brand consistency: ‘We think there will be a lot more efficiency in
taking a brand position in creative work and transplanting it to point
of sale and promotions.’ For IBM and Steve Barton, board director at O&M
Direct, who oversees all of IBM’s advertising and direct marketing in
the UK, the appointment of EFPC offers the chance to ensure work that
O&M creates does not fall down at the promotional level.
Everybody knows, Barton says, that O&M does a great job with advertising
and direct marketing. The problem arose, he says, when the existing
promotions let the brand down.
For this reason, it is no surprise that Einson Freeman was chosen. It is
certainly no shelf-wobbler shop. The Einson Freeman president and chief
executive, Jeff McElnea, has banged the drum for promotions as builders
- not damagers - of brands for years.
In 1993, Einson Freeman won the entire dollars 10 million through-the-
line account for Alfa Romeo in the US.
A new agency, Conquest, was formed for the task, and it was billed as a
milestone for promotional agencies. It also works for clients including
AT&T, CBS and Sears.
McElnea has been a leader in the camp that has argued that promotions
agencies’ approach to brand building is equal to that of advertising
agencies. No doubt a persuasive argument to the ears of IBM.
It is not only IBM executives who are feeling somewhat cautious. It
spreads throughout the camp. Jane Horowitz, former director of strategic
consumer programming at Quaker Oats in the US, was brought in to work on
the IBM pitch. She takes up a role as vice-president and IBM account
director at EFPC.
‘We are being cautious, because there has never been anything like this
before, but I don’t think it will be a logistical nightmare,’ she says.
IBM and WPP are obviously both right to be cautious about their new
venture as the consistency they seek globally is going to be hard work
delivering. It harks back to earlier IBM advertising which told us all
that ‘you don’t need an army to run the system’. Or maybe you do.
The IBM agency line-up
Ogilvy and Mather Worldwide
Represented in the UK by Ogilvy and Mather Advertising. Handles brand
Works closely with its sister shop and leads the UK business. Handles
all of the direct marketing and much of the press work
Einson Freeman Promotional Campaigns
A new agency created from two WPP promotions networks, Einson Freeman
and Promotional Campaigns. Will generate all creative promotional work
at its US headquarters, then draw on key local agencies. Promotional
Campaigns in the UK will oversee all of IBM in Europe, the Middle East