INTEGRATED: INTEGRATED ISSUES; IBM furthers one-agency strategy with promotions bonus

Gordon MacMillan probes the enormous promotions task facing WPP agencies

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

instance.



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

fans.



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

image campaigns



O&M Direct



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

and Africa



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