Dell plans £200m review

Media agencies line up as troubled computer giant rethinks global agency roster.

Dell Computers is gearing up to review its £200 million global media planning and buying business.

Carat currently handles the £28 million UK account and the consolidated European business, while OMD handles the US business. The Asian market is handled by Havas in all markets except Japan.

A date for the review has not yet been set, but Dell has contacted networks.

The news comes almost three months after Dell surprised the advertising industry by moving an estimated £75 million portion of its creative business from DDB London to the little-known Danish ad agency AdPeople.

The Copenhagen-based advertising agency picked up the creative account in June following an internal audit.

Carat has held the Dell media account for 17 years, having worked on the UK and small-business account since 1989. Dell most recently reviewed the account in 1999, but did not invite other agencies to repitch at the time.

Carat retained the account and also picked up the computer giant's centralised European business.

Dell, which is the world's largest maker of personal computers, is currently enduring one of the most challenging periods in its history.

It recently reported weak second-quarter earnings and issued the largest product recall in US history.

Net income for the second quarter of this year was $502 million, compared with $1.02 billion for the same period last year. Profits fell as the company came under increased pressure from its rival HP.

The fall in income was despite a 5 per cent rise in revenue to $14.09 billion during the second quarter, against the same period last year.

The recall came hot on the heels of the disappointing second-quarter earnings. Dell recalled more than 4 million computers after battery cells, manufactured by Sony Corp, caused several of its laptops to burst into flames.

Dell and Carat declined to comment.