NEWS: Sega rejigs Euro business after cuts

Sega, the problem-plagued computer games manufacturer, is shaking up its advertising arrangements in Europe having slashed its spend through McCann-Erickson to a fraction of its former size.

Sega, the problem-plagued computer games manufacturer, is shaking up its

advertising arrangements in Europe having slashed its spend through

McCann-Erickson to a fraction of its former size.



The Japan-based company is to allow local European managers to appoint

their own agencies in the wake of swingeing cuts to its European budget

from pounds 20 million to pounds 4 million during the past year.



Industry sources believe the move may be a prelude to Sega making

distribution deals across Europe and concentrating on trade ads created

in-house, with McCanns’ work on the account being reduced to minimal

consumer advertising. However, Universal McCann, the media arm of

McCanns, will continue to handle all media planning and buying.



McCanns won the business in February last year after a three-month

pitching process against Lowe Howard-Spink, Collett Dickenson Pearce,

Abbott Mead Vickers BBDO and DMB&B.



The appointment led to a fast-moving and menacing TV commercial for

Saturn, a new games system to rival Sony’s PlayStation, which featured a

spectacular car crash and the line: ‘Reality always hurts.’



But the advertising masked serious problems for Sega in a declining

video-games market. It has been hit by the growing sophistication of PCs

and the growing risks faced by manufacturers forced to invest millions

of pounds in the development of new games without knowing if they will

be a hit with consumers.



It is understood that local managers, fearful that time was running out

for them to put matters right, demanded that they should be allowed

to take charge of their own destinies.



David Warden, McCanns’ chairman, said: ‘We’ve done terrific work for

Sega. The company has a tough job to do and we wish it all the best.’



Sega has already changed its European management front line by ousting

Barry Jafrato, the marketing and product director, Noel Dardis, the UK

marketing director, and Alan Sharam, the UK managing director. Andrew

Mee, a former European product manager, has been promoted to head of

marketing for the UK and Europe.