IBM Consolidates Direct, Interactive With OgilvyOne, WundermanIBM Corp. said yesterday that it has consolidated its direct and online marketing account with WPP Group PLC's OgilvyOne Worldwide and Wunderman.
The move leaves out BrannWorldwide, which was one of a triumvirate of direct shops handling IBM business since 1998. It also consolidates from seven to two the number of agencies with direct and interactive responsibilities.
"The thinking is the recognition by IBM that you can't have conflicting or different messages coming from a variety of suppliers," Daniel Morel, chairman/CEO of Wunderman, New York, said from Provence, France, where he is vacationing. "In the 21st century, they have to have one agency managing all channels of communication going to their business target."
Besides Brann, interactive agencies also are affected in the realignment, which is part of IBM's decision to treat online as an integral component of direct marketing. R/GA, Modem Media, OgilvyInteractive and AnswerThink will only work with the ibm.com team for online strategy and site design. Ibm.com offers sales, service and support for customers.
"Not an issue of broken model we need to fix," said Laura Keeton, director of corporate media relations at IBM, Armonk, NY. "The move was driven by strategy. Interactive is an integral part of direct marketing, so we've aligned our agency model to execute our campaigns strategically and effectively."
Interactive accounts for 7 percent of IBM's $600 million annual media buy. IBM does not disclose the direct marketing component.
IBM's previous agency realignment was in 1998, when it pared its roster of 30-odd direct marketing agencies down to three. The consolidation, however, is a sign of the growing power of agency conglomerates.
British-owned WPP, Chicago's Bcom3 Group, and New York's Interpublic Group of Companies Inc. and Omnicom Group Inc. now actively pitch for business and divvy up the accounts among their constituent shops.
OgilvyOne and Wunderman have outposts in most markets served by IBM worldwide. Another key reason for their choice as direct agencies of record was their history in direct mail, interactive media and traditional account management.
While IBM's agency downsizing may result in layoffs for losing shops, survivors like Wunderman are girding up for more work.
"Of course, we'll be staffing accordingly to make sure that we can service that account in New York, Europe, Middle East and Africa," Morel said.