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Dell in $4.5bn advertising pact with WPP
|03 декабря 2007|
Dell plans to consolidate its worldwide marketing, advertising and communications operations into a single new public relations unit led by WPP, the UK advertising group.The advertising pact, worth $4.5bn in billings over the next three years, will come as a significant fillip for WPP as Sir Martin Sorrell, its chief executive, has been trying to persuade investors that they are undervaluing the company’s share price. WPP’s stock price has fallen 18 per cent in the past six months, underperforming the London market.
In an analyst’s note in September, John Janedis of Wachovia Capital Markets said the Dell account could be worth as much as $90m to $100m of annual revenues to the winner, Bloomberg reported.
Mark Jarvis, Dell’s chief marketing officer, said WPP would set up a separate company to deal exclusively with the computer maker.
Dell, the world’s second-biggest personal computer maker, said the new arrangement would simplify a sprawling PR operation spread across as many as 800 separate companies.
In a post on a company blog, Mr Jarvis said: “By combining our agencies, we can invest in the long-term, in the people and tools to unlock far greater results than a patchwork quilt.
“We believe this is the first time a global client and agency have come together to redefine the ‘agency’ on such a scale.”
The push to consolidate Dell’s marketing, communications and advertising activities comes as the PC maker is trying to raise the profile of its brand amid fierce competition from Hewlett-Packard, its biggest rival.
HP has continued to take PC market share from Dell in recent quarters, in spite of an aggressive turnround effort launched this year by Michael Dell, chairman and chief executive.
Casey Jones, Dell’s vice-president of global marketing, said a top priority of the new WPP group would be to support the computer maker’s push into retail stores.
Dell this year ended more than two decades of near-exclusive reliance on direct sales of computers over the telephone and Internet by striking sales deals with several retailers, including Wal-Mart.
Mr Jones said: “After seven months of struggling with a patchwork quilt of 800 different shops, we’ve got a large partner helping us build the resources necessary to the retail channel”.
The Dell deal may bolster WPP’s argument that its full-service approach can counter Google’s growing weight in online advertising and the search engine’s incursions into print and broadcast advertising.
Speaking at a conference in Barcelona last month, Sir Martin said the Internet search group had ambitions to develop client relationships similar to those of big advertisers such as WPP.
“That’s where the next battleground will be,” Sir Martin said, adding that Google was a “short-term friend and a long-term enemy”.
Источник: Financial Times
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