Dell’s appointment of WPP Group to handle its mammoth £2.2bn advertising business has divided industry opinion. Some believe it will benefit agency and client, while others think that, like Dell’s fortunes of late, the relationship could be fraught with problems.
WPP won the account last week after a final contest against Interpublic Group and will create a new agency to service the business that will be headed by Young & Rubicam North America chief marketing officer Mitch Caplan (MW last week)
The new agency, which will be operating by March 2008, is tasked with raising Dell’s brand profile so it can compete with the likes of Apple and Hewlett Packard. It will handle all marketing activity for Dell including advertising, media planning, customer relationship management and PR.
Dell, which previously worked with more than 800 agencies, believes a simpler marketing process is required and that the change in strategy will help it reclaim its position as the world’s biggest PC manufacturer.
Dell vice-president of marketing Casey Jones says: “We looked at how Dell approached marketing and communications and how many agencies we used. It took a while to eventually come to the answer, which was more than 800. This had to be inefficient. Many agencies were doing the same job and showing different results. To make sense of chaos, we needed one unique solution from a single entity.” While observers believe the consolidation of advertising duties makes sense from Dell’s perspective, particularly as it will cut costs and allow it to work with just one profit and loss account for all marketing and communications services, some believe the resultant creative work could suffer.
Mike Welsh, managing director at Claydon Heeley – part of the Zulu network which pitched for Dell’s below-the-line business last year – thinks the work developed globally by WPP will be in danger of not being sufficiently “nuanced” for local markets.
Dell says WPP “has the right” to choose whether it wants to work with agencies previously on its roster such as Carat and Mother, which has just created a global campaign for the company’s XPS One and XPS M1530 PCs.
One of WPP’s first challenges will be to support the computer maker’s push into retail stores. The move marks a significant shift in strategy away from the company’s famous direct selling business model. Brands such as Apple and Sony have already exploited this market and observers believe Dell will be able to learn from their experiences.
One industry source argues that Dell views marketing as just another commodity: “If I were WPP I would be worried about being relegated to nothing more than part of the manufacturing process.” Others believe Dell should focus on making its brand more “inspirational”. Tim Hill, marketing and new business director at Futurebrand, says: “Dell needs to do a full audit of its brand. It needs to build some aesthetic into the brand as the market has changed and it is more about aesthetic than functionality.”
The industry will be watching to see how significant an overhaul Dell is planning to give its brand following the appointment of WPP. By way of a clue, Jones says the company’s founder Michael Dell is unimpressed by the “small or insignificant”.