Lord Geller Out; 2 Ad Agencies to Get IBM Account
Several years ago, IBM said so long Charlie to those popular Charlie Chaplin ads, and on Thursday, the computer giant said so long as well to the troubled ad firm that created them.
For months, the advertising world has watched how International Business Machines would handle a bitter dispute that led to the breakup of the New York ad firm that handled most of its advertising in the 1980s.
On Thursday, IBM turned its back on the controversy and said it would give its lucrative $150-million account to two others firms untouched by the dispute.
The dispute began when top officials of the ad firm left, started a rival firm and sought to woo away clients. “IBM was put in a very awkward position,” said Emma W. Hill, an analyst with the New York investment firm Wertheim & Co. “So, they said, ‘damn you both,’ and went to two new ad agencies.”
The big winners are the firm of Wells, Rich, Greene, which will create IBM’s corporate advertising campaign, and the firm of Lintas: U.S.A., which will create ads for IBM’s desk-top computers. Industry analysts say Wells, Rich, Greene will likely handle slightly more of the IBM business than Lintas.
The biggest loser is the ad agency Lord, Geller, Federico, Einstein, which has been IBM’s primary agency for nearly nine years. Not only did it create those Charlie Chaplin character ads, but also the ad campaign featuring most of the cast of “M*A*S*H,” including Alan Alda.
Lord Geller is a division of British advertising and marketing conglomerate WPP Group PLC, which also owns the J. Walter Thompson ad firm. Industry speculation swirled late Thursday that IBM’s action could force WPP to merge battered Lord Geller into J. Walter Thompson, or else acquire yet another ad firm with which to merge Lord Geller.
“It’s too early to tell what will happen,” said a WPP spokesman late Thursday. But Joan Rosner, a spokeswoman for Lord Geller, said the move “will have a profound effect on the agency,” which employs 270 people and posts annual billings of $180 million. Substantial layoffs at Lord Geller are expected to soon be announced.
Also landing in the loss column is the ad firm Lord, Einstein O’Neill & Partners, the firm created when many top executives left Lord Geller in a huff after a series of disputes with WPP Chairman Martin Sorrell. The new ad firm tried--but has now failed--to take the IBM business with it.
And for IBM, this is finally a chance to remove itself from the inner bickerings of two ad agencies that industry analysts say have recently spent more time suing one another than servicing their clients. What’s more, analysts say, IBM has learned a tough lesson this time by selecting two ad agencies to share duties. If IBM has trouble with one agency, it can always turn to the other.
“In addition to superior creative concepts,” said James C. Riley, general manager of marketing plans at IBM, “both (agencies) demonstrated outstanding marketing expertise.” But executives from the Armonk, N.Y., computer giant refused to comment specifically on why it opted to hand its multimillion-dollar advertising assignments to two new firms.
While executives from IBM and its new agencies would not specifically discuss the company’s new ad strategy, “we want to project the image of being a solution-oriented company,” said Theo Chisholm, an IBM advertising spokeswoman.
In the process, IBM will likely dump its current ad slogan “The bigger picture,” said Kenneth Olshan, chairman of Wells, Rich Green Worldwide. Olshan, whose agency created the provocative print ads for Benson & Hedges cigarettes that feature a man dressed only in pajama bottoms while chatting with a roomful of otherwise well-dressed guests, said that new IBM corporate advertising could begin appearing within two months.
And while conceding that the former Charlie Chaplin campaign was popular, it will not be a part of future IBM advertising, said Olshan. “That campaign is history,” said Olshan. “It was a cute way to let everyone in America know there was a personal computer available to everyone. But we feel that IBM is a great company that has hidden its greatness under a barrel. We’re not going to be shy about expressing that greatness in advertising.”
The other agency that will be sharing IBM’s ad duties was slightly less outspoken on Thursday. “We did a thorough analysis of the question: Who is IBM? And I guess they liked our answer,” said Spencer Plavoukos, chairman of Lintas: New York. Plavoukos, whose agency creates ads for Diet Coke, said that his firm would immediately begin working on new IBM advertising.
“It is a rare occasion,” said Plavoukos, “for IBM to make a move like this.”