In conjunction with UK-based WPP Group, Dell will create a new marketing agency that will consolidate advertising and marketing activity worth $4.5 billion during the next three years. The shift to a consolidated marketing approach is a departure for Dell, which has spread its advertising and marketing budgets among 800 agencies and contractors worldwide.
Accordingly, the account win for WPP is a setback for an array of other advertising and marketing firms, most notably Interpublic Group and Omnicom. As reported by the Wall Street Journal, Interpublic was the primary competition against WPP for the Dell account, with the ultimate decision handed down after an intensive seven-month review. Dell stipulated that the winning firm devise an approach to foster collaboration between the people who create ads for TV and print and marketing researchers, product marketers, and web-advertising groups. Apparently WPP did the better job responding to that challenge.
Quoting from the Wall Street Journal:
The three-year contract, which includes all of Dell’s advertising, direct marketing, public relations, media planning and other duties, will generate between $100 million and $150 million in annual revenue for WPP, according to executives familiar with the matter.
That’s quite an enchilada. Now two questions will be asked. Will this model work for Dell? If it does, will it be adopted widely by other major technology vendors, including some of Dell’s competitors?
Of course, advertising and marketing communications, even if brilliantly devised and superbly executed, will not compensate for inferior products, lackluster service, and mismatched sales channels. Dell needs to keep its eye firmly fixed on all aspects of its business if it is to stave off Acer and Lenovo and close ground on PC market leader Hewlett-Packard.