Dell to form agency with WPP to handle all marketing; will invest $4.5 billion over three years

ROUND ROCK, TX: Dell has selected WPP Group to co-create a stand-alone agency that will provide all marketing communications solutions for the computer hardware and systems manufacturer. Dell will invest $4.5 billion in billings in the agency over the next three years.

ROUND ROCK, TX: Dell has selected WPP Group to co-create a stand-alone agency that will provide all marketing communications solutions for the computer hardware and systems manufacturer. Dell will invest $4.5 billion in billings in the agency over the next three years.

The controversial move, which is unprecedented in scope, will bring Dell's entire external marketing communications function under one profit and loss statement. WPP and Dell will create one agency, comprising all marketing disciplines and staffed with professionals, at least initially, devoted full time to Dell. The agency and Dell will also co-invest in a significant analytics tool that will map the efficacy of all marketing disciplines against each other and provide measurement for marketing initiatives against business goals.

Publicis, Havas, Omnicom, and Interpublic Group all vied for the account, with Interpublic joining WPP as finalist.

Andy Lark, VP of communications for Dell, told PRWeek last week that the agency is expected to staff thousands of people. The agency, code named "Da Vinci," is expected to be up and running by March 1, 2008.

When Dell announced the search, the news was met with some grumbling, particularly in the advertising industry. Dell's decision to hold a voluntary idea summit, where it, some felt unfairly, solicited free advice from agencies, first drew criticism. When the agency search was announced, some perceived the move as a case of muscle flexing.

But in multiple interviews, Dell marketing communications executives told PRWeek that they felt this integrated agency was exactly what many corporations secretly wanted. They also felt it would ultimately be praised and emulated elsewhere.

At the time of the selection, Dell had over 860 marketing communications agencies globally. In an interview at Round Rock on November 3, Casey Jones, Dell VP of marketing, characterized Dell's radical plan as a sane decision in an irrational world.

“All of [our 860-plus agencies] were hired to provide point solutions to problems that Dell was facing from a marketing standpoint. However, all of the data from [those agencies'] efforts is sitting in little pockets all over Dell,” Jones said. “There's no central point to aggregate all of that information and all of those activities. It just can't be done. So some kind of consolidation is necessary.”

In that interview, Jones, who joined Dell from McCann Erickson in May 2007, said Dell merely created a solution that corporations ultimately wanted, but hadn't yet demanded from their agencies.

"I know that clients want it, but [they] simply aren't asking for it... Corporations have to ask for solutions in order for agencies to invest the resources necessary to put them together," Jones said.

“We're looking for an agency relationship where PR, media, Web site analytics, creative, planning, [and everything] are all fixed on one objective, which is shareholder value for Dell,” Jones added. “Right now, it's like we have a football team with 25 quarterbacks on the field.”

At Round Rock in November, Lark acknowledged the industry grumbling, saying, "A lot of people are looking from the outside-in, going, 'What the heck? This suddenly means we're not going to be able to pitch Dell and grab a piece of Dell here and there?' But, a lot of people on the periphery like this idea."

The announcement is a boon to WPP agency GCI Group, which has long held the account. It would be assumed that GCI Group - because of its legacy relationship with the brand - will be an integral part of the WPP team servicing Dell.

Clients have previously worked with holding companies to create discipline-specific, integrated agencies in the past, most famously IBM and Procter & Gamble, but this is the first major attempt to create one that housed all marketing disciplines.

This past weekend, both WPP and IPG were tendered offers. The contract was finalized Sunday.

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