IBM Consolidates Interactive Accounts

Beginning next year, IBM Corp. will limit its interactive and direct marketing spending to two WPP Group agencies — OgilvyOne Worldwide and Wunderman.

Armonk, N.Y.-based IBM said an internal marketing team had decided to streamline its integrated marketing and efforts at so-called “demand generation” across all of the company’s services and product lines.

IBM does not disclose its spending for direct marketing, but online advertisements account for about 7 percent of its approximately $600 million annual media spending.

As a result, the two agencies will share oversight of a wealth of advertising initiatives, including banner ads, direct mail, and emerging media work.

Currently, IBM works with a total of seven agencies on direct and interactive marketing projects. Although the new agency configuration means IBM will be working with OgilvyOne’s OgilvyInteractive division, the company will continue to get help with its Web site from pure-play interactive shops R/GA, Modem Media and AnswerThink. These companies will work with the ibm.com team on strategy, site design and implementation.

In explaining its decision, IBM said that it had been impressed with OgilvyOne and Wunderman’s presence in IBM’s key markets, as well as competence in the relevant fields.

Big Blue last reorganized its direct marketing account in 1998, when it consolidated the work — previously handled by a roster of more than two dozen agencies — with three agencies. Soon afterwards, IBM added the four interactive shops to its roster to augment its existing agencies’ efforts in the emerging online marketing space.

Now, the newest spate of changes comes as the big, publicly-traded agency groups are wielding more power than ever, and stepping up efforts to present themselves as “one-stop-shops” for any sort of agency work.

For instance, WPP, Chicago-based Bcom3, New York-based Interpublic Group and Omnicom within the past eight months have all brought their interactive shops closer in line with their traditional agencies, and now routinely shop both their traditional and new media advertising services to clients as a combined package. (In another move of consolidating the new into the old, Wunderman re-took its name earlier this year, having been known as Impiric for about sixteen months).

But IBM says this sort of alignment works well in conjunction with its new push for integrated, cross-business messaging.

“The move to this new agency model reflects IBM’s response to shifts in the business environment,” said Maureen McGuire, IBM’s vice president of worldwide integrated marketing communications. “Interactive marketing is no longer a stand-alone discipline. It is an integral component of direct marketing, providing the two-way information exchange our customers demand as well as building and maintaining long-term customer relationships.”

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