PALO ALTO, CA: Hewlett-Packard has selected Hill & Knowlton, Porter Novelli, and Burson-Marsteller as its global agencies of record, after months of speculation in the biggest communications consolidation since IBM's PR review in summer 2001.
Tim Marklein, HP's director of corporate media relations, confirmed HP had concluded the review process, and is in final contract negotiations with three agencies. He declined to name those agencies.
But PRWeek has learned what areas each of the three will work on, barring any unforeseen circumstances. H&K will handle corporate PR and communications for the personal systems group, which includes PCs and handheld devices.
PN, which has worked with HP since 1991, will continue to provide PR for the imaging and printing groups. Burson will handle PR for the two enterprise groups - the systems group, which includes servers, storage, and software, and HP Services, which includes consulting support and managed services.
The HP-Compaq merger brought more than 50 PR firms around the world to the new HP. The company issued an RFP in early August to consolidate its PR agencies down to three.
Weber Shandwick Worldwide, Waggener Edstrom, Edelman, Golin/Harris International, Applied Communications, and the Hoffman Agency also participated in the review, although only Golin and Hoffman made it to the final round with the three selected agencies.
Golin had provided PR for HP's enterprise solutions, while Applied did the corporate work. And Hoffman, which began to work with HP a month after opening 15 years ago, provided PR to the enterprise groups now being offered to Burson.
Marklein said in August HP was undertaking the consolidation to "build the quality, consistency, and competitiveness of communications. We really need an agency model that best supports that. There are currently too many agencies worldwide to have a coordinated and focused communications effort."
Numerous firms declined to comment on the RFP, including H&K, PN, Golin, WSW, and Applied. But Hoffman president Lou Hoffman spoke openly and candidly about the loss.
"I respect (HP's) decision," said Hoffman. "They need to do what's best for them. And they believe this is best. But I would be remiss if I didn't say, respectfully, that they have made a mistake. I believe we were the best solution. But they've decided to move in a different direction.
"We're steeped in the enterprise business, and we will pick up the baton for another business," Hoffman continued. "But this is still a painful decision, partly because we've had a relationship for 15 years. We've tuned the organization to meet their unique needs."
HP is a significant part of the agency's North American revenue, said Hoffman, and the loss of that will put the North American practice into the red. The agency will probably have to make layoffs and look at other ways to cut costs, such as office space, IT investments, and marketing investments.
But Hoffman is confident that success in other geographic areas, including the "booming" Asia-Pacific region, will keep any downsizing to a minimum.