ANALYSIS: Agencies face tough task as they brace for HP battle

HP's agency consolidation brings to mind IBM's change last year. But this could be a more competitive field, not to mention a difficult job once it's won

HP's agency consolidation brings to mind IBM's change last year. But this could be a more competitive field, not to mention a difficult job once it's won

HP's agency consolidation brings to mind IBM's change last year. But this could be a more competitive field, not to mention a difficult job once it's won. By Andrew Gordon If Hewlett-Packard's announcement that it would consolidate its PR efforts brought on a bout of deja vu, you're not alone. At this time last year, another hi-tech giant - IBM - announced that it had consolidated its numerous PR agencies down to just three: Text 100, Magnet Communications, and OneBlue. The two consolidations are quite similar. More than 50 PR firms represented IBM around the world. Same goes for the post-merger HP, which will narrow down its agency affiliation to a few lucky firms. And HP's rationale is quite similar to IBM's. "We undertook our global agency project for very simple reasons," says IBM spokeswoman Carol Makovich of last year's mega-review. "To get the best possible talent we could find, and to help align and strengthen our messaging. On both accounts, we've made enormous progress." When it comes to PR, less is more. By working with fewer firms, the companies hope to create more consistent global messaging. "There are currently too many agencies worldwide to have a coordinated and focused communications effort," says Tim Marklein, HP's new director of corporate media relations, who just left Applied Communications for the job. Who's in the hunt Among those more than 50 agencies that represented HP and Compaq at the time of the merger are Applied, The Hoffman Agency, Porter Novelli, Weber Shandwick Worldwide, Golin/Harris, Hill & Knowlton, and Blanc & Otus. Many of those agencies declined to comment for this article, and it's no surprise. Quite a bit is at stake, and no one's going to jeopardize their relationship with HP. "We're going through an unprecedented downturn, and opportunities like this are few and far between," says Paul Jensen, EVP and head of Magnet's technology practice, who led his agency's bid last year for a piece of IBM's business. "This is going to be gut-wrenching [for those firms]. So much more is at stake now, even more than last year." About a dozen firms have received an RFI, says Marklein, although he won't divulge which ones. As for the process, much is unknown, only that those firms who respond to the RFI will make presentations, after which HP will issue an RFP. HP will pick three to five firms by mid-October, so that the agencies are in place by the beginning of the new fiscal year, November 1. "I think in general, HP will continue to improve the speed and quality of its communications worldwide," says Marklein. "There is a lot more we can to do communicate our message with more clarity so that people truly understand what HP stands for in the marketplace." The media has not always included HP in discussions of the hi-tech market, and have not looked to it as a bellwether of what the future holds. That will change with the new HP, says Marklein, and its new PR agencies will lead that charge. "There's an incredible wealth of innovation that doesn't consistently see the public eye," he says. "We want that to be recognized - for example, the company has pretty deep engineering roots. But HP hasn't been as proactive in its media relations as it will be. One reason we're interested in [the consolidation] is that the new HP has an incredible opportunity to set the agenda for where the technology industry goes next." So whoever HP deems to be worthy of its worldwide communications will help the company not only better represent its rich heritage and history, but also make sure HP has a place at the table among the hi-tech giants. And those who don't make the cut will feel nervous when recalling the fate of such agencies as TSI Communications, the Weber Shandwick subsidiary that lost its $10 million IBM business and was forced to lay off the majority of its staff. (The agency identity was eventually lost all together when WSW reorganized its operations following the merger with BSMG, when the Interpublic Group acquired True North Communications.) Global positioning in the works With HP in the hunt for global PR firms, and the increasing tendency for major corporations to investigate the possibility of expanding their one- or two-market business with an agency into multiple markets, agencies are already expanding. It could very well be a happy coincidence, but with a perpetual economic downturn, certain agencies are choosing to go global at roughly the same time HP announced its consolidation plans. A few weeks ago, Blanc & Otus announced the opening of a London office. And the Hoffman Agency just announced the creation of a new position, VP of global services. But whatever agencies are doing to gear up for the next two months, Jensen warns it will be grueling. "No matter how good you felt about [the RFP], you could never relax," says Jensen, who at one point moved his wife and children to their vacation home, and worked 12-hour days. "You need to have a lot of stamina. We did incredibly well. But it was always down to the wire. The last few weeks were tough. It was always another week before you knew what would happen next. From the RFI to agency selection, we went through multiple rounds." With IBM the biggest pitch in Magnet's history, the firm went above and beyond what it had ever done for previous clients, and Jensen suggests those firms going before HP do the same. "Be prepared to write off a lot of unbillable time," he says. "And someone in the organization needs to be able to look at the forest for the trees. They need to ask, 'Is this creative enough? Is this strategic enough?' "We put together a lot of drawings and charts and diagrams to bring our ideas to life," he continues. "We didn't just suggest articles. We actually wrote the articles and mocked up the magazine." Jensen also recalls during one presentation to 50 people in an auditorium, which was scheduled right after lunch. "We knew that about 20 minutes after eating, people were going to start feeling a bit sleepy. So we brought along a cooler of Red Bull and high-caffeine drinks. It was fun. I had a great time. And it was the most exhausting but rewarding pitch I've ever done." HP could be even more complex than IBM, as the merger has people walking some precarious political tightropes. With so many internal and external PR relationships at HP and Compaq, alliances and politics are not crystal clear, and will certainly complicate matters. And those who think HP is just one big happy family after the merger need to look again. The hi-tech media covered a recent spat between HP and Compaq executives over internal computer operations at the "new" HP. Such divisions might rear their ugly heads during the RFI and RFP processes as well. But whoever receives HP's blessing will certainly have their work cut out for them. Agencies will be faced with helping position and brand HP after a very tumultuous merger that was practically all spin and reactive PR, not proactive communications. HP, which has been relatively quiet since the merger as it shapes its marketing strategy, needs agencies that can, as Marklein puts it, "build the quality, consistency and competitiveness of HP's communications." The HP and Compaq merger was an exhausting and arduous media event. No doubt the agencies hoping for the new HP's PR business will face their own trial by fire.

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