Enfatico's failure has benefits for PR

When Enfatico announced last week that it would break apart the firm, the decision seemed to validate industry skeptics who speculated the all-in-one agency experiment was doomed from the start.

When Enfatico announced last week that it would break apart the firm, the decision seemed to validate industry skeptics who speculated the all-in-one agency experiment was doomed from the start. The PR division will now be housed under fellow WPP firm AxiCom/Cohn & Wolfe Group, while advertising and other disciplines were moved into various Young & Rubicam Brands.

The project first stunned the marketing world when in 2007 Dell hired WPP to co-create an agency that would provide all of its marketing services, investing $4.5 billion in the venture over three years. But definitive cracks in Enfatico's plan surfaced last year when WPP folded Enfatico into Y&R Brands.

“This was a very ambitious idea to build out all the marketing communications under one plan,” says Peter Stringham, CEO of Y&R Brands. “You can point to the recession or just the fact that it didn't fit into Dell's plans, but it was impossible to get Enfatico resourced fast enough.”

Despite these weighty challenges, insiders, including Stringham, say Enfatico's PR operation was actually among the more successful elements of the now defunct endeavor.

“PR was one area that was functioning quite well from the beginning,” he says.

When asked why PR succeeded more than the other disciplines, Stringham speculates that the team wasn't as overextended. “PR was focused on one place and the team wasn't scattered around the world,” he says. “The team was very well-knit and focused.”

PR led Dell's launch of Adamo XPS last year, as well as the expansions of Dell's premium gaming line Alienware and its “Efficient Enterprise” effort last year, says Kelly McGinnis, who was CCO for Enfatico and now leads AxiCom's US operations based in San Francisco.

“Even when PR was physically separated from some of the other [marketing disciplines] in San Francisco, it was co-located in other places like Austin,” McGinnis says. “We always have the privilege of being at the table on every integrated effort.

But this intense focus also equaled a lack of global footprint for the PR team and a lack of integration, hindering the team's chances for winning new, global business, say others.

“The reality is, there was very little integration between PR and the rest of the team,” says one source familiar with Enfatico. “It was operating like just another PR firm. People were really excited, but after a few months they wondered what was different.”

Stringham disagrees. “[PR was] so integral that they were often the first messaging ideas were coming out of PR rather than advertising.”

Another source familiar with Enfatico says its leadership had trouble breaking away from typical agency barriers, giving people titles and duties reflecting traditional hierarchies.

Enfatico had a single P&L, but now that each discipline has been peeled and refitted into independent organizations, they will have to compete. Andy Lark, VP of global marketing, communities, and conversations at Dell, who says PR along with AR were the “easiest” part of Enfatico, says even this won't change the game for Dell.

“The PR team is still a part of ‘Team Dell,' and they're still going to be sitting at the table with the other disciplines,” Lark says. “This is a change on the WPP side, but for us we still have an integrated view on the budget and its allocation.”

Y&R's Stringham acknowledges that competing P&Ls can hinder integration, but he says there are other ways to foster it such as incentives and shared bonus pools.

The PR team has recently relocated to a new building that also houses Y&R's San Francisco advertising team to foster more integration and, ultimately, integrated pitches, he adds.

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