Back in the mid-1980s Dell Computer shook the IT world by pioneering the sale of made-to-order PCs directly to customers. The business model proved inspired, rapidly turning Dell into a global corporation.
Nearly a quarter of a century after its formation, Dell is again making waves, applying the radical approach to its marketing communications. The company is partnering with WPP to create Da Vinci - a new global integrated marketing and communications agency.
Leonardo Da Vinci was of course a genius and an innovator. So will the initiative live up to its name? The new entity is rationalising all of Dell's previous 860 worldwide marcoms agencies into a single WPP-run business expected to employ 1,000 staff and be worth more than £2bn in billings to WPP over the next three years.
WPP agency GCI has been the computer firm's sole PR agency across Europe, Middle East and Africa since 2005.
Stuart Handley, August.One founder and former Hill & Knowlton corporate comms MD, arrived at Dell as director of comms EMEA in early February, and is involved in establishing the UK structure of Da Vinci.
During this transition period there is, however, some lack of clarity as to how things will pan out, with GCI director Paul Maguire conceding that ‘PR came late to the party' for Dell's global review.
Although Da Vinci was due to launch globally this month, Handley must now appoint a managing director for its UK arm before any changes are made in the way Dell's PR activities are staffed. GCI employees remain responsible for Dell PR at the moment; they wait to discover the extent to which they will be switched into Da Vinci and how they will be expected to dovetail work with Da Vinci colleagues from the worlds of advertising, design, direct marketing and media.
But the idea of this level of multi-disciplinary consolidation has triggered animated discussion among agency principals and comms heads (see below). Can Dell make a success of these ambitious changes?
There are some precedents for the move. WPP set up a dedicated agency for HSBC in May 2004; Team HSBC is an advertising-led model, with ad agency JWT acting as the lead.
Some voice optimism that Da Vinci could prove a logical step for Dell, a company seen as the embodiment of the formal business practice.
Adrian Wheeler, former chairman of GCI Europe, describes it as the ‘ultimate extension' of the GCI appointment': ‘It will work very well - deliver Dell the economies, conformity and reaction speed that it yearns for, and give WPP another multi-agency, multi-market contract.'
But he cautions that the structure and control mechanism is crucial: ‘All the employees will comply with the master plan, until a gulf opens up between what Dell HQ/WPP HQ wants and what the local client or agency team prefers. The only solution is for WPP to pay its agencies on behalf of Dell. If you don't control the money, you don't really control anything.'
But for many, Da Vinci looks like an example of consolidation gone too far. Trevor Gorin, head of media relations at Unilever, says he cannot foresee his firm adopting the model: ‘Having a tight roster - and the ability to go beyond it occasionally - is more important to us.'
In choosing a name that pays homage to a Renaissance polymath, Dell and WPP have set high expectations for Da Vinci. The question is whether this is an act of genius or way ahead of its time.
The former head of a Dell agency
Agincourt Communications partner
‘Everyone has to know this is a long-term engagement. A lot of things will go wrong and a lot of flak will fly around once the honeymoon is over; the agency staff need to know their jobs are not at risk when things happen and that they will be credited for trying to solve the issues co-operatively.
This is an easy statement to make, but a difficult precept to follow when everyone knows that Michael [Dell] and [WPP's] Sir Martin [Sorrell] are watching their share prices like hawks.'
The networked agency chief
Ketchum London CEO
'There is a lot to be admired about the Da Vinci model. It certainly raises the notion of integration to new levels, and there ought to be significant efficiencies for Dell. But only time will tell whether it offers a creative renaissance or a hellish procurement precedent for the industry.
Through-the-line consolidation is a step too far for most clients now. Even within PR, consolidation is the exception and likely to remain so for the immediate future. Few clients want to put their eggs in one global basket.'
The head of an independent agency
Edelman Europe president
‘Da Vinci is a procurement-led move, with its biggest advantage likely to be cost savings. But no- one has ever made this work before. IBM didn't. HSBC didn't. Dell of course may be smarter and better at it.
We will certainly not be losing sleep if the best talent of some of our competitors are told they are going to have to join a one-client-specific, advertising-dominated, procurement-led, outsourced communications function. Please, let's have more of it.'