AT&T: Ads Are Investment; Shops Must Project ROI

AT&T Business Services, AT&T’s largest source of revenue, is rethinking its attitude toward advertising. Coinciding with the review for a new $100 million B2B assignment is the division’s new philosophy that advertising is a “strategic investment,” rather than an “expense,” said Bill O’Brien, marketing vp for AT&T Business Services.
As evidence, contenders pitching AT&T’s new account have been given the unusual task of projecting the return on investment for advertising. They have also been asked to recommend which services in AT&T’s considerable portfolio should be most heavily advertised.
O’Brien, who is overseeing the review, said, “Advertising won’t be treated just as an expense, but as a strategic investment” on par with the likes of software development and staff resources. This is the first time, he noted, that AT&T Business Services has asked for this information.
Three agencies remain in contention for the assignment, O’Brien confirmed. Cliff Freeman and Partners, here, has pulled out of the review, leaving roster shops FCB Worldwide and Young & Rubicam, both New York, and Schifino Lee, Tampa, Fla.
The B2B assignment, which went into review earlier this summer [Adweek, July 3], is pivotal to AT&T’s future branding efforts. The telecom is trying to move away from its 20th-century image as a long-distance carrier toward an image that encompasses its growing array of services. “This [assignment] is really putting the communications recommendation into the fabric of the company,” O’Brien said.
The winning shop must present a business plan based on a thorough forecast of the category marketplace and competitive landscape, and make ad
recommendations on that basis, O’Brien said. The company’s Business Services unit provides services such as Internet protocol, Web hosting and voice-data systems, and serves “ev-erything from mom-and-pop shops to global entities,” O’Brien said.
Executives at FCB, Y&R and Schifino Lee declined comment.