AT&T’s Agency About-Face

Just two days after AT&T confirmed a review for new regional advertising business, the client said the search is off. The reversal came after lead shop Young & Rubicam presented several new creative concepts.

On Tuesday, client rep Gary Morgenstern said AT&T marketing executive Cathy Constable had been talking to “small boutique agencies” about regional ad assignments. But by Thursday—a day after the meeting with Y&R—Morgenstern had backed off that statement.

“That was something Cathy was exploring,” he said. “I don’t see anything progressing further at this point.”

The flip-flop was especially curious since Morgenstern also said on Tuesday that the regional search was unrelated to the $300 million worth of AT&T business at Y&R. But by week’s end, the story seemed to change, and it did appear that Y&R’s performance had influenced the decision to halt the regional search.

“They impressed everybody,” said Morgenstern of the work Y&R showed.

Going into the meeting, Y&R was said be under considerable pressure, given the recent changes on both the client and the agency side. Y&R has a new creative director on the business—managing director of creative Ann Hayden—and AT&T recently installed a new president of consumer services, John Polumbo. Polumbo, a former svp in business services, succeeded Betsy Bernard, who was promoted to president of the corporation.

The agency also has seen an invasion into its turf this year. In April, AT&T hired then-freelance creative director Gordon Bowen to produce a TV campaign for AT&T Unlimited. (Those spots are no longer running; an older ani mated spot for long distance is back in the rotation.)

Y&R did not sell through any work last week despite the enthusiastic re sponse from AT&T, said sources. Sev eral of the concepts will be tested before the client decides which campaign to produce, according to sources.

The agency referred calls to the client.

The episode illustrates not only the ever-changing dynamics at AT&T but also the roller-coaster reality of an incumbent’s life in 2002—from “hero to zero,” as one source put it. Or, in this case, from zero to hero