Cost Factors Drive Qwest’s $100 Mil. Review

A desire to cut costs is driving Qwest Communications International’s $100 million review, which aims to consolidate the business at a single shop, said sources. Although the contest is between five global agencies, a smaller shop in Colorado may play a role in the outcome.

That agency, The Integer Group in Golden, Colo., creates ads for Qwest’s wireless business. Client executives have made it clear that they value their relationship with Integer, which is owned by Omnicom Group and is close to Qwest’s Denver headquarters. That led one source to conclude, “The agency that buys that agency is going to get the business.” That’s a “plausible” scenario, said another source. (Integer, which also works for Coors, McDonald’s and Procter & Gamble, could not be reached. Qwest did not return calls.)

No creative submissions were requested in Qwest’s initial RFP [Adweek, Feb. 18], and agency presentations last week focused on strat egy and fee structure, said sources. “It’s all about a consolidated pitch to save money,” said a source. Indeed, Qwest has vowed to cut overall capital spending by $300 million this year as it deals with shortfalls in revenue.

The bulk of Qwest’s creative work is split between J. Walter Thomp son in New York (corporate image, B2B) and DDB in Chicago (long-distance, QwestDex Yellow Pages). DDB and OMD, both Chicago, handle media buying and planning. The incumbents are defending against Foote, Cone & Belding and McCann-Erickson, both New York, and Leo Burnett’s LB Works, Chicago.

The presentations took place over three days before a panel of 8-10 client executives, sources said. Each shop got up to two hours. A cut to 2-3 shops is now expected, with another round of meetings—this time before Qwest’s top management, including CEO Joe Nacchio, said sources. A selection is anticipated by mid-April.