HP Restructures, Putting More Assignments In Play

The addition of McCann Erickson to Hewlett-Packard’s global roster last week is the second major account shuffle by the technology giant this month—and it likely won’t be the last.

As HP continues to work out its marketing plans under a newly decentralized structure, roster agencies expect more business to be up for grabs in the coming weeks.

“HP’s marketing organization has been completely transformed from a centralized marketing structure to a decentralized one,” one source said. “Little by little, HP has been opening up its assignments.”

After taking over for Carly Fiorina last year, CEO Mark Hurd began to decentralize marketing so that managers closest to individual products and services are directly involved in their marketing and advertising, giving them a greater hand in choosing their own agencies, sources said.

Under the plan, HP has gone from having a global advertising and marketing department to a structure in which three divisions—the Personal Systems Group (PSG), the Technology Solutions Group (TSG) and the Imaging and Printing Group (IPG)—each have separate advertising budgets.

Estimated at $150-200 million, the PSG account in the U.S., Europe, the Middle East and Africa—which Interpublic Group’s McCann landed after a pitch against incumbent Publicis Worldwide and roster shop Goodby, Silverstein & Partners—includes personal computers, notebook computers, iPAQ Pocket PCs, workstations, televisions and digital entertainment centers. McCann will also handle “Intel inside” promotions relating to PSG products.

McCann Worldgroup COO Eric Keshin led the pitch with McCann EMEA regional director Rupert Howell and creatives Joyce King-Thomas and Christine Jones in New York and London, respectively.

Publicis still handles the PSG account in Latin America, Asia-Pacific and Canada. However, according to sources, the Latin American portion of the PSG business is now a jump ball between Publicis and McCann, and a decision could come next month.

A majority of the U.S. TSG business is still with Goodby, HP’s global brand agency, though Publicis USA in Seattle got itself on the HP advertising roster earlier this month by winning an estimated $50 million piece of the TSG business from Publicis & Hal Riney in San Francisco. Publicis Worldwide handles the rest of the TSG account.

In addition, IPG’s Foote, Cone & Belding handles about $100 million in billings from some HP interactive and collateral work in Latin America, the U.S. and Europe. And Goodby has an estimated $100 million in billings, sharing duties with Publicis for PSG and TSG global strategy and creative. Goodby handles imaging printing group strategy and creative for the U.S.

All told, HP spends $1 billion-plus globally on marketing and advertising. About $510 million of that is spent in U.S. media, according to Nielsen Monitor-Plus.

“We constantly evaluate our advertising agency needs to ensure maximum effectiveness,” said a representative for HP, declining comment on whether any other parts of the global account were being reviewed.

Hal Riney’s print campaign for HP’s printer business depicted printers creating a rainbow of bright, colorful designs. Goodby’s global brand campaign carries the theme, “You + HP” and features TV spots in which people hold cutout picture frames around different images. When the frame is removed, the image freezes into a photograph.

As for McCann’s new assignment, Keshin said: “There’s an incredible opportunity to generate additional demand for what computers can do for people … to market the computers more assertively than simply as replacements. It would create a spark in the marketplace. We have to get people excited about what’s possible in personal computing again.”