SGI Edges Toward Consolidation

Silicon Graphics Inc. is planning to move its estimated $20 million corporate branding account to new roster shop McCann-Erickson when its contract with lead agency CKS Partners comes up for renewal in July, said sources close to the client.
“People have not been called into one room to discuss consolidation,” said Jerry Giaquinta, vice president of corporate marketing and communications for SGI, Mountain View, Calif. “But our objective is to open up [that issue] in the next few months.”
Sources said the issue of consolidation emerged during SGI’s recent review for the estimated $40 million Visual PC account, which McCann won earlier this month [Adweek, March 9]. CKS pitched the account, but was not a finalist.
One source directly involved with the review said “several top-level executives” from SGI’s corporate offices joined the committee in making the decision on that business. “This started as a pitch for the Visual PC account, but it turned into a review for all of SGI’s business,” said one source.
Giaquinta stressed that McCann’s work for the Visual PC launch takes priority over agency consolidation.
CKS became SGI’s corporate agency last summer, after the client split with Cole & Weber, Seattle.
SGI chairman and chief executive officer Edward McCracken has since resigned, replaced by Hewlett-Packard executive Richard Belluzzo.
“The corporate account was literally handed to CKS by McCracken,” said a source close to the Cupertino, Calif.-based client. “That’s why this last review was so important. CKS was supposed to prove themselves to [SGI’s] new management.”
“We have not been told anything about consolidation right now,” said Mark Kvamme, CKS chairman and chief executive officer. “I do expect we will be looking at the possibility in the next four to five months.” –with Judy Warner