Enfatico, the standalone global agency that WPP Group built for Dell, is being submerged into the Young & Rubicam Brands division of WPP, with Y&R now expected to play a significant role in creative development.
The move comes after client executives raised concerns about the operational efficiency and creative work of Enfatico, said a source. Last week, top Y&R execs met with Dell leaders at the company's Austin, Texas, headquarters, precipitating the shift this week, the source added.
Enfatico worldwide CEO Torrence Boone will now report to Y&R Brands CEO Peter Stringham. Previously, Boone reported to WPP CEO Martin Sorrell.
The change comes at a critical time. WPP is nearly halfway through the three-year contract it signed with Dell in December 2007 and has lost some allies on the client side. Casey Jones, vice president of marketing in the U.S., and chief marketing officer Mark Jarvis -- key decision makers in the review that WPP won and architects of the dedicated agency plan -- exited in November and December, respectively.
Jarvis' role was filled by Erin Nelson, who previously was vp, marketing for Dell's operations in Europe, Middle East and Africa region. Nelson started in January.
At the same time, Enfatico has developed more slowly than expected, with the shop not finding a CEO until May 2008 nor settling on a name until June and missing Sorrell's target of hiring 1,000 staffers by March 2008. The shop reached the 1,000 threshold in September, but in February cut its staff by 8 percent. Enfatico now employs about 750 staffers at 13 offices in 10 countries.
Finding top talent to work at a single-client agency also has been a major challenge, according to sources.
Making Enfatico part of Y&R Brands will "give Enfatico and Dell access to the broader talent and resources that our larger group of companies can provide," Stringham wrote in an internal e-mail to staffers. "We're delighted to work with Dell. As a network, we are seasoned at working collaboratively. We expect this new addition of Enfatico to enhance our individual and collective efforts."
Y&R contributed to WPP winning Dell and the agency's chief marketing officer, Mitch Caplan, was interim CEO of the fledgling shop -- then operating under the temporary moniker of DaVinci -- before WPP recruited Boone from Digitas in Boston, where he was president.
Boone had no immediate comment today. In a statement, however, the agency described the move as "strategic decision" that "responds to the current economic environment by allowing Enfatico to tap Young & Rubicam Brands' available resources for Dell and other clients."