Slumping Client Contacts a Dozen Shops for $10-15 Mil. Account
BOSTON--Networking company Cabletron Systems has sent requests for proposals to agencies regarding its ad account, which is currently handled in-house.
The client spends about $10 million annually on advertising, said Stephan Gray, senior vice president of worldwide marketing at Cabletron. That figure will likely increase to $15 million within the next year, he said.
Questionnaires have been sent to about 12 agencies located mainly in the Northeast. Responses are due back to Cabletron this week.
While declining to identify the shops that had been contacted, Gray said a range of agencies were sent questionnaires, including ones with more than $100 million in annual billings as well as creative boutiques.
Although Cabletron has contacted full-service agencies, there is a chance the account will be split along creative and media lines. There is also the possibility that media duties will remain in-house, Gray said.
The company is seeking a shop that can handle both branding and product assignments, though creating a strong corporate image is essential. "Our technology is known, but not our brand name," Gray said.
A list of contenders will be ready by late December. Cabletron officials will then visit those agencies to gauge chemistry and capabilities, and some shops may be cut from contention at that time, Gray said.
Finalists will make presentations at the company's Rochester, N.H., headquarters in late January, with a decision coming shortly thereafter, according to Gray.
Cabletron last week saw its stock plunge 32 percent after executives warned that third-quarter earnings would decline. In a prepared statement, Cabletron chief executive Don Reed offered no reason for the slump.
The company did say it will take a $25-30 million pretax charge in the fourth quarter for restructuring, which could include plant closings.
Cabletron recently tried to bolster its product offerings with a $430 million buyout of Digital Equipment Corp.'s networking unit.
Gray did not directly attribute the agency search to the company's recent earnings troubles. "It was just time to look elsewhere," he said. Cabletron scuttled a review two years ago, opting to keep its advertising account in-house.
One of Cabletron's chief competitors, Bay Networks in Santa Clara, Calif., recently completed a review, tapping Hill, Holliday, Connors, Cosmopulos in Boston for creative duties and Western International Media's office here for media buying chores.
Reed joined Cabletron from Bell Atlantic in September. Gray joined the company about a year ago from Digital Equipment Corp.
High-technology prowess is a plus, and Northeastern shops are strongly preferred for travel and logistical reasons, he said.