Mccann On AT&T Hot Seat

NEW YORK: AT&T Wireless Services, the country’s leading provider of wireless communication services, is conducting an informal review involving AT&T roster shops for its estimated $90 million account, sources said.
The search by AT&T Wireless, currently handled by McCann-Erickson’s San Francisco office, comes as the three lead agencies for AT&T Corp. in New York await a consolidation of assignments, possibly involving the elimination of at least one shop.
Foote, Cone & Belding and Young & Rubicam’s San Francisco offices have talked with AT&T executives in recent weeks about the wireless business, said sources. McCann is presenting new work on the account this week.
A representative for AT&T Wireless said he could “neither confirm nor deny” that the company was holding a review. Executives at McCann, FCB and Y&R declined comment.
Should McCann lose its wireless account, the agency would become more vulnerable to be cut from AT&T’s roster than FCB and Y&R. McCann won AT&T Wireless in early 1996, beating out FCB and Y&R. McCann has used the theme “It’s all within your reach” in its ads for the company.
AT&T Wireless is one of the fastest-growing and most profitable units of AT&T. Formerly McCaw Cellular Communications, AT&T bought the company for roughly $11 billion in 1994 after first taking an equity stake in McCaw.
While ad spending at many of AT&T’s divisions has been cut drastically, spending by the wireless division continues to grow. AT&T Wireless spent $45 million on advertising during the first half of 1997, according to Competitive Media Reporting, after spending about $50 million in all of 1996. Overall, AT&T has slashed its ad budget by some 40 percent this year to about $600 million, from nearly $1 billion annually. The company’s marketing budget has been a casualty of its efforts to cut $2.6 billion from its overhead costs.
AT&T’s three lead agencies expect the company to eliminate at least one of them from the roster. “It could happen at any moment. But we’ve been waiting for that moment for about two weeks,” said an executive at one agency. AT&T Corp.’s U.S. ad duties are split almost equally among the three shops. An AT&T representative said the company would not “rule out” an account consolidation if it “made sense.”
–with Rob Lenihan