MCI, Sprint Create $1 Bil. Account

New Entity Will Keep 2 Brands, But Observers Expect Agency Fallout NEW YORK--As part of their intended merger, MCI WorldCom and Sprint are putting together a joint task force which, ultimately, will decide how a combined $1 billion in advertising tasks will be assigned. One issue that MCI CEO Bernard Ebbers has already decided: The new company will continue to use the Sprint and MCI brands. "How they will remain is yet to be determined," said an MCI official. "There is such great equity in both, we would be crazy not to utilize them." Still, the $115 billion proposed merger is likely to produce duplication and redundancies on both sides. Media buying, for instance, would be ripe for consolidation. Agency lineups, however, will likely be determined by the positioning of the company's individual brands, rather than the global reach or network capacity of an agency, said Tim Kelly, former vice president of marketing at Sprint and now evp and chief marketing officer at Tickets.com. A two-pronged approach is one option. "The Sprint brand is strong in the upper end of the marketplace, where all the future opportunities are going to be with bundling and customer service," said Kelly. "MCI has had more of a price connotation to their brand historically. That could be a strategy, making one a value brand and one a premium brand." Several agencies have an immediate interest in the process: Messner Vetere Berger McNamee Schmetterer/Euro RSCG (which handles all of MCI), McCann-Erickson (most Sprint consumer advertising) Grey Advertising (Sprint corporate and business-to-business), Publicis & Hal Riney (Sprint PCS wireless phone service) and D'Arcy Masius Benton & Bowles (Sprint's ION broadband Internet service, plus an undisclosed internal branding project). MCI spent $660 million on ads last year; Sprint spent $360 million. MVBMS appears to occupy a strong position as the decision-making process moves ahead. First, it comes with the acquiring entity--not in itself a guarantee, but at least the shop has the ears of the new bosses. Second, history has favored MVBMS. When MCI acquired WorldCom, it ditched the latter's shop, Earle Palmer Brown. More importantly, MVBMS principal Tom Messner has a famously close relationship with MCI, which continues to shower praise on his shop. MCI underscored its support for MVBMS last week. MVBMS has used Michael Jordan and Tweety Bird in its ads. MVBMS declined comment; a source said only, "It's way too soon to say, the merger will probably take a year or longer." MVBMS buys media through SFM Media. For Sprint, McCann, Grey, Riney and D'Arcy all have business at stake. "Short term you will see very little in terms of branding and agency structure," said Gary Stibel, principal at The New England Consulting Group, Westport, Conn., who is advising the client on its marketing. "Long term, the likelihood of change is very high. They will give all their agencies their day in court, and probably choose the agency that does better work rather than the one who has stronger political ties." Stibel indicated that that the new company will also be interested in a global network. "They don't call it Worldcom for nothing," he said. McCann has worked for Sprint for only about a year, but has created a raft of ads and the line, "Sprint ahead." Grey, a Sprint shop since '95, recently developed the "Point of contact" theme, which McCann is now using and Riney will adopt it in its ads. Nonetheless, one observer close to the client said McCann may have an edge: "McCann has done a terrific job and it really has strong telecommunications credentials." McCann also handles all Sprint's media buying; planning is split with Grey. Don Dillon, CEO of McCann North America, was more circumspect: "Anything's possible. I think at this moment in time, the question about who their agencies [will be] is probably a little bit down on their list." D'Arcy and Grey declined comment. In the short term, Riney will likely be cheered by Ebbers' statement that the Sprint PCS brand will be retained. --with staff reports The MCI-Sprint advertising task force will include a large number of both clients' marketing executives The company has no chief marketing officer. Len Lauer is president of the consumer services group, Dan Alcazar is vp of marketing and Terri Morrow is vp of emerging markets. On the business side, Sue Sentell is president of marketing and operations and Robert Harvin is vp of public relations and brand management. The company's marketing is also divided into business and consumer segments. On the consumer side, svp of marketing John Donoghue, who works out of the company's Arlington, Va., office, reports directly to Tim Price, president of MCI WorldCom communications. On the business side, Rob McMartrie is vp of product marketing, Steve Young is vp of global channel marketing and Frank Grillo is vp of marketing and administration. Jim DeMerlis, an MCI veteran, is vp of data and enterprise product marketing and Jill Canino is director of business advertising. All of them report to Price and work out of the company's Atlanta office.

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MCI, Sprint Create $1 Bil. Account

Richard Linnett

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