Thursday, January 15, 2015

12396: Verizon’s Diversity Disconnect.

Advertising Age reported Verizon has tapped Wieden+Kennedy for branding work. On the one hand, it’s a clear case of Corporate Cultural Collusion, as the move is certainly tied to the recent arrival of Verizon CMO Diego Scotti, who has professional history with the Portland-based advertising agency. On the other hand, mcgarrybowen is the current Verizon AOR—and a shootout between W+K and mcgarrybowen would be like a pick-up game between LeBron James and Kevin James.

In recent years, mcgarrybowen has won Agency of the Year honors for being a strong-yet-safe shop that delivers conservatively client-friendly creative. But can such a strategy succeed in an age where advertisers must justify marketing expenditures against quarterly earnings?

Then again, does either shop deserve to service Verizon? The company is consistently recognized as a DiversityInc Top 50 Company for Diversity. So why would Verizon conspire with one agency whose co-founder admits diversity in the advertising industry is “fucked up” and another where nepotism and exclusivity reign? There’s a definite disconnect between what Verizon says and does regarding diversity.

Verizon Taps Wieden & Kennedy For Brand, Strategy Work

McGarryBowen, McCann Remain on Telecom Titan’s Roster

By Mark Bergen

Verizon, the nation’s largest wireless carrier, has tapped Wieden & Kennedy for brand work, Ad Age has learned.

According to people familiar with the matter, the marketer is enlisting Wieden to handle creative and strategy work for the Verizon brand and its network. Products and services are excluded from the brief, they said.

Verizon spokesman James Gerace confirmed that the company has tapped Wieden, but declined to provide more detail. He added that McGarryBowen remains agency of record for the wireless business and that Interpublic’s McCann remains AOR for its Fios business.

Wieden & Kennedy declined to comment and referred calls to Verizon.

According to the most recent figures from the Ad Age DataCenter, Verizon Communications is the sixth-largest U.S. advertiser, spending $2.4 billion in 2013. In the third quarter, Verizon added 1.5 net retail connections and posted revenue of $31.6 billion.

The agency addition comes only a few months after Diego Scotti joined the telecom as chief marketing officer. Prior to joining Verizon in October, Mr. Scotti was a top marketer at J. Crew and Conde Nast and was also head of global advertising and brand management at American Express Co., where he worked with Wieden & Kennedy.

Verizon selected McGarryBowen in 2010 as agency-of-record for its wireless business, replacing McCann Worldwide. McCann retained the account for FiOS, Verizon’s broadband service.

Historically, Verizon has remained staid in its marketing—leading with its network accolades—while rival AT&T is more focused on branding campaigns. One of Verizon’s recent attempts at brand marketing, a content-marketing site called SugarString, was folded shortly after its launch.

During 2014, as T-Mobile shook up the wireless industry, AT&T responded with multiple new plans and assertive advertising. Verizon largely did not.

However, in December, the carrier admitted that pressure from competitors had forced it to increase promotional spending during the holidays, which would dampen fourth-quarter profits. The company’s churn rate, or subscriber turnover, remains low at 1% for postpaid accounts. But it has risen this year in the face of steep discounts from T-Mobile and Sprint.

Verizon also has accelerated its retail marketing lately, opening up three flagship outlets in recent months. The company releases fourth-quarter earnings Jan. 22.

Contributing: Maureen Morrison, Malika Toure

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