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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Sig who wrote (85582)	12/16/1998 9:20:00 AM
From: Dalin	Read Replies (2) \| Respond to of 176387

Good Morning Sig! NEWS per schwab. About the lawsuit. Sorry if old news: <Picture>Client Bites Back in Legal Snarl Pitting Thompson Against Dell Dow Jones Online News, Wednesday, December 16, 1998 at 01:40 (Published on Tuesday, December 15, 1998 at 22:37) By Sally Beatty Taking a client to court is always a risky strategy for Madison Avenue, as J. Walter Thompson's legal tangle with erstwhile client Dell Computer illustrates. WPP Group's Thompson undertook what appeared to be a simple breach-of-contract claim when it filed a lawsuit in late October in New York state Supreme Court. The big ad agency is seeking $6.4 million, arguing that Dell ousted Thompson three-quarters of the way through a year-long contract without even paying for all of its media time. This month, the Round Rock, Texas, personal-computer maker fired back with a countersuit in Williamson County, Texas, seeking to move the court fight to its home state and rattling off an insulting laundry list of complaints against Thompson. Among other things, Dell's lawsuit accuses Thompson of making "false and disparaging" remarks about Dell to Turner Broadcasting; of producing "inadequate" and "unacceptable" creative work; of neglecting to turn over payments to media outlets to which Dell owed money, as required by the contract; of mismanaging Dell's "cooperative" advertising program with Intel by failing to keep track of receipts needed so Dell could be reimbursed by Intel; of failing to produce an acceptable global ad program within an agreed-upon schedule; and of seeking new assignments from Dell even while the relationship was going downhill. For its part, Thompson vigorously denies all of the lawsuit's allegations. Remember its Dell spot this year showing a mouse wandering through a maze toward a piece of cheese -- then setting the maze on fire as part of Dell's "Be Direct" campaign? "We know that our award-winning creative work was exceptional, and independent research indicated the work was was highly effective," Thompson said in a statement. "Obviously, a court will ultimately decide if Dell is justified in breaching the agency-client agreement." What's behind all of this? Not lost on Madison Avenue is one telling detail: Dell ousted Thompson to switch to an agency that had previously worked with a new Dell marketing executive, Scott Helbing, when he was at Pizza Hut. He arrived early in Thompson's contract but hadn't participated in Thompson's hiring. Now Dell's estimated $100 million-plus ad account is with Omnicom Group's BBDO Worldwide. As Madison Avenue is painfully aware, advertising decision-making has fallen ever farther down the corporate food chain in recent years, often winding up in the laps of middle-ranking marketing directors. One result is that ad agencies are increasingly vulnerable to getting the ax when marketing chiefs switch jobs. Dell officially hired Thompson in December 1997. Dell claims in the lawsuit that it began rejecting Thompson ad ideas in February (that was the month Mr. Helbing arrived as Dell's vice president, corporate branding). Less than nine months later, Thompson was out, and BBDO was in. Word that BBDO was trying to get its nose under the Dell tent began appearing in trade publications in May (the latest legal spat was first reported in Advertising Age). In June, Thompson launched its first ad for Dell (the mouse and maze). But Thompson was already behind schedule, the Dell suit claims; a full-fledged campaign was supposed to have begun two months earlier. According to Dell, when the computer maker repeated its concerns to Thompson in early July, Thompson "admitted its account team was 'weak' and that it still needed to staff the program with a 'strong' person to run the account day-to-day." On July 22, Dell claimed that it warned Thompson that the agency had "one last chance" to prove itself. It was agreed, the suit says, that Thompson would make an initial presentation to Dell Aug. 17 and a final presentation to Dell management Aug. 27; Dell says it rejected the Thompson work at both meetings. By September, Dell had already yanked the mouse ad off the air. News reports that BBDO was still angling to land the account continued. In September, Bob Jeffrey, head of Thompson's New York office, got a call from Dell informing him of the agency's dismissal. What's at stake, besides reputation? Thompson is on the defensive in the wake of management turnover in North America and the loss of several high-profile accounts. For example, it lost the Sprint account, with ad billings believed to exceed $150 million, after losing longtime client Eastman Kodak the year before. For Thompson, the amount it is seeking from Dell could mean meeting or missing earnings targets of the parent WPP, says analyst Jim Dougherty of Prudential Securities. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved. Companies or Securities discussed in this article: SymbolNameNASDAQ:DELLDell Computer CorpNYSE:OMCOmnicom Group IncISEL:WPPWPP Grp.NASDAQ:WPPGYWPP Group Plc ADR Return to Company Headlines <Picture> Select news or report:Company News S&P Company Report First Call Earnings Vickers Insider Trading S&P Industry Report To receive headlines or reports, enter a symbol in the box below or search for a symbol. <Picture>