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Who Wins From HP’s Global PR Firm Reshuffle?

Arun Sudhaman  18 Sep 2012

Even for a company that is known to regularly rethink its agency support, HP’s decision to realign its multimillion-dollar PR roster signals the most notable reappraisal of its PR firm partners in several years. 

The overhaul has triggered a considerable shift in duties among the company’s trio of key PR agency partners. They follow the arrival of CCO Henry Gomez and media relations head Howard Clabo earlier this year. The duo is understood to have led the recent review of HP’s PR capabilities, resulting in the restructuring of agency duties.

For some of the the firms involved, the decisions are hardly unwelcome, In EMEA, for example, Porter Novelli is experiencing a windfall of new business, now that it has been awarded the PR mandate for HP’s newly-merged PC (PSG) and printer (IPG) units.

The situation effectively reverses Porter-Novelli’s erosion of HP business in recent years, during which it lost the bulk of its PSG mandate to Edelman, and IPG in EMEA to the same firm.

The addition of global business is a welcome fillip for Porter Novelli. The firm needs all the good publicity it can get yet, unfortunately, it cannot comment on this upturn; all of the agencies involved have been asked by HP to remain tight-lipped. 

At Edelman, the loss of the PSG account and IPG business has been mitigated by the award of global corporate duties for HP. Unsurprisingly, the firm is disinclined to comment. Yet HP billings at the firm may not decrease substantially, particularly if the tech giant once again seeks to make corporate PR a more activist element of its overall communications strategy. The company slashed its corporate PR roster in late 2011, parting ways with Weber Shandwick and Bite Communications.

The big question is why HP has decided to make these changes, even if it is hardly unknown for a new client to review agency relationships. HP declined to comment for this story although it has outlined the new roster in public, and indicated it is aiming for more clarity and speed in its communication.

One suggestion is that Porter Novelli's PC/printer unit consolidation may be linked to HP’s selection of Omnicom sister agency BBDO to handle advertising duties for the same division. Reports note that Porter’s work will focus on “marcomms and product publicity”.

Full details of the realignment are expected to emerge over the coming months. Not every market may follow the global mandate, particularly where local firm capacities do not match the agency-of-record alignment. 

HP has faced numerous corporate issues in recent years, including CEO churn and scrutiny of its business and acquisition strategy. Across both corporate and its business units, the company - say sources familiar with the situation - is now aiming to use a more proactive approach to “create a picture and reality of stability, and use that as platform from which to start to grow.”

The third firm in this equation, Burson-Marsteller, has relinquished corporate PR duties, which it took on last year, and continues to oversee enterprise and business software. While that situation may suggest a major loss of income, it should be noted that, by all accounts, HP’s corporate PR spend had dwindled by the time B-M took on the assignment. 

It is further understood that HP is continuing to work with Abernathy MacGregor, which has handled North American corporate and financial PR support, focusing in particular on M&A, crisis and investor relations.

Gomez arrived at the company earlier this year following the hire of new CEO Meg Whitman, after the 2011 departures of CEO Leo Apotheker and CCO Bill Wohl. 

“It’s not a surprise that they wanted to re-examine agencies,” said one source familiar with the situation. “My sense is they are going to be much smarter about the way they allocate resources around all of this.” 

Another source noted that some consolidation of budgets is to be expected. Whitman is committed to reducing HP’s $4bn marketing budget, and it is likely that this zeal for greater efficiency will influence the company’s communications department.

A former HP communications executive adds that the previous allocation of duties, often triggered by decisions taken in different geographies, resulted in a relatively inefficient division of labour.  

Seen from this perspective, the company's recent decisions appear sensible. Yet if HP itself is to emerge victorious from the latest roster reshuffle, much is likely to depend on how long this present configuration of PR firms lasts.

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