Reconstructing AT038;T: one vision, one brand

AT038;T, BellSouth and Cingular spend a combined 3 billion a year on advertising and marketing, Lauren Rich Fine, an analyst at Merrill Lynch, estimated Monday. However, AT038;T 8220;expects reduced advertising and branding expenses to be a source of savings8221; starting in 2007, she wrote in a report.

The big news in the big deal is that AT038;T intends after the acquisition is completed to operate all its divisions as AT038;T, jettisoning the BellSouth and Cingular brands. The BellSouth name dates to 1984, when it was carved out of the original AT038;T along with other regional Baby Bells like SBC. Cingular dates to 2001, when it was formed by SBC and BellSouth to compete against companies like Sprint, T-Mobile and Verizon Wireless.

By comparison, the original AT038;T, which SBC finished acquiring in November, was incorporated as the American Telephone 038; Telegraph Co in 1885. 8220;Operating under a single brand is a powerful advantage that will allow us to realise our potential more fully,8221; a spokesman for Cingular in Atlanta, Mark Siegel, said Monday. 8220;Whatever you say about AT038;T,8221; he added, 8220;it8217;s one of the best-known brands in the world and an icon in the ad world.8221;

The qualifier about AT038;T referred to the woes the brand suffered in its final years as an independent company, tarnished by problems like customer losses and a plunging stock price. Several brand and corporate identity consultants suggested that SBC retain its name rather than adopt the AT038;T name, or adopt a new brand that was neither AT038;T nor SBC.

However, Edward E Whitacre Jr., the chairman and chief executive of SBC and now AT038;T, is a huge believer in the puissance of the AT038;T brand, so the combined company will move ahead under that name.

8220;The problem the old AT038;T faced was that it was carrying so much baggage,8221; said Robert Passikoff, president of Brand Keys in New York, a customer loyalty and brand consultancy. 8220;This is an opportunity to reinvent itself and look like the leader again.

8220;I always thought there were visceral brand values to AT038;T. It can come back, because people want to like AT038;T.8221; Indeed, Passikoff said, in a survey he just completed of brand strength in the telecommunications industry, AT038;T indexed at 114, compared with 105 last year. A score of 100 is the base.

The result for AT038;T, he added, tied it with Cingular, which also scored 114, compared with 110 last year, and with the previous category brand leader, Verizon Wireless, which also scored 114 in 2005. Verizon Wireless is owned by Verizon Communications and the Vodafone Group.

In deciding to rebrand Cingular, AT038;T is taking a third pass at the wireless company8217;s identity. First, it was branded as Cingular Wireless when it was born in 2001. Then, when SBC and BellSouth acquired AT038;T Wireless in 2004, the decision was made to erase all traces of the AT038;T brand and continue operating as Cingular. Now, Cingular will be rebranded as AT038;T Wireless.

It was estimated that Cingular spent 500 million to promote the changeover to the Cingular brand from AT038;T Wireless. The Atlanta and New York offices of BBDO Worldwide, part of the Omnicom Group, create campaigns for Cingular. A spokesman or BBDO, Roy Elvove, referred inquiries to Siegel at Cingular. Siegel said, 8220;There8217;s no way to know at this point8221; what will become of the agencies involved, adding, 8220;Any speculation would be premature.8221; The Cingular media services account is divided between OMD, another Omnicom agency, and Mediaedge:cia, part of the WPP Group.

The campaign to promote the combination of SBC and the original AT038;T to form the new AT038;T, which includes the Oscars commercial Sunday night, has a budget estimated at 1 billion.

The ads are being created by agencies led by GSD038;M in Austin, Texas, also owned by Omnicom, and Rodgers Townsend in St Louis. GSD038;M also handles the media buying and a majority of the media planning for AT038;T.

Since 2001, BellSouth has been using Grey Worldwide in New York, part of the Grey Global Group unit of WPP, to create its campaigns. The media buying for BellSouth is done from the Atlanta and New York offices of Initiative, part of the Interpublic Group of Cos. Fine of Merrill Lynch said in her report that the effects of the AT038;T purchase of BellSouth would not be felt by the media companies that sell ads until after the deal closed.

8220;Newspapers have the most to lose,8221; she wrote, because they accounted for more than 40 of the combined media spending. Yahoo offers a broadband Internet service that carries both the AT038;T and BellSouth brands, Fine noted, 8220;and presumably would not be impacted much8221; by the deal.

8212;Stuart Elliott