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Sprint Nextel hires new advertising firm

Sprint Nextel Corp. has named Goodby, Silverstein & Partners, in San Francisco, as its new advertising agency as the carrier looks to reinvigorate subscriber sales and its slumbering stock.

“Goodby’s sterling reputation and creative talents are second to none and together we will deliver a more integrated and strategic brand execution,” said Mark Schweitzer, Sprint Nextel’s chief marketing officer.

The nation’s third-largest cellphone carrier spent $1.2 billion on advertising in 2006, according to TNS Media Intelligence. However, in January when the carrier began looking for a new advertising firm, a Sprint Nextel spokeswoman indicated the amount the carrier spent on advertising was likely to drop.

Sprint Nextel has been putting a fair amount of its marketing dollars behind sports sponsorships, and currently is in the midst of two high-profile, long-term deals, one for five years and $600 million with the National Football League and a 10-year, $700 million NASCAR pact.

In December, Sprint Nextel shuffled its marketing department, naming Bill Morgan as senior VP of brand advertising, overseeing brand management, advertising and media strategy and reporting to Schweitzer. Morgan, who was one of the leaders of the company’s search for a new ad agency, worked with Goodby when he was at SBC. Also hired to fortify marketing was Matt Carter, senior VP of customer retention.

Sprint, at the time of its merger with Nextel, retained two advertising agencies on the separate accounts, Publicis & Hal Riney in San Francisco, which handled Sprint, and TBWA/Chiat/Day in New York. However, it re-ordered the two agencies’ duties, giving Riney the business-to-business assignment, and placing consumer advertising with TBWA. The merged brand launched with the tagline “Yes, you can.” Last fall, TBWA devised the current Sprint tagline, “Power up,” and introduced “Sex in the City” actor Ron Livingston as spokesman.

Riney and TBWA dropped out of the carrier’s advertising review before Sprint Nextel narrowed the field to three finalists. Interestingly, TBWA is the agency for Apple Inc., which is launching the iPhone with AT&T Inc. The third agency finalist in the review, Young & Rubicam in New York, was eliminated earlier this week.

In the end, both Goodby and Ogilvy had extensive telecom experience with previous incarnations of AT&T Wireless Services Inc., which was acquired by Cingular Wireless (now AT&T Inc.).

Ogilvy, AT&T’s longtime agency, was in part responsible for the “raising the bar” concept that BBDO melded into Cingular advertising. Some of that branding has been used to rebrand Cingular to the AT&T name. Goodby, meanwhile, at one point stole some of the AT&T work away from Ogivly and developed a series of emotional ads around the iconic “Reach out and touch someone” line.

The ad agency hire comes at a time when the long period of growth for carriers is coming to an end. The U.S. cellphone market is reaching a saturation point, according to several studies. With some 230 million subscribers nationwide, about two thirds of Americans likely to acquire a phone have one.

The carriers also are struggling to differentiate their offerings. Verizon Wireless led the charge with its reliability claim as illustrated by its “test man” advertising. Cingular, now AT&T, joined in with its claim of “fewest dropped calls.” Even T-Mobile USA Inc. is making a similar claim in certain markets where its record is strong.

Alice Z. Cuneo and Lisa Sanders are reporters with Advertising Age, a sister publication with RCR Wireless News. Both publication are owned by Crain Communications Inc.

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