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Dell reviewing ad agency contract

Dell is reviewing its advertising agency contracts, while Packard Bell NEC hires a new agency.

With the battle to win consumers reaching a fever pitch, Dell is reviewing one of its advertising agency contracts, while Packard Bell NEC said today it has hired a new agency.

Dell Computer is looking to expand its presence in the home and small business market, and is reevaluating its $30 million account with San Francisco-based Goldberg Moser O'Neill. Several agencies are in the running for the account, including the current agency and Dell's agency for corporate brand advertising, BBDO Worldwide.

The contract up for review comprises business for the Home and Small Business Group at Dell, a spokesperson said.

"This is not unlike a situation where we periodically evaluate component suppliers," especially at a time when a business unit is growing rapidly, said the spokesperson.

Packard Bell NEC, which was the only top-five computer vendor which suffered a decline in PC shipments in 1998, is trying to shore up the image of its NEC brand by hiring Los Angeles-based Suissa Miller.

Both companies have their work cut out for them in the cutthroat consumer market, where profit margins have declined dramatically as the popularity of first sub-$1,000 and now sub-$600 PCs have soared. Competition for small business sales is growing as well, with all major vendors offering products tailored to the needs of these markets.

Advertising can be an effective means to stand apart from the crowd. Take Apple Computer, for example. After giving BBDO Worldwide the boot and starting up the grammatically controversial and expensive "Think Different" campaign with TBWA Chiat/Day, the company has seen sales of its consumer iMac computers leap skyward.

Packard Bell NEC launched its last advertising campaign in July of 1998, with one commercial focused on the Packard Bell PC brand airing nationwide. Dell has misfired before with ad campaigns--its previous corporate ad campaign, called "Be Direct," ended up with Dell's firing the J. Walter Thompson agency and hiring BBDO Wordwide. Dell and the Thompson agency have since sued each other over alleged breach of contract and other complaints.