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Ad agency bids Apple farewell

Citing an impasse over direction, BBDO West severs its 12-year relationship with Apple after the computer maker opens its account for review.

Citing an impasse over direction, Apple Computer's (AAPL) long-time advertising firm is stepping away from the struggling computer maker, after Apple said it will review the account and allow other ad firms to make their best bid.

Though BBDO West was invited to participate in the bidding, the agency said it will resign its 12-year account with Apple. In the past, the West Coast arm of BBDO Worldwide had successfully 'blunted' any attempts to open the account for review; the departure means the loss of 20 percent of its revenues.

Wall Street analysts said Apple's advertising and marketing campaigns have had mixed results.

"There were some ads that I thought they were pretty good. One great ad, it's 'ease-of-use' theme, worked well in print," said Daniel Kunstler of J.P. Morgan Securities. "The issue now is that they have been evading the whole issue of the operating system campaign and at some point they ought to be developing a strategy to promote its new systems."

Bret Rekas, an analyst with Robertson Stephens, said Apple's ads need to be aggressive, as opposed to "touchy-feely."

"Apple has not been aggressive for years," Rekas said. "They've stopped doing direct comparisons. Some of the ads that people liked best were the direct comparisons with the Mac to the PC. They're instead doing these Mission Impossible ads, when people already know about the brand. They need to sell me the product."

Apple said the reassessment comes as part of its restructuring its marketing operations and strategy.

"We have gone through the process of reconsidering all of our other existing business practices, in the past several months, and now we are doing the same thing with our advertising plans and resources," said David Roman, Apple's vice president of advertising and brand communications, in a statement.

The company is developing new marketing plans to send focused messages to key customers, while also broadening its brand marketing.

"The reason for the review is we have reached an impasse over the direction Apple should go. We do more than write ads. We get involved in the business plan and overall direction a company should take," said David Lubars, chief executive and chief creative officer of BBDO West.

He added that although management changes and corporate restructuring have led to tension between his firm and Apple for most of their lengthy relationship, it has been in the past four years that the two parties have had a widening disagreement over Apple's message. He said that in the past his firm had been able to blunt efforts to open the account up for review.

"We wanted the direction of what makes Apple brilliant as a brand and product," Lubars said. "It allows ordinary people to do extraordinary things. I think a lot of computer companies want to talk about bits and bytes, rather than what these machines can do for you."

He summed up the relationship as "not reading off the same page."

Apple, working with a short list of ad agency contenders, expects to choose a firm by the end of September.