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Breaking: Enfatico Folds Into Y&R, WPP Is Feeling The Burn


Our Google alert has alerted us to the news that WPP’s Enfatico will be merged with Y&R. From the WSJ, who broke the story:

“The move is a retreat from one of the most ambitious projects on Madison Avenue – an effort to eliminate turf wars by housing many different marketing disciplines within a single firm. The structure was one of WPP’s key selling points when it landed Dell’s advertising and marketing business in December 2007.”

A statement from the agency read that this was “a strategic decision” and that “Enfatico remains a standalone brand alongside Y&R’s other companies including Y&R Advertising, Wunderman, Burson-Marsteller, Landor and others.”

You knew this was coming. From the beginning, Enfatico was the subject of the ad industry’s jeers. One client. Too many bodies. A huge lease on a downtown building. Mediocre creative, high level staff changes on the client side and everyone has heard the rumors that Dell is shopping around. A bold idea has gone bad. CEO Sir Martin Sorrell was going to have to do something with the increasingly heavy weight of Enfatico. WPP isn’t healthy enough (and really who is?) to redistribute the shop’s employees, which number around 800 people worldwide. Where are they going to go? As Sorrell recently wrote in The Financial Times: “Some have said that, intellectually, recessions are exciting or fun. That is callous nonsense. Telling someone who has lost their job or business that their troubles are merely part of a cycle will provide little comfort.” Oh how true. Maybe Marty-Mar should write everyone at Enfatico a little note, hmmm?

Meanwhile, WPP as a whole is struggling. JWT recently closed its Chicago shop. In the UK, Publicis beat out a team from WPP for Visa’s 2012 Olympic business. Y&R Chicago just lost the Miller Genuine Draft account to the New York office of Publicis Groupe’s Saatchi & Saatchi. And WPP’s Mindshare is defending the $250M Wrigley account any day now.

Tough times for WPP. Still, the company is pushing deeper into the Pakistani market. Does Sorrell have President Asif Ali Zardari in his pocket? Zardari is known as “Mr. 10% Percent” considering his alleged skill in the fields of bribery and money laundering. WPP isn’t alone though. Plenty of death star agencies are hoping that growing businesses in “developing countries” will defray some of the shock and awe happening in the US, as well as Europe. In WPP’s case, the balance sheet is a little shaky. Sure, WPP posted $13.6 billion in revenue for 2008, but that includes two months of revenue from TNS and it’s against a whole lot of debt.

In early March, the Sorrell told investors that: “I’d just like to say in the 25, 30 years that I’ve been in the business, I have never seen anything quite like this.” His long list of worries is surely growing and growing and growing.

More: Enfatico Fails On The Adamo Campaign

Enfatico Fails On The Adamo Campaign


We didn’t realize that Valerie Hausladen, managing director of communications agency Enfatico’s Austin office, was one of the employees who hit the employment line during the late February layoffs at the Dell oriented agency. At the time, Enfatico’s workforce was cut by 8 percent, roughly 80 to 100 people.

Folks around the web have been saying that the shop has six months to live. Hmm… There does seem to be a ton of terrible news coming out of Dell including the cancellation of their smartphone due to lack of interest from carriers. As well, Dell has warned staff at its UK operations that as many as 20 per cent of the work force is about to be eliminated.

Still, the company is moving forward with the release of their Apple competitor – the ultra thin laptop called the Adamo, and the associated creative, which Enfactio created over a year ago. The campaign shows the laptop as a high end fashion accessory. Um, you guys are missing the point. Apple gets all that love for more than just its stylish, highly designed product line. Their brand message goes way, way deeper. Trying to co-opt it isn’t such a hot idea. You ain’t got the character for it. As PC World noted: “This is a fine example of what a company that is not cool comes up with in an attempt to be cool. The video [an introduction to the Adamo] should be filed under “badly overreaches” and put away permanently.”

Enfatico has more than six months to live. They’re going to keep going till their heart stops, but heavens! They are a prime example of what happens when agencies don’t dig deep on the insights. Plus, not so sure that this the right jump off for a laptop considering the economy and all the financial worries consumers are facing. Is fashion the right thrust here? Maybe stylish AND durable would be better proposition? How about highlighting the warranty or the overall reliability of the computers? How about just being who you are? Dell has gotten way off track as of late in a desperate attempt to take Apple to the mat. Dell’s brand message – which used to be about functionality, ease and dependability – needs to make a comeback, hasta pronto.

More: WTF is Up At Enfatico?

Could Enfatico Really Be Gone in 6 Months?


Following up on Tuesday’s news that Enfatico underwent a round of layoffs that left 100 or so people without work, here’s what’s being said of the situation around the Web.

&#151 Brand Republic via George Parker: “My final forecast… Enfatico will be rolled into Grey or Y&R within six months… And the agency of the future will rapidly become the agency of the past.” Here’s their official piece.

&#151 Adweek via David Gianatasio and Eleftheria Parpis: They said nothing about the situation, just reported it.

&#151 AdAge via Rupal Parekh: “In a September sit-down interview with Ad Age, Mr. Boone said Enfatico had previously turned away some new-business opportunities, and estimated the agency would bring a new client onto its roster in six to nine months.”

&#151 B|Net via Jim Edwards: “Dell’s spending on SG&A has declined 12 percent over the last year. In Q3 it spent $1.6 billion. That was down from Q2 when it spent $1.8 billion. And that was down from Q1 when it spent $1.9 billion. It’s a pretty good bet that Dell’s Q4 earnings, out in a couple of days, will show another decline in the budget.”

&#151 Tribble Ad Agency via The Founder: “The reason Enfatico can be ‘called out’ is because it’s a single client ad agency, meaning just look at Dell’s financials to tell you what is going on at Enfatico. Numbers like this can (and normally are) hidden by other advertising agencies because they have other clients they can claim they are receiving funds from. Currently Enfatico has no such crutch. So what’s the answer?”

&#151 AdAged via GEO: “To the best of my knowledge, Enfatico has yet to produce a single ad for its only client, Dell. I’m sure that failure should not be borne by the people being schmised by the agency. I’m sure there are Enfatties at the ‘C-level’ shaking their heads, tsk-ing, destroying and expensing car-service to their country places.”

More:We Hear: Layoffs Have Begun at Enfatico

We Hear: Layoffs Have Begun at Enfatico


Update 2: (8% of staff will be cut from a stable of 800 globally – 64 people) From Enfatico’s blog, nextstoryboard &#151

“Today, we announced a proposal to restructure our team and decrease our workforce by approximately 8 percent. Persistent cost pressures require that we reorganize our operations to better align our business with what is happening in the global economy. These changes also put us in closer alignment with Dell’s new global structure and reduced marketing spend. We acknowledged these moves in an internal memo (see below to download) that we distributed today.

While the economic environment remains uncertain, we believe these proposed steps will strengthen our agency so that we can continue to deliver results for Dell and organize for future growth.”

Note: there are about 800 Enfatico employees globally. We’re working to find out how many are in Austin. If you know, e-mail or use the anon tips box.

Download file

1:09 pm &#151 8-10

Update: The layoffs are happening as we speak. What began as a slow drip is now being described as a “slaughter house” &#151 people go into the office and come out laid off. Here’s an interview with CEO Torrence Boone that DM News published yesterday. Above is the video that accompanied that interview.

Sources inside WPP agency Enfatico tell AgencySpy that at least three people have been let go from the Austin, Texas staff today. We’re awaiting word from the agency, but this news has been confirmed by multiple sources. We will update this story as we hear more.

More:Dell Loses Another Top Level Enfatico Supporter

WTF is Up At Enfatico?


Rumors have stirred recently that Enfatico is having trouble paying some freelancers and is under the gun from Dell, which has purportedly “had their lawyers serve Enfatico with breach-of-contract papers, for failing to deliver on anything they claimed they could do,” according to George Parker. Both matters may have snowballed beyond truth, AgencySpy has learned, though Enfatico’s future remains unclear.

Payroll Matters
Of the two issues Parker brings to the table (in a post called, “Is Enfatico Finally Fucked?“), the payroll part may be the simplest to unravel. AgencySpy has spoken with sources inside the agency who claim that five to 10 freelance employees went without pay for up to a month.

Enfatico rep. Matthew Hutchison‘s explanation of the matter; “The vast majority of our freelancers are paid either each week or every other week through our third-party agencies with which we contract. To put it in context, only a handful of freelancers have been affected, and we are and have been moving quickly to resolve the situation.”

Dellving In
As for claims that Dell aims to back out of the partnership, a source within the agency tells us that a company-wide e-mail was sent from newly minted Dell CMO Erin Nelson, which noted in no uncertain terms Dell’s commitment to the project.

Again, Hutchison: “Additionally, Dell has not served Enfatico with papers. And, in fact, Dell and Enfatico remain committed partners. Dell has reinforced its commitment and partnership to Enfatico and we’re already in close collaboration with the new leadership.”

Though both Enfatico and Dell could very easily be posturing here, it remains unclear how Enfatico will weather the recession. That said, a transition to full-time staff won’t be easy once Schematic returns to other projects. At this time, we’re told by internal sources that Schematic is handling the strategy while Enfatico’s freelancers produce.

Oh wait, the agency wants to say something about that. “Enfatico is driving all of the digital strategy for Dell worldwide under the leadership of our Chief Digital Officer David Shulman and Global Creative Director and US Director of Strategy Josh Sklar. Enfatico is working with a number of WPP partner agencies worldwide &#151 including Schematic here in the U.S. &#151 on regional execution.”

More:Hey Enfatico, How’s That “Getting Other Clients” Thing Going?

Hey Enfatico, How’s That “Getting Other Clients” Thing Going?


According to their Web site, still just Dell. Ouch.

More:Dell Loses Another Top Level Enfatico Supporter

Dell Loses Another Top Level Enfatico Supporter


The news this morning coming from Dell on this last day of 2008 is that president of global operations Mike Cannon is retiring and Chief Marketing Officer Mark Jarvis is also leaving the computer maker.

Jarvis was one of new agency Enfatico’s strongest top level supporters, along with recently departed Casey Jones.

Despite laying off some 9,000 workers over the last year, Dell is struggling to cut costs &#151 an effort that began with consolidating their advertising into Enfatico.

Sources inside Enfatico told AgencySpy they haven’t seen any hint of layoffs, probably because the understaffed agency doesn’t have the infrastructure to warrant cost cutting measures. Per our spy: it’s hectic inside Enfatico.


More:Breaking: Casey Jones No Longer with Dell, Says Rep

What do Enfatico and NASA Have in Common? Marketing!


Over on “The Next Storyboard“, also known as Enfatico’s unread blog, there’s a compelling post about waste in advertising. You know, how there’s a lot of it, (eh hem, CP+B and your meat perfume) and we should all be working hard to prevent it. Turns out, Enfatico’s anti-waste beliefs are shared by NASA &#151 and former Enfatico front-man Casey Jones.

Via Valerie Hausladen, managing director of Enfatico Austin, who wrote the post: “We combine advanced analytics designed to provide strategic insight &#151 just the type of targeting Casey mentions &#151 with a system built to deliver utmost efficiency i.e. insights into previously unmeasured consumer behavior, a global talent pool, and integrated marketing disciplines working in close collaboration so that we can efficiently develop multi-disciplinary campaigns for execution in markets around the world.”

She continues: “At Enfatico we’re using the same technology that NASA uses to fine tune our marketing communications programs…”

Glad to hear that. But we think it’s a bit hard to be wasteful when you haven’t created anything to begin with. Though, ruining the careers of countless industry folk, including those who were put out of work by the merger and those who will lose their jobs when WPP ices the thing (well, it’s a looming possibility at this point, isn’t it?) is in a sense, “wasteful.” It’s also excessive to drop mad cash on a 10 year lease when your contract only lasts three years and when the industry is on the cusp of a colossal fail.

Maybe they’re talking about a different kind of waste, but that’s what came to mind when we read the post. Back to an earlier point: meat cologne…really?

Dell Sinks Deeper Into The Slush Pile, Enfactico Brace Thyself


Dell is pushing for even more cuts from their budget. The computer maker has enacted a hiring freeze, is offering employees voluntary buyouts and asking workers to take one to five days off without pay. That’s not all. Freelancers are being cut, as is travel and there is a “reprioritizing” of projects and overall spending so says Dell spokesman David Frink to the WSJ.

A “reprioritizing” of projects and overall spending? Does that include Enfactico? Jess Blackburn from Dell Corporate Affairs told Agency Spy that:

“Nothing in what we’ve announced this week affects Enfatico and we won’t speculate on any possibilities that would.”

Good to know. However, we will happily speculate where Dell will not. How long before spending cuts start to effect Enfatico’s spending plans directly? One month or sixth? Until then, onward ho!

More: So, How’s Enfatico Handling WPP’s Hiring Freeze?

So, How’s Enfatico Handling WPP’s Hiring Freeze?


From the moment we heard about WPP’s hiring freeze, we wondered what would come of the little shop that could, Enfatico, down in Austin. The problem is pretty simple: how can you build an agency when hiring people isn’t allowed?

So contact Enfatico we did, and here’s what we found out. Per spokesperson:

“As you have noted, there is a WPP-mandated hiring freeze. Enfatico is working hand-in-hand with WPP to secure approval for critical hires and expects to announce in the coming weeks a few additions to our team.”

So, Enfatico is exempt, and still staffing up. But at this point, aren’t all their hires, “critical”? A recent report published in the Austin Business Journal indicates the agency has, “the bulk of hiring behind it”.

Per Gretchen Miller, svp pr:

“Given the recent economic events, WPP and many other companies are being judicious when it comes to bringing on new staff. Enfatico is still hiring for key positions as we continue to build our capabilities to serve Dell.”

Enfatico’s Dealing With a Lot These Days