Enfatico’s true cost to WPP : $4 Billion
March 30, 2010
On breaking news that the Dell Account has transferred successfully from Enfatico to Y&R failed the mention one tidbit of information. The $1.5 Billion dollar advertising budget per year (it was a 3 year $4.5 billion dollar budget), magically shrank to $185 million, or better said they are WELL over a billion short per year of what they would have been spending should had Enfatico and WPP done their job (minus recession factors).
They hardly reached the .5 of the $4.5 billion dollar budget.
This is actually the primary story of the headline, but it’s not being discussed for obvious reasons.
The story is developing, but it’s a $4 billion dollar smaller story.
Enfatico’s new HQ … it’s down the road from pets.com
Did WPP and Dell spend a quarter billion on Enfatico?
February 21, 2010
Is there a way to get the actual amount spent on this disaster?
Between Dell and WPP , what literally was allocated to this project, the 10 year leases, the 1000 apple computers bought for Dell, the estimated 600 people on payroll …. etc etc…
Dell said that they would allocate $4.5 billion to the project… but the chances are remote that they got anywhere near that…
That being stated they DID hire hundreds of people, took out roughly a dozen leases, bought nearly a 1000 apple machines… etc etc… they spent money.. big money..
Dell doesn’t line item “Money wasted in Advertising” on their balance sheet… so I guess I need to make a spreadsheet and add it up with estimates..we’re going to do this with really rough numbers because WPP and Dell both refuted our requests for hard numbers due to the embarrassing nature of the question.
But I am guessing it went into at least $150,000,000 to $300,000,000 million range.
The 100,000 Sf office in Manhattan alone would be millions.
My guess is they hired at least 600 people when all the press releases are added up.. if the average salary is $40,000 (when you factor in Boon’s salary with the staffers making $10 bucks an hour)…
So 600 x 40,000 = $24,000,000
Add the customary 30% for payroll taxes, health insurance etc etc…
You got an additional $7,200,000
So you’re looking at roughly $30,000,000 a year for 3 years…
That’s $90,000,000 in payroll alone.
A dozen office spaces at 100,000 a month…
That comes out to be $14,400,000 (12 x 100,000 x 12 months)
So now we’re on or about $105,000,000 (roughly)
Let’s add it an additional 2 million for apple machines, apple software, copies of photoshop, digital cameras, photo equipment, ect etc.
Now you’re getting close to the 110,000,000 mark…
3 years…. of this mess…
How much do desks, phone systems and chairs cost? They didn’t buy that stuff at the thrift store…
I would say between $150,000,000 and $300,000,000 was blown on this project.. that produced one ad in India worth about $2,000 bucks with a small advertising agency.
How many people’s job could be saved with $300,000,000. What new products would Dell have launched with an additional $300,000,000 in the bank?
Yes it’s known that the Enfatico disaster happened.. but did anyone actually look at how much this hurt everyone.. the lost potential income from new products, the mess in terms of lack of advertising. This was a disaster that will have repercussions for the next decade or longer at minimum with the landlord of the buildings that Enfatico signed a 10 year lease with.
So here’s the challenge WPP and Dell .. tell us exactly what the shareholders lost on this?
Dell Ad Agency Enfatico Blog Shut Down
January 20, 2010
The all famous Enfatico Blog, Next Story Board has been shut down. Now everyone that visits the site will be redirected to their main page… the blog has vanished. A call into Enfatico to find out what happened was met with a number being disconnected… ouch.
To make matters worse.. they didn’t even properly redirect it.. it’s just a domain alias rather than a 301 redirect.
I don’t understand this, not at all. Out of all their marketing efforts to promote themselves, the cheapest, lowest cost, highest ROI way was via their blog. Sir Martin should have kept that site up. A hosting account costs 5 dollars a month… many webhosting companies give away domain names for free with a year’s purchase.
The total advertising campaign for you to save face … perhaps even fish for business would be a total of 60 dollars a year.
Have an intern to post on the blog… not just redirect the thing in complete failure. You know you could have kept the appearance of an active company running (we know you are all about appearances) by having some intern post on it daily. Hell you might of been able to sucker some company into allowing you to pitch.
Or most likely, you could have better explained to everyone what is going on, rather than making us think the worst happened… or did the worst happen?
Wow that was poorly executed. No wonder the Dell contract with WPP Group plc expires in 314 days, 13 hours, 21 minutes, 55 seconds .. yet the agency has no blog (and no CEO, and no creatives, just a bunch of empty offices) who the hell is paying for all those office spaces thoughout the planet? What nearly 2 dozen locations, the Manhattan Office with 100,000 S/f (I told you idiots that was a bad idea)?
Is Dell or WPP group plc paying for it? What a waste of resources… In rent alone you could have saved hundreds of jobs… as you got multiple WPP group plc offices, all 25% filled or 0% filled within blocks of each other…
Just freaking stop calling them differing names… that whole model is freaking broken… make WPP just an ad agency.. consolidate all the expenses… put everyone that works at a WPP group plc agency in one building in New York… and duplicate that in Philly, London, and everything else…
I swear by just looking at a spread sheet you can see the amount of people you fired that didn’t need to be if you just used your fixed assets more effectively.
Then you get shit like this where Enfatico going down like the Titanic makes your whole holding company look like a second rate crappy holding company that can’t even keep a client. Honestly I would think twice about doing anything with WPP … after seeing what happened with WPP and Dell.
What do I know? I’m just an idiot with a blog… but clearly that is more than what WPP Group owned Enfatico has right now.
RIP Next Story Board, your entire life of 451 days was well honoured… well not really..
Enfatico firing everyone
October 1, 2009
Agency Spy is reporting that there is a steady stream of pink slips flowing from Enfatico right now as this is being typed.
Just last week we were told that Enfatico was going to fire everyone in a parody video.. Interesting how much parody videos mirror real life. Regardless, the word on the street is that Enfatico is virtually shut down, with just a few support staff working under the Y&R label.
Honestly, if WPP group plc followed that route, and just hired within their existing agencies such as Y&R a support staff to help out with the workload from Dell, they would not be in the mess they are in now.
Did Dell give WPP group plc 90 day notice?
April 23, 2009
Has Dell Inc. given WPP group plc owned Advertising Agency Enfatico / Y&R 90 days to “turn the boat around” or risk losing the $4.5 billion dollar account?
Speculation has been floating for months now that Dell has been looking at cutting their losses with WPP, but today a published report has surfaced written by Matt at Agency Spy that Dell has given Enfatico and Wpp Group plc 90 days notice… or better said the CEO of Y&R all of a sudden has come up with a definite timeframe to fix the problems…. where did he get that timeframe?
The account is so massive in size that it’s expected to put a serious dent in WPP’s financials if Dell does jump ship… and from the reports we are reading Dell has already started strapping on life preservers with other non-WPP owned Ad Agencies.
Superspy @ Media Bistro Defends Enfatico
April 14, 2009
“AdAge is wrongly assigning blame to Enfactico and yes, I’m defending them” was written by SuperSpy… yes.. the famous SuperSpy at MediaBistro!
This deserves an article by itself, mostly because SuperSpy is one of my favorite bloggers and I do consider her one of my friends, but honestly for as well versed and smart she is, she is really wrong on this one. She is lambasting the adage article written by Rupal Parekh that we cited in our article
Here are the two major tidbits on her story:
1. Agencies very, very rarely get to just go ahead and purchase URLs for clients who generally, demand all sorts of approvals before anything is ever done. We don’t have carte blanche like AdAge is implying. It’s possible that Dell stalled on Enfactico’s request and/or just decided not to purchase it. Anyone who has worked in an agency knows this is very possible. AdAge is wrongly assigning blame to Enfactico and yes, I’m defending them. I can’t believe it either, but right is right and this assumption is wrong.
The red tape problem you mentioned with this could have been settled easily with a phone call or an e-mail to Dell for approval. Afterall Dell has no problem spending 4.5 billion for advertising for 3 years, and they have a long history of buying domain names for their products.
Clearly http://www.inspiron.com goes to Dell … so why wouldn’t their other trademarked products. Such as the ADAMO covered by Trademark number:
77518661
and
77542633
Feel free to look them up at the US Patent and Trademark office There is no legal concern here, also worth noting that someone was already sitting on the domain… that had no legal right to it in the first place, Dell / Enfatico could have easily used the WIPO procedure hold up their already owned trademark and recieved the domain name using the legal framework that punishes cybersquaters and awards the trademark holder.
That being stated, I am now completely at a loss regarding how BDA’s appear to work, because we do everything in our power to help the client, including buying a domain name for them, making them the legal owner of it and just making us the technical contact. This is a no-brainer if the client already has the trademark.
Now for the worst part of this:
YOU MEAN TO TELL ME THAT THE DOMAIN NAME AND WEBSITE HAVEN’T BEEN DISCUSSED FOR THE PAST 2 YEARS WHILE THE PRODUCT WAS BEING DEVELOPED?
This is mind baffling, Enfatico hasn’t spoken to Dell about that domain name for the past 2 years while the product was getting ramped up for launch? WTF was going on?
Generally, we are looking at domain names even before looking at Trademarks, what’s the sense of owning a trademark if you can’t even brand it properly with a corresponding domain name?
This is not rocket science, this is good business.
Now for part 2 of the article:
2. The brand isn’t actually called Adamo. It’s called Adamo by Dell, so why would they even be interested in Adamo? Often, brands purchase similar URLS for their product and have it redirect users to the main client site. We all know this, as well. Dell already owns Adamobydell.com. What it sounds like is that the company was unsure as whether to fork over $750 for a like-minded URL.
Inspiron by Dell seems to go to http://www.inspiron.com … Next time I will try go go to “Wii by Nintendo” … but that seems to go to Wii.com ..
This is 101 in online Advertising, you make it as easy as possible for your potential clients to find you, that means using the common “street name” and “plain speak” of the products you sell if not offending…
oh.. and there was a third part of the article I wanted to address:
There. Case closed.
Not. Even close.
In closing, this is a clear lack of understand of Digital advertising, it’s why SEO and SMO firms are growing at the expense of BDA’s … because it doesn’t get any plainer than this, they have no clue what they are doing.
Enfatico is run by idiots
April 13, 2009
Rupal Parekh at Adage really dug up the dirt on Enfatico! I had to quote the entire article, because it was so perfectly written that there is no other way to rephrase it, or add to it.
“Either Madison Avenue still has a ways to go when it comes to embracing Silicon Valley, or Enfatico’s problems are bigger than we thought. According to reports this weekend, the Dell agency refused to pony up $750 a month to lease Adamo.com — the most obvious domain for Dell’s new ultrathin laptop computer, launched recently to rival Apple’s MacBook Air. Luckily for consumers, that decision didn’t stick once Dell founder and CEO Michael Dell caught wind of the situation; the domain was eventually bought”
Did you guys read that? Michael Dell had to buy the domain name himself. What did he pay $4.5 billion dollars for when he has to go out and purchase domain names himself because of the gross incompetence of his advertising agency.
Rupal I have to say, it’s not just Enfatico, it is Madison Avenue altogether. W+K lost a nearly $2 billion dollar account for lack of SEO.. and yet still has not developed the internal skillset to do it.
What gets worse is that these holding companies and large ad agencies charge the clients for this service, yet do not have the technical skillset to implement it.
Embarrassed WPP? You need to totally revamp your business if you expect to stay in business, start off by trying to buy SEO and Social Media firms… and good luck with it… they don’t think like you do Sir Martin, and hence why you can’t see the value in it.
We hope that a potential loss of a $4.5 billion dollar account is a good shot across the bow.
Enfatico Shuts Down
April 10, 2009
WPP group plc is shutting down Enfatico, the advertising agency for Dell and sending what remains of it to Young & Rubicam.
Enfatico has been slammed from day one for it’s one client business model, cost overruns, lack of production and to make matters worse, last week the ad agency lost any potential of landing another client as Vonage selected another firm for it’s advertising.
Leaving Enfatico as a one trick pony.. more exactly.. as nothing.. as it’s closing down.
Exactly what we have been saying since it’s inception. Hell we even built an Enfatico Countdown clock… The clock is now updated with what will most likely be it’s last update.
* 496 days, 8 hours, 5 minutes, 56 seconds into the contract……Enfatico Shuts Down with 599 days, 15 hours, 54 minutes, 4 seconds left in the contract…
What is unclear is what happens to the 10 year leases and if WPP group plc / Enfatico will default on 100,000 sq foot Manhattan office spaces.
There was nearly 1000 people working there, it’s widely expected that most of them will be sent to the unemployment line in short order.
Sir Martin, you really made a mess of things.
Enfatico : We’re hurting like everyone else
February 26, 2009
Like every other company worldwide, the economic downturn has had an impact on our business and that of our client partner Dell. Despite our realignment, we believe in our business model, based on efficiency, integration and analytics. Our strategy puts us in a stronger position to maximize resources, eliminate duplication, deliver results and drive us through these tough financial times.
Beth@enfatico
That message was left on Brand Republic in response to George Parker’s post.
Sure they are hurting, so is everyone.. agreed. The problem is that we disagree with you regarding the maximizing of resources, eliminate duplication, and delivering results.
See here’s the problem, the entire concept of a “one client” ad agency such as Enfatico is the definition of duplication. Do you really need to pay another CEO when there are dozens in WPP’s network? Do you need a new media buying department when WPP group plc has dozens throughout their network? Do you need to rent out additional office space on 10 year leases when every other desk is empty across the network of WPP’s shops after mass layoffs?
What I am trying to state is that Enfatico is not maximizing resources or eliminating duplication… not by a long shot… in fact the vary nature of it’s existence is duplication and inefficient allocation of resources.
In terms of delivering results… exactly what does that mean? It took Enfatico nearly a year to push out anything even resembling an ad.
Please clarify your statement? Because honestly we are highly confused at it. The actions don’t match up with the words stated… in fact they run in the face of what was stated.
We’re not trying to “hammer” Enfatico.. in fact I have some deep corner of respect for the fact that the advertising agency has been publicly flogged across dozens of news outlets… print media.. blogs.. ect ect.. and yet you guys keep working on fixing your name.
But to state that Enfatico is about delivering results to the client… without duplication.. when the entire agency is a duplication of existing resources is that part that we can’t let go.
Enfatico has only 6 months left ?
February 26, 2009
George Parker noted on Brand Republic that Enfatico has only 6 months left before it collpases and is forced to roll into Y&R or another WPP shop. “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.”
Media Bistro put together a piece that outlined many thoughts across the related news outlets (including tribble).
We however feel it has more than 6 months, yes there is a deadline to it… but it’s not 6 months… it’s exactly 642 days, 9 hours, 20 minutes, 26 seconds. … as official record keeper for Enfatico.. we have to point out that the contract was for 3 years…
Both Dell and WPP group plc are not going to break contract and admit failure like that. They will continue down this road… abit at a MUCH reduced spending rate until the contract is fulfilled then say “the market conditions have changed as to demand a new advertising model”.
That is how they are going to admit the failure of Enfatico… not by busting it up in 6 months and stating to the planet that Dell and WPP are clueless and have no idea what to do with their advertising budget.
They will fulfill their contract…at a fraction of what the budget was initially .. to save face… and nothing more.
You can’t make a big splash like they did when they announced this.. just to backtrack and say they made a stupid decision that cost hundreds of jobs… thousands of jobs if you consider the lost opportunity cost. Remember the mentality of these people… “we don’t make mistakes… everything is planned…budgeted and accounted for… we are in control”.
They were in control… and look where it got them.
I give it 642 days, 9 hours, 20 minutes, 26 seconds…. and not one second more.
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