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..
Parker on WPP Group : The final sad, pathetic end of Enfatico
January 11, 2010
George Parker is reporting the following:
This just in from Austin… The “Agency of the Future” has fired all the creative directors, they have taken ninety nine percent of the content out of the website (it’s just a list of offices now.) Torrence Boone is toast after they promoted him to CHAIRMAN, in charge of “special projects.” That lasted all of one month, and then they just bounced him out altogether. Gone. Fucking gone! And no one has a clue where he went.
Talk about game over, this is a complete disaster for WPP group plc. Not that the world didn’t see this coming for years. We even built a countdown clock (that we felt no need to update since Enfatico has been for the most part shut down for some time now)… but part of the new news is that Torrence Boone has been escorted out… and no one knows where he has gone… pretty shocking stuff. What is he up to these days?
See the problem is we can’t blame Torrence, he was given an impossible mission. You can’t build an ad agency like this, not the way Enfatico was built.
A robust advertising agency needs more than just one client, you need to have some sort of cross between industries, some things that work well in one industry might make sense if adapted to another. You need fresh ideas.
Enfatico had no ideas, it was a one trick pony that never actually even got off the ground. For the record, this last paragraph of the report most likely has more weight to it than anything else.
If I was a WPP shareholder I’d have some pretty hard questions for Sorrell before he picks up his $96 million performance bonus!
I felt that over here.
Ad Agency Mother NY ‘buys whole New York Highrise’
December 1, 2009
Advertising agency Mother New York, is taking an entire building—naming rights and all—for its own. The Observer is reporting that the Ad Agency is moving into this building located at 595 11th Avenue New York, New York.
This is in stark contrast to the other ad agencies that are going virtual. Now this is what we were told… and we cannot verify yet… the reason for this move is due to the “expected increase of business from Dell” … woah… We thought Enfatico and Y&R were agency of record… where did that come from …
Regardless the “rumor” from a somewhat reliable source has stated to Tribble Ad Agency that Mother is doing this in expectation of more business from Dell.
Enjoy the madness… because this has the potential to go bad if things don’t go as expected.. taking on more expenses if there is a double dip recession could mean really bad things. Or hell.. they just might need the room.. .clearly Enfatico doesn’t.
We look forward to the Mother NY sign that is going on that thing, we hear it’s going to be huge… facing the Ogilvy side of course…
Makes one wonder… what do they have against WPP Group plc and Sir Martin? Stealing Dell from Enfatico.. setting up shop next to Ogilvy …
Publicis Groupe finalizes Razorfish from Microsoft
October 19, 2009
This one goes in the history books, the deal is final as of today (we’ve known about the purchase for months) but finally today Advertising Agency holding company Publicis Groupe acquires “digital” Razorfish from Microsoft
The deal has finally given Publicis some sort of digital outlet, abit a fairly weak one in terms of Social Media and SEO. It’s also been criticized that the transaction valued at approximately $530 million was way overpriced for what Publicis is actually getting, as the barriers to entry are low… really low.
Enjoy the mess…. this has a good chance of looking like Enfatico.
Enfatico loses Advertising Agency of Record Status with Dell
October 5, 2009
The WPP group plc advertising agency, Enfatico has lost it’s agency of record status with Dell Inc. Evidently this has been a fact for nearly 2 months, but WPP group plc swept this fact from the public in an attempt to save face from what we understand, or perhaps better said, never publicized the bombshell.
George Parker wrote the following “Officially (although there have been no releases to the press that I have seen,) Y&R New York is the agency of record for the consumer work. Wunderman, New York, is handling the B2B work”
Well of course there has been no press release, what are they going to release?
Title : “Enfatico complete failure”
Subtitle : “Enfatico, epic fails , never finished countdown clock”
Body: “Only in the minds of Sir Martin and Michael Dell did this make sense…. etc etc”
The entire concept was lamblasted by the media, bloggers and everyone else in between because of the poor business model and of course other reasons.
Our hearts do go out to the employees there, honestly this isn’t their fault… the entire project was designed to fail.
Parker: Ken Segall now available for bar mitzvahs
October 3, 2009
It’s official… Ken Segall is no longer Global Creative Director of Enfatico, and to make this even more of a circus, George Parker stated that he is now “available for bar mitzvahs” basically saying he is completely unemployed from the WPP group plc owned advertising agency.
Now we don’t like the idea of anyone being sent packing, in fact this is downright awful what is happening, just under 1000 people have received their walking papers due to the Enfatico disaster. Everyone knew this was going to happen, we even setup an Enfatico countdown clock the night the contract was signed… it’s not “news” as per say, but it is news to see the heads of Enfatico get pink slips. Generally they are the last people to get pink slips, and in this case it appears the chances are they ARE the last people… literally.
Now some will try to paint this in the history books as a “bold idea before it’s time” .. or some other flattering term. But that isn’t what Enfatico was, it was a disaster of epic proportions. It was a complete waste of resources but to only 2 people, Michael Dell and Sir Martin Sorrell where in their heads they felt it was a successful model, despite the evidence contrary.
What Sir Martin and Michael didn’t understand, and most likely won’t ever understand there was a flaw in the business model that was clearly apparent before the ink dried. Creative individuals will never be happy being creative with just a single company product line.
If your creative, you want to try new things, you want to explore new venues, you want to take on new types of clients.. you want to expand, but with Enfatico there was no place to expand. You can either promote only a handful of Dell’s Notebooks, desktops and servers. Doesn’t sound too creative to anyone.
This severely limited their talent pool in terms of the creative side.
Then there was the overriding factor, this one didn’t just apply to the creative individuals, this applied to EVERYONE. The single client ad agency had a contract had a time limit of about 1000 days. Meaning that by the time you actually started working there, the best you could hope for is a renewal of the contract.. the worst you could hope for is what happened. All the employees at Enfatico were held by the throat by Michael Dell.
You can’t raise a family on that.
At least with a normal advertising agency if one client goes the chances are the agency doesn’t go with it. Perhaps layoffs, but generally speaking if you were a star, you would be re-tasked to another project. With Enfatico you had no such option.
In other words if Michael Dell woke up on the wrong side of the bed that morning, you were screwed out of your mortgage, car payments and career.
The first problem people might be able to swallow, but the second… no future with the agency of the future… that is just too much for anyone that can see further than their nose.
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.
Dell planned to spend more on Enfatico than Perot Systems
September 21, 2009
News today that Dell has purchased Perot Systems has many shaking their heads, as the purchase price of $3.9 billion is considerably less than what they planned to spend with WPP group plc / Enfatico . From their initial release, of 4.5 billion planned to be forked over to WPP group to the now petty purchase of Perot Systems… my how things have changed.
Enfatico turned out to be a complete failure, ending with a parody video of the event when Sir Martin blamed bloggers and media outlets for their failure.
Think about it, Dell inc was willing to spend more money on an advertising gamble with a startup then they were willing to on actually developing products. Pretty amazing stuff to watch how corporate suits work.
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