WPP lands $4.5bn deal to revitalise Dell's image

WPP has secured one of the biggest advertising contracts of the year after Dell selected the UK company to run a new operation that will be set up to handle the computer manufacturer's global advertising and marketing operations.

Dell is looking to refresh its brand by moving away from its image as a provider of cheap, entry-level computers as part of a wider strategy to revive its prospects. The company has lost its number one position in the computer market to Hewlett-Packard, while Apple has revived its image on the back of a series of stylish products such as the iPod and iBook.

WPP has underperformed its rivals in winning new business this year, but has come up trumps after winning the giant Dell account. It saw off competition from Interpublic Group over a seven-month bid process to secure themega-deal.

Dell said the deal was worth $4.5bn (2.2bn) in agency billings over the next three years, with analysts estimating that the contract could be worth up to $100m in revenue a year to WPP.

The new agency will be established over the next six months, and will employ around 1,000 people. Working under the codename Project Da Vinci, the new entity will take on Dell's entire global advertising and marketing operation, a business that was previously split between 800 separate agencies.

The decision to overhaul its marketing operation was made by Mark Jarvis, the former chief marketing officer of Oracle who joined Texas-based Dell in April. Mr Jarvis has argued that Dell needs to change the perception of the company from being branded as "the cheap computer company" to that of having a "cool" brand. His first move was to scrap the company's ineffective "Purely You" adverts in favour of a more colourful and edgy marketing campaign that kicked off over the summer under the tagline "Yours is Here".

Project Da Vinci's first job will be to promote Dell's move into large retailers. The company has traditionally only sold its products directly over the phone or via the internet, but has recently backtracked on that policy to sign dealswith major retailers such as Walmart.

Casey Jones, vice-president of global marketing for Dell, said: "Instead of dating 800 agencies, we are creating a partnership with one firm. We want our partners to spend 100 per cent of their time thinking about our customers, rather than how they will get the next assignment ... a partner is someone that works with you, not for you." Mr Jones added: "One great team at WPP to match up with our team, so we can create magic together."

The important contract win should support WPP's share price, which has underperformed the London market over the past six months on concerns that an economic slowdown could hurt the advertising giant's prospects.