AT&T Inc. will begin next week to extinguish the brand of cellphone operator Cingular, built up with billions of dollars over a few years, to imprint its more-than-century-old name firmly across its services.
AT&T (Charts), which took full control of No. 1 U.S. mobile carrier Cingular with its $86 billion purchase of BellSouth Corp. last month, will launch a campaign Monday to mark the change.
"We did not enter that decision lightly," Wendy Clark, vice president of advertising at AT&T, said in an interview. "We came to understand that consumer customers and business customers alike are looking for a single provider. We heard it so consistently across the marketplace."
In its first stage, Cingular will share its orange logo of a bouncing jack with the AT&T globe logo on everything from television ads to sales uniforms and monthly bills.
AT&T's name and logo will eventually replace Cingular in a process expected to take several months, with the exact timing determined as more customer feedback comes in, Clark said.
But with its long and complicated history, AT&T may face customer confusion over its name, marketing experts said. Also, Cingular built up a reputation among younger customers who may not easily associate with the AT&T brand.
At stake are AT&T's efforts to promote its bundle of phone, Internet and video services against a growing number of rivals, including cable operators and Web providers, such as Comcast (Charts) and Time Warner (Charts), parent company of CNNMoney.com.
One new ad will portray a familiar Cingular image - grain harvesters mowing a field to represent "bars" showing maximum cellphone reception. But in a new take, the harvesters will change direction and mow the AT&T globe out of the stalks.
"It's a tough proposition," said Hayes Roth, chief marketing officer at brand agency Landor Associates. "Multiple brands within any company is expensive. Arguably they don't have much choice, they've made a stand now that they've invested back in the core brand."
Cingular spent nearly $1 billion on media advertising in the first nine months of 2006, up from about $920 million in the same period during 2005, according to the latest data from tracking firm TNS Media Intelligence.
For the remainder of their businesses, AT&T spent nearly $600 million on media ads in the nine-month period, while BellSouth spent just over $100 million, TNS said.
AT&T has said about 20 percent of operating cost savings in the BellSouth merger will come from lower advertising costs.
The new AT&T was formed in the merger of SBC Communications and AT&T Corp. in late 2005. Adding to the mix, in late 2004 Cingular bought AT&T Wireless, eradicating that brand because of its poor reputation among customers.
"The good news is there is a difference between AT&T and AT&T Wireless," Clark said. "We have benefited significantly ... by having 12 months under our belt as the new AT&T."
AT&T ad agencies include Omnicom Group's GSD&M and BBDO.