AT&T's proposed $67 billion acquisition of BellSouth has short- and long-term repercussions for ad spending in the telecom category (now the fourth-largest in the U.S. at nearly $6 billion), writes AdAge. In the short term, Cingular Wireless would likely be renamed AT&T Wireless, and the merged company would have to rebrand in BellSouth markets. SBC, which acquired AT&T and then assumed that venerable brand, is in the midst of a $1 billion rebranding campaign and will now be merging three brands into one.
However, in the long term, spending may decline. AT&T and BellSouth spend about $3 billion combined on advertising, and AT&T now expects reduced ad expenses to be a major source of savings. AT&T's agencies include Omnicom's GSD&M, Austin, and independent Rogers Townsend, St. Louis. BellSouth's agency is WPP Group's Grey Worldwide, Atlanta.
Newspapers would likely be the biggest losers, along with network and spot TV. Also, analysts the Yellow Pages business to be shaken up: AT&T and BellSouth control $6 billion of the $15 billion spent last year on Yellow Pages advertising; they recently purchased yellowpages.com for $100 million and will likely move from paper to online.
