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Dell CEO Michael Dell delivers a keynote address at the 2007 Oracle Open World conference on Nov. 14, 2007 in San Francisco - 


KAI RYSSDAL: When we woke up this morning Dell was a computer company. By the time the markets went to bed tonight Dell had become an advertising powerhouse. The company says it's going to create its own ad agency. It's going to hire 1,000 people and spend $4.5 billion to do it.

Marketplace's Lisa Napoli has more.

LISA NAPOLI: Dell says it'll launch its own agency in conjunction with the international ad giant WPP.

KEN WILBUR: They're leveraging their size to get what they want.

That's Advertising professor Ken Wilbur of the University of Southern California. He says what Dell wants is to have all the traditional functions of an ad agency under one roof, from the creative side to the placement of those ads in different media. Before now, Dell was working with over 800 marketing firms to sell its computers.

SETH GODIN: More and more large advertisers are demanding that their agencies consolidate these different functions to make sure that the same message is going out to consumers through many different touch points.

Marketing guru Seth Godin says in the age of the Internet it takes more than clever slogans and jingles to sell a product. Marketers want to know where their messages are going and when.

GODIN: Proctor and Gamble runs an ad for Tide. They don't know if it works or not, but when Dell runs an ad with a phone number in it, they know within an hour whether it worked or not.

Godin says the faltering Dell has another challenge: overcoming a battery recall, management woes and a raft of bad publicity from unhappy customers.

GODIN: Dell doesn't need better advertising. They need better products. The only place to invent profit is with design and style, and they'd better start.

Godin says being a bit more Apple-esque might help Dell reclaim from HP its status as the number one seller of computers.

In Los Angeles, I'm Lisa Napoli for Marketplace.