While Canada wasn’t likely a huge factor in General Motors’ decision to award its global media assignment to Aegis Media’s Carat network this week following a five-month review, experts say the reverberations of the decision will be felt throughout the country’s media agency community.
The decision to award global planning and buying for the world’s third-largest advertiser – an account that has been valued at US$3 billion – to Carat likely had “less than nothing” to do with the work being done for the automotive giant in Canada, said one insider, speaking with Marketing on condition of anonymity. Global decisions are typically made on the basis of U.S., European and even emerging markets. “Canada often doesn’t get five minutes in your average global pitch,” said the insider.
However, speaking from New York on Thursday, Aegis Media Americas CEO Nigel Morris said Canadian executives, including newly appointed Aegis Media Canada president Annette Warring and Carat Montreal EVP Ody Giroux, were “very involved” in the pitch process, reflecting Canada’s position as what he called a “key market” for the assignment.
“Although you might say it’s small relative to the U.S., [Canada] is a really important market on the GM business,” he said. “It’s absolutely one of the priority markets.”
A critical factor in the win, said Morris, was that Carat shared the company’s vision about media and media integration. “We were inspired by their vision for their brands, a lot of which align with where we see the world going,” he said.
The GM win is the latest in a string of high-profile account wins for the company that include The Walt Disney Company, U.S. retailer Target and Beiersdorf (Nivea).
Calls to the Paris-based media agency research company RECMA weren’t returned by press time, but the GM win likely catapults Aegis into one of Canada’s top four media agencies by billings. The company now employs approximately 250 people across Canada, while billings have grown an estimated 70% over the past three years.
“It’s really something we’re very proud of,” said Warring, who was named Aegis Media Canada president on Thursday as part of a series of executive appointments within the company. “I think it really comes down to [the fact that] we have a very clear and concise vision of who we are, what we want to do and how we’re going to achieve that.”
Morris said the GM win will boost Carat’s head count “really significantly,” and the agency will be seeking new staff members with a strong background in strategy and digital. He declined to say when the team will be put in place, but said the agency is working quickly to fill positions. “Quality is more important than speed,” he said. “But we want to do it pretty quickly.”
GM global chief marketing officer Joel Ewanick said he expects media agency consolidation to bring a reduction in expenses of millions of dollars or more merely by reducing the number of marketing partners it works with around the world. Prior to the review, the company worked with 40 agencies worldwide, and more than 50 worked on Chevrolet worldwide.
Such changes, though, tend to be bad for Canadian clients, said the industry executive, since they often tend to have little authority or sway over the decision. What’s more, the winning agency has often been forced by their parent company to accept onerous cost efficiency commitments on which they are unable to deliver.
“We’re part of a very large organization and this is a global review that was undertaken to give us better efficiencies and capabilities across the globe, and that was the undertaking,” said Faye Roberts, communications director for GM Canada in Oshawa, Ont. “It’s a global decision based on what was best for the overall company.”
While executives at longtime GM agency M2 Universal may take some solace in the fact that the global decision was likely not reflective of the work being done for the automaker here in Canada, an account loss of this magnitude is still “devastating,” said the insider. Cossette had also been handling some GM media business.
“We very much appreciate and recognize [M2’s] significant contribution in this area,” said Roberts, noting that the media services firm’s creative sibling, MacLaren McCann, will still be working on other GM brands. “We will continue to partner with MacLaren McCann on areas of the business which are considered outside the media review and the ongoing creative review. [GM’s Chevrolet assignment is currently under global review.] We’re going to have continued collaboration with them under those existing relationships.”
Carat’s acquisition of the GM business is expected to create a huge ripple effect through the industry as Carat seeks to build a team that could number as many as 30 people (although some positions will likely be filled by current Carat staffers). “My understanding is there is already a shortage of planners in the industry, so it puts pressure on other media agencies to protect their best people,” said the insider.
Meanwhile, in the wake of this week’s announcement, Carat parent Aegis Media Canada announced a series of executive appointments that included the promotion of Warring to president, now responsible for digital offerings such as Isobar in addition to media brands including Carat, Vizeum and Aegis Deep Blue.
The company has also hired former MediaCom Canada chief interactive officer Chris Thompson as chief client officer, responsible for providing key clients in English Canada with “best in class” service and solutions. Elsewhere, Sasha Grujicic takes on an expanded role as EVP group head of strategy, responsible for building a “centre of strategic excellence” around insight and digital marketing.
