Four of the world’s largest ad agency holding companies have been invited to pitch for General Motor‘s Chevrolet global creative account.
The automaker has approached Omnicom Group, Interpublic Group of Cos., Publicis Groupe and Cheil Worldwide.
The move comes on the heels of GM launching a $3 billion media agency review, and suggests that the company is once again seeking ways to slash its marketing costs.
Despite economic conditions that in the past couple of years have hampered auto sales, moving cars off the lots doesn’t appear to be a problem for Chevrolet right now. Chevrolet announced today it has sold 3.6 million vehicles globally since Jan. 1, and 1.2 million in the third quarter, which it said marked the best results in the brand’s history. It specifically touted sales of the Cruze, which it said were “fueled by U.S. and China sales growth.” It expects to hit 1 million Cruzes sold this month.
“While preliminary, this is another significant step in our efforts to more effectively engage consumers, and drive efficiencies in our marketing operations on a global scale,” said Joel Ewanick, global CMO of General Motors, in a company statement late Thursday. According to the company statement, “GM will evaluate the proposals and determine the best course for moving forward, which may be to maintain or adjust its current agency footprint.”
GM spokesman Tom Henderson via phone stressed to Ad Age that the move is about the automaker being more efficient and effective in its business around the world: “We’re looking at the entire scope of work done globally. We believe we can be much more effective by getting more efficient. It’s possible we could stay with our current model. We believe efficiencies will drive better effectiveness.” He declined to comment on what the review might mean for Omnicom Group’s Goodby, Silverstein & Partners, the lead creative agency for the Chevy brand in the U.S.
But Jeff Goodby, co-founder at the agency, said he doesn’t expect it to affect the agency much. “I had known about this, and it’s not a surprise,” he told Ad Age in reaction to the announcement. “I don’t expect it to change our relationship, but we are just all trying to solve a global alignment problem. The United States only constitutes about 40% of the account, and it’s a complicated account – even more complicated globally. There has to be a way to align us on working on it. I really expect that we’ll continue to be involved.”
The notion that the company wouldn’t remain involved is a hard-to-imagine one, considering GM’s marketing boss, Ewanick, is good friends with Goodby, and as soon as he moved to GM from his previous marketing post at Hyundai, he brought aboard the Omnicom shop. At the same time, it means yet another hurdle on the account for the agency, which this summer was at the center of a controversy over the quality of its Chevy advertising so far. Ewanick said he wants more consistency from the agency, and that it hadn’t delivered “A” work all of the time.
Today GM works with a variety of agencies on a global basis, but its partner in many of its biggest global markets is Interpublic Group of Cos.’ McCann, which works on Chevy in India, all of Latin America and in Canada (where MacLaren McCann just began Chevy’s largest vehicle launch campaign in its Canadian history).
McCann will surely fight for a bigger piece of the pie as part of the review, as will Publicis, whose agencies Leo Burnett and Fallon do work on the GMC Truck and Cadillac brands, respectively. Cheil Worldwide – which is a much smaller player than the other companies and is also part owned by Samsung – is a bit of a dark horse in the race.
Chevrolet is by far GM’s biggest brand, accounting for 51% of GM’s worldwide vehicle deliveries in 2010. GM markets Chevrolet in more than 140 countries.
GM does not disclose worldwide ad spending for Chevrolet. However, the company disclosed GM 2010 worldwide ad spending of $4.3 billion, accounting for the bulk of the $5.1 billion that GM said it spent in 2010 on worldwide advertising and sales promotion.
General Motors North America accounted for $3.4 billion of that $5.1 billion, according to GM’s 10-K filing. GM Europe accounted for $800 million; GM International Operations (including Asia-Pacific, Russia, Eastern Europe, Africa and Middle East), $600 million; GM South America, $300 million.
Chevrolet’s three largest markets in unit sales in 2010 were the U.S., Brazil and China. The U.S. accounted for about 37% of worldwide Chevrolet unit sales in 2010.
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