General Motors Co. (GM), the largest U.S. automaker, is shaking up its advertising agencies just a year after a joint venture was created for its Chevrolet brand, according to two people familiar with the efforts.
The automaker, based in Detroit, is working to shift the bulk of Chevrolet’s advertising business to Interpublic Group of Cos. Inc.’s McCann Erickson Worldwide, said the people, who asked not to be identified because the changes aren’t final. The work has been handled by a joint venture between McCann and Omnicom Group Inc. (OMC)’s Goodby, Silverstein & Partners.
The changes, along with a January announcement to replace the brand’s Chevy Runs Deep tagline with Find New Roads, essentially undo former Chief Marketing Officer Joel Ewanick’s 27-month reign at GM. The company ousted Ewanick in late July over the cost of a sponsorship deal with the Manchester United football team, people familiar with the move said at the time.
GM had said initially that there wouldn’t be any changes to GM’s marketing plans under the joint venture, called Commonwealth. As recently as Feb. 14 Chief Executive Officer Dan Akerson said on a conference call that Commonwealth “is still operative, still in place, and the savings are still projected.”
GM has also started looking for a new ad agency to handle its Cadillac luxury brand. Talks have begun with Interpublic’s Campbell Ewald about getting the work, the people said. Cadillac has been handled by Minneapolis-based Fallon Worldwide.
Pat Morrissey, a GM spokesman, declined to comment on advertising changes. Jeremy Miller, a McCann spokesman, Meagan Phillips, a spokeswoman for Goodby, and Carissa Warren, a spokeswoman for Fallon, declined to comment.
GM slid 1.1 percent to $28.07 at the close in New York. The shares have slipped 2.6 percent this year while the Standard & Poor’s 500 Index have risen 9 percent.
Alan Batey, the company’s interim marketing chief and head of U.S. sales, has been pushing for changes in Chevrolet’s advertising and anticipates McCann doing the bulk of advertising work at Commonwealth, the people said. McCann will probably gain control of the joint venture, one of the people said.
The automaker’s executives had grown increasingly frustrated with Commonwealth’s Chevrolet advertising, the people said. They believed the company had improved its cars and trucks while it had been unable to build marketing momentum, one of the people said.
A Chevrolet Malibu advertisement that highlighted the car’s stop-start technology, for example, was seen as ineffective, one of the people said. Malibu sales in the U.S. rose 3 percent last year, compared with the industry’s 13 percent. Deliveries this year are down 12 percent, in contrast with the industry’s 8.4 percent increase.
GM is introducing about 20 new vehicles in the U.S. this year as it works to regain market share after falling to an 88- year low in 2012.
GM’s decision to shift responsibilities for the upcoming introduction of the redesigned Chevrolet Silverado pickup to Publicis Groupe SA (PUB)’s Leo Burnett, which already had the automaker’s GMC truck brand business, was a signal to Commonwealth that changes were needed, one of the people said. Batey confirmed the move in January.
Ewanick in March 2012 announced the unusual creation of Commonwealth with Goodby and McCann as partners to handle all of Chevy’s advertising as part of an effort to save $2 billion over five years. The plan was to consolidate the work through one agency. GM’s largest brand by unit sales previously used 70 ad agencies around the world, the carmaker had said.
Ewanick had been a strong proponent of Goodby’s U.S. work and saw the joint-venture with McCann, which already had Chevy business in Brazil and China, as boosting Goodby’s capabilities worldwide.
Commonwealth “is the agency of record. We love the work they’re doing for us,” Chris Perry, vice president of Chevrolet marketing in the U.S., said yesterday in an interview in San Diego. He declined to comment on the idea of McCann taking over the Chevy work.
Akerson had already taken steps to restructure Cadillac as a global brand in October when he named Bob Ferguson as its chief, responsible for sales and marketing throughout the world.
Ferguson is asserting himself, re-examining how Cadillac conducts its advertising, one of the people said.
The automaker said yesterday that it’s conducting a review of its advertising agency for Cadillac. Fallon, which has the account, will be invited to participate in the review with other agencies, GM said in a statement on its website.
While the automaker didn’t disclose which other agencies it’s talking to, GM executives have already been in communication with Campbell Ewald about the Cadillac business, two people familiar with the efforts said.
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