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Behind the Chevrolet shift: Publicis didn't rate a callback

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Behind the Chevrolet shift: Publicis didn't rate a callback

GM Marketing Chief Joel Ewanick made switch before meeting with incumbent shop

Rupal Parekh

Advertising Age -- May 24, 2010 - 12:34 pm ET

NEW YORK -- As one person close to the situation put it, Chevrolet was "the Christmas present that never arrived" at Publicis.

It had only been a month since Publicis had been awarded the $600 million Chevy account when marketing chief Joel Ewanick arrived at General Motors Co. off a brief six-week stint at Nissan. The first clue that things were awry came when Publicis executives -- including holding-company chief Maurice Levy -- tried to contact him in the days after he joined and their calls went unreturned.

They remained unreturned until after Ewanick had shifted the entire Chevy brand to his friend Jeff Goodby's agency, Goodby Silverstein & Partners. And although some 15 Publicis executives were in Detroit working on focus groups with Chevy team members as Ewanick put the changes into motion, he did not meet with any of them.

Levy was unable to return calls for comment by press time. Several other top executives declined comment.

But it's not hard to imagine the frustration considering the support Publicis Groupe was asked to provide GM through its bankruptcy (at one point in June 2009, the holding company capped its financial exposure to the bankruptcy at $78 million). Levy, moreover, is hamstrung by the fact that GM is one of Publicis' biggest clients -- affiliates Leo Burnett, Digitas and Starcom all have major GM assignments, and Publicis-backed Bartle Bogle Hegarty is new to the roster on the Cadillac account.

Publicis has a contract that expires at the end of May from the project it was awarded for Chevy during the Olympics. At the time of the account move to Goodby, contract negotiations were still taking place at Publicis for Chevy work that was at Campbell-Ewald -- itself dropped for Publicis after 91 years.

Internal memo

The sting was bad enough that Publicis USA Chairman-CEO Susan Gianinno vented her dismay at the situation in a frank internal memo to agency staff obtained by Advertising Age, an affiliate of Automotive News. "One thing I know for sure is that Chevy has lost something in this decision," she wrote last week.

"I am not saying they will fail; or that the agencies they will work with are bad. I am saying that they were disrespectful in this decision. It was made without a thoughtful review of what we were doing or had planned. It was made without meeting any of us. That just isn't right. But things are not always right and fair."

True, Ewanick inherited the shop from his predecessor. And it's clear that if he was planning on moving the account, it was best to do it before Publicis had fully immersed itself in the business and hired staff. Yet the break was managed unconventionally, to say the least.

Advertising Age was told Ewanick would not be available to comment on his decision for a period of 30 days.

The shift last week is a testament to the power of relationships in the advertising industry, but perhaps more importantly a lesson in not burning bridges with clients. Even after Goodby was dumped by Hyundai last year for in-house agency Innocean, Goodby has publicly described his relationship with Ewanick as friendly.

Long relationship

Of course, the two go back a long way and have a history of ad successes on car brands. Twenty years ago, in his first marketing post as general manager-marketing at Porsche, Ewanick tapped Goodby to reverse a decade of declining market share. While some question the handling of the situation by Ewanick and GM, the decision to hire Goodby to help the ailing Chevy brand is one industry executives hail as a smart one.

Goodby will have to quickly beef up staff beyond its current 575 and add a Detroit office. It is helped somewhat by the fact that it's worked with GM before -- on the Saturn account between 2002 and 2007.

The challenges on Chevy are steeper though, and Goodby will need to hit the ground running. Chevy sold 1,338,612 vehicles in the United States during 2009, down 25 percent from 1,790,519 in 2008, which translates into a 0.8 percentage point market share loss in the past year, according to the Automotive News Data Center.

But GM’s outlook continues to improve less than a year after its government bailout and emergence from Chapter 11 bankruptcy. Chevy sales through the first four months of 2010 rose to 472,958 -- up 31 percent compared with the same four months of 2010.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100524/RETAIL03/100529921/1261#ixzz0oswGqwen

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