"Smart has to save money. The brand will pull out of conventional advertising in print and on TV and instead will bet on customer relationship advertising," a source close to the company said.
The new strategy is being developed with Duesseldorf-based BBDO, which is likely to win Smart's ad account for Europe from Spring & Jacoby, Smart's lead agency for the past four years.
A Smart spokeswoman said the company will present the first results of its marketing review at the end of August.
"Currently every option is being discussed," she said.
Anders Sundt Jensen, head of Smart sales and marketing, has already announced that the brand plans to present itself "in a more integrated way across Europe" in the future. In the process, it wants to pay closer attention to the "special habits" of current and potential customers.
The switch from S&J to BBDO has been hinted at for months.
"We are not separating in anger," said Dirk Spakowski, S& J's chief consultant.
The Hamburg agency has won more than 50 advertising prizes for Smart.