Chevy combines global ad efforts in bid to create 'iconic' brand
Goodby, McCann to handle work under Commonwealth name
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The consolidation of GM's media-buying duties, combined with expected savings from streamlining Chevy's creative work, will save $2 billion in marketing costs over 5 years. |
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Editor's note: An earlier version of this story incorrectly described Ewanick's employment history. He joined GM from Nissan.
DETROIT -- General Motors will consolidate its worldwide creative advertising for Chevrolet under a new venture run by two conglomerates in a bid to slash costs and unify the brand's global message.
Two agencies that handle much of Chevy's creative work -- Goodby, Silverstein & Partners and McCann Erickson Worldwide -- will combine under an entity called Commonwealth to handle the brand's advertising for most markets around the world, GM said today.
Goodby, of San Francisco, which has been Chevrolet's main U.S. ad agency since May 2010 and is the architect of the "Chevy Runs Deep" campaign, is owned by OmniCom Group.
McCann Erickson, of New York, is Chevrolet's largest advertising agency overseas. It is owned by Interpublic Group.
Commonwealth will be headquartered in Detroit and employ about 280 people.
Commonwealth will immediately begin to take over responsibility for Chevrolet creative work in most markets, with the exception of China, India and Uzbekistan. Activities there will continue to be managed by agencies specific to those countries.
Dealer agency unaffected
A GM spokesman said the consolidation won't affect Agency 720, which handles GM's regional marketing campaigns in the United States run by dealer groups.
GM global marketing chief Joel Ewanick said GM will continue to use smaller, local agencies in various markets, though that work will be coordinated by Commonwealth.
Ewanick said the January consolidation of the automaker's media-buying duties, combined with the expected savings from streamlining the Chevy creative work, will save $2 billion in marketing costs over five years.
Some of those savings will go back into the marketing budget and some will flow to the bottom line, he said in a statement.
"The No. 1 goal is to find the best method and way for us to build the Chevrolet brand globally," Ewanick told reporters during a conference call.
"We're in a very competitive marketplace, up against some really strong competitors -- Toyota, Ford, Hyundai and Volkswagen," he said. "We need to find ways to have a more clear and concise and consistent message globally as we try to attain our long-term goals."
No decision on 'Chevy Runs Deep'
The move amounts to a vote of confidence for Goodby. Ewanick appointed the agency within weeks of his arrival at GM after a brief stint at Nissan North America, which he joined from Hyundai Motor America. Ewanick is a friend of Goodby co-founder Jeff Goodby and worked with the agency and Jeff Goodby while Ewanick was with Hyundai.
In an August interview with Automotive News, Ewanick said he wanted more consistency out of Goodby, giving it "B and C" marks because of what he described as inconsistent work.
In recent months, he has praised Goodby's work.
Ewanick said that one of the agency's first tasks will be to review the "Chevy Runs Deep" campaign, which has been criticized in some media circles.
"No decision has been made on 'Chevy Runs Deep,'" Ewanick told reporters during a conference call. "What do we do with the theme line? Do we need a theme line?"
Ewanick said the campaign has been gaining "some traction" in some markets globally, but that its future is "open for discussion." He expects a decision will be made by this summer.
'Consistent global branding'
The new agency will be owned jointly by the two holding companies and overseen by an eight-person advisory board to "ensure consistent global branding across the diversity of local markets," GM said in a statement.
Ewanick said the joint venture between two rival media conglomerates is a "first-of-a-kind" arrangement that will align some of the world's most talented ad executives behind the Chevy brand. Jeff Goodby, co-chairman and creative director of Goodby, will become creative chairman of Commonwealth.
Offices in Detroit; Milan, Italy; Mumbai, India; and Sao Paulo, Brazil, will be key marketing hubs.
The move promises to rearrange billions of dollars in advertising work around the globe. About 70 ad agencies and some 2,000 employees at outside firms handle creative work for Chevrolet around the world.
Global ad budget: $4.48 billion
GM's global advertising budget rose 5 percent last year to $4.48 billion, according to its annual report filed last month.
The automaker doesn't break out ad spending by brand, but Chevy accounted for more than 60 percent of U.S. unit sales in 2011.
In the United States, GM spent $1.1 billion on Chevrolet advertising last year, according to Kantar Media North America, a New York firm that tracks ad spending.
The drive to cut marketing costs is part of a broader effort from GM CEO Dan Akerson to boost profit margins while reducing complexity in GM's operations.
He's also moving to pare engineering costs. For example, he has pushed GM to consolidate the number of its vehicle platforms to 14 main architectures by 2018, down from 30 a few years ago.
Overseas growth for Chevy
Akerson also is committed to accelerating Chevrolet's growth in overseas markets.
That's a big reason why one of his first moves after becoming CEO in September 2010 was to elevate Ewanick to the newly created role of global chief marketing officer from U.S. marketing chief.
Since then, Ewanick has spent much of his time in far-flung countries such as India, Thailand and Brazil.
On his iPad, Ewanick keeps a log of the countries he visits, with entries detailing everything from Chevy's regional marketing structure to local culinary tastes and traffic quirks.
In October, GM said that it would consider proposals from Goodby, Interpublic, Publicis Groupe of France and Cheil Worldwide of Korea as part of the creative-advertising review.
You can reach Mike Colias at mcolias@crain.com.
