Silverado ad work being switched by GM to Leo Burnett agency
The launch of the 2014 Chevy Silverado, pictured, and GMC Sierra will be GM's biggest since it emerged from bankruptcy in July 2009.
Photo credit: GM
DETROIT -- General Motors is switching creative advertising agencies for the 2014 Chevrolet Silverado ahead of the highly anticipated launch of the next-generation pickup next year.
GM has assigned Silverado creative duties to Leo Burnett, which now handles advertising for Buick and GMC, including the Sierra pickup, a GM spokesman confirmed.
Commonwealth -- the Detroit agency formed last spring as a joint venture of Omnicom Group and Interpublic Group of Cos. -- will remain Chevy's agency of record but will cede the Silverado work to Leo Burnett, owned by Publicis Groupe.
GM spokesman Pat Morrissey said GM wanted to alleviate some of the workload for Commonwealth, which will help the company launch some two dozen new or significantly revised Chevy vehicles next year.
"That is an incredible amount of work for any advertising agency, especially a newly formed entity that is responsible for global campaigns in 140 markets," Morrissey said in a statement. He said GM wanted to "leverage General Motors' existing agency network" by having Leo Burnett do the creative for both pickups.
"We believe having Leo Burnett work on both Silverado and Sierra will provide great synergies and result in creative campaigns that clearly differentiate the brands and engage truck customers," Morrissey said.
He said Commonwealth remains Chevy's global creative agency of record and will "continue to aggressively work on global campaigns."
The move comes a week after GM unveiled the next-generation Silverado and Sierra at a press event in suburban Detroit.
GM aims to recover full-sized pickup market share lost to Ford Motor Co. and Chrysler Group's Ram brand in recent years with vastly improved interiors and more-powerful and fuel efficient engines, coupled with more-muscular but traditional exterior styling.
The launch of the 2014 pickups will be GM's biggest since it emerged from bankruptcy in July 2009. The Silverado and Sierra are the company's most lucrative vehicle lines -- bringing in around $12,000 in profit per unit, analysts estimate -- and together are GM's highest-volume U.S. products.
The advertising switch on GM's most important vehicle marks the first major move by Alan Batey, who became interim chief marketing officer in July after GM dismissed former CMO Joel Ewanick.
Commonwealth was born out of a major consolidation of Chevy's creative advertising agencies, overseen by Ewanick. The move, aimed at cutting costs and unifying Chevy's global marketing efforts, assigned Commonwealth work that previously was done by some 70 agencies worldwide.
In a statement, Leo Burnett said it is "thrilled to expand its relationship with General Motors, take on responsibility for the very important Chevrolet Silverado brand and build our highly awarded and proven Detroit office."
It noted that the agency first began doing work for GM in 1967.
Representatives from McCann and Goodby did not return calls or declined to comment.
Goodby won the Chevy ad account in the spring of 2010, soon after Ewanick arrived as GM's top marketer. He pulled the work from Publicis, which weeks earlier had supplanted Campbell-Ewald, the Detroit agency that had a 91-year run as Chevy's lead agency, hatching such iconic campaigns as "Like a Rock" and "American Revolution."
Analysts estimate GM has invested $3 billion to $4 billion to develop the new pickups and engines, and to retool assembly and powertrain plants. Citi expects the new Silverado and Sierra to boost GM's 2013 and 2014 operating earnings by $1 billion.
It's unclear how much GM plans to spend to market the new pickups. But for the fall 2006 launch of the current pickups, GM budgeted nearly $400 million for the marketing campaign, Automotive News reported at the time.
The second-quarter launch of the trucks, delayed by the company's 2009 bankruptcy, is key to reversing a steady slide in GM's share of the big pickup market. It has declined from 42.2 percent in 2002 to 35.7 percent this year, its lowest level during that decade, according to the Automotive News Data Center.
Before the launches, GM will be scrambling to clear dealers' lots of swollen pickup inventory that has forced the automaker to offer big discounts on 2013 Silverados and Sierras. On Dec. 1, GM had a 139-day supply of the full-sized pickups, its highest level of the year.
High inventories can dent GM's profits by forcing the automaker to spend money on incentives or to cut production.
Through November, industrywide sales of full-sized pickups rose 10 percent, trailing the 14 percent sales growth for all light vehicles. Silverado sales were flat while Sierra sales rose 4 percent.
Rupal Parekh is a reporter for Ad Age
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