Interpublic Group of Cos. is the big winner in General Motors' coming agency shuffle.
The losers: about 60 regional agencies that now handle creative and media buying for 954 GM dealer marketing groups. GM will disband those ad groups April 1, 1999, when it consolidates media buying and creative production at its national agencies.
Billy Harvill, CEO of Strong Automotive Merchandising, a regional Chevrolet agency in Birmingham, Ala., said the shop will lose nearly half its annual billings in the shuffle.
He hopes to win new business from individual GM dealers, but, he said, 'I doubt it will replace all the business we're going to lose.'
Interpublic, which already handles more than $1 billion in annual spending from GM, will gain hundreds of millions of dollars.
Local Communications Inc., a year-old media-buying unit of Interpublic's McCann-Erickson Worldwide, picks up spot TV and radio buying, which is worth about $500 million a year.
Campbell-Ewald of Warren, Mich., also owned by Interpublic, is another big winner. It adds the media planning and creative production, now done by the dealer marketing groups, to its $650 million national Chevrolet work.
Chevrolet traditionally spends about $300 million on dealer group advertising, dealers said.
Interpublic's Ammirati Puris Lintas, New York, adds the same work for GMC, while McCann gets the Buick work.
In addition, GM is consolidating responsibility for its sponsorships, events and promotions at R*Works, a new specialty agency being formed by Interpublic.
Consolidating the dealer ad budgets clearly will give GM more clout in media-buying negotiations. Local Communications Inc. 'can get 20 percent to 25 percent greater cost efficiencies than the way we buy media regionally today,' said Phil Guarascio, GM's vice president of advertising and corporate marketing.
GM executives declined to discuss whether less money will be spent on local advertising under the new structure, but they insisted GM's overall ad budget will stay the same.
Said John Middlebrook, vice president of vehicle brand marketing: 'Our share of voice will not decline in local markets. The total pot of money doesn't change.'