LOS ANGELES - Kia Motors America Inc. suddenly fired advertising agency Goldberg Moser O'Neill last week, just weeks after praising the agency for its work.
Goldberg Moser had been Kia's only agency since the automaker's 1993 U.S. launch. The agency's ads will continue to run for 90 days.
Dick Macedo, Kia's executive vice president of marketing and sales, said the firing 'was not a result of slow sales or bad creative. It was done for other business reasons.'
HIGH TURNOVER BLAMED
He said the relationship was hurt by high turnover at the agency, including the recent departure of creative chief Mike Moser.
'We need more resources for strategic planning, brand audit, brand management and allocation of media dollars. They don't have that capability, especially with Kia launching three new vehicles in the next 12 months,' Macedo said.
The agency disputed that point.
'We have all the resources necessary to support the business. In fact, much of our new business came because of our strategy planning ability,' said Goldberg Moser spokeswoman Ruth Grossman. Goldberg Moser is owned by advertising giant Interpublic Group of New York. Goldberg Moser will look for a new auto client, Grossman said.
Goldberg Moser also noted that it has at least five accounts as large or larger than Kia's $80 million annual budget. That figure is expected to grow significantly in the next few years.
HIGH MARKS IN THE PAST
Previously, Kia had given Goldberg Moser high marks for its work. Goldberg Moser had understood Kia's desire to be tongue-in-cheek with its ads, well before self-effacing humor became the trend in car marketing. Kia believed that building cars was not rocket science and that advertising should lack such pretensions.
Recently, Macedo had praised the agency's poof campaign that poked fun at millennium panic with the idea that Y2K meant, 'Yes 2 Kia.'
Well-placed incentives have helped Kia's sales rise 61 percent this year.
In an interview last month, Macedo said, 'Advertising has always been a very central component to our success.'
Money may have been another issue. After 18 months of haggling, the two parties finally had signed their 1999 agency agreement last week. Macedo said the disagreement was 'not a fee issue.'
And ever since Hyundai Motor Co. bought Kia's bankrupt Korean parent, there has been a strong move to cut costs. Industry sources said that might include combining marketing at Hyundai Motor America agency Bates USA, although Macedo firmly denied that was in the cards. Kia already has settled on an unidentified replacement agency. The two parties are merely ironing out details.