When the Chrysler group consolidates its $1.8 billion global creative and media account at a single shop, the company plans to keep the group's existing brand divisions in place, and it is counting on the winning agency to employ separate teams for each division.
'Nothing's going to change on our side of the fence. We don't plan to change our internal organization,' said Bud Liebler, senior vice president of Chrysler group marketing. 'We're not going to do anything to break down the separations of the brands and the divisions.'
In September, the company asked Omnicom Group's BBDO Worldwide and True North Communications' FCB Worldwide to develop proposals to slash agency fees while providing the same level of creative, media buying and media planning services for the Dodge, Chrysler, Jeep and Plymouth brands.
An executive at one of the agencies suggested the marketer wants to cut annual fees by $86 million. One institutional investor with stakes in both agency companies said he had been told DaimlerChrysler is looking to cut agency costs by 25 percent.
The two contenders returned Oct. 25 to the client's headquarters in Auburn Hills, Mich. The automaker met separately with each side to get more details and clarifications about their early October presentations for the more than $1.8 billion consolidated global creative and media account.
Though the client originally said a decision would come by the end of the year, the winner could be named in November, Liebler said. Among other details, DaimlerChrysler is examining each agency's proposal to gain operational efficiencies.
Liebler said both agencies have kept all their people in place and performed their duties. 'I'm sure there's a lot of nervousness and tension, but they're not showing it.'
An executive at one of the agencies, who asked not to be named, said each will face a 'cultural upheaval' whether it wins or loses the account.
FCB's Southfield, Mich., office handles the estimated $800 million national and regional dealer Chrysler, Plymouth and Jeep accounts. The Chrysler group will stop selling Plymouths at the end of the 2001 model year and the brand will disappear.
BBDO's Troy, Mich., office handles the estimated $750 million national and regional dealer Dodge accounts. Its PentaCom subsidiary, also in Troy, buys $1.7 billion in media for all Chrysler group brands and Mercedes-Benz in the United States and plans media for all except Mercedes.
The $1.8 billion global figure includes Chrysler group billings outside the United States.
When they learned of plans to consolidate all of the former Chrysler Corp. brands at one agency, many dealers were upset. The automaker told dealers about the shootout the same day it told the agencies, Sept. 6. A Dodge dealer, who asked not to be named, said he is worried the brand could lose its identity if BBDO loses. A Chrysler-Plymouth dealer said he's worried about losing brand identity should FCB lose.
'We're not going to decimate any progress we made with our brands,' Liebler said. DaimlerChrysler, he said, wants to keep the brands distinct and has told the agencies it doesn't want 'a single creative guru' to oversee all brands.
Dealers asked to be included in the review process. DaimlerChrysler gave its dealer council an overview of the agencies' plans in Las Vegas the week of Oct. 16. Later it met separately in Auburn Hills for a deeper dive into the proposals with the dealer executive committees of the Dodge and Chrysler-Plymouth-Jeep divisions.
Massachusetts dealer Tom Barenboim, national chairman of the Chrysler-Plymouth-Jeep council, said he 'was very sensitive at first to the idea of having just one horse' for the two divisions' advertising. He changed his tune after meeting with Chrysler group executives. 'It's all about taking costs out, he said. 'It's the reality of today.'
Barenboim said he saw no indication that DaimlerChrysler executives were leaning in favor of either agency. 'It's not a foregone conclusion,' he said. 'The decision has not been made.'