When the Chrysler group put its black and Hispanic advertising into review March 28, it shocked the agencies that held the accounts. But it's a move that may become more common within the auto industry.
The Chrysler group may be setting the stage for how automakers communicate to multicultural audiences, what type of agencies they use to create that message and how much they spend to reach those consumers.
The American Advertising Federation in New York, of which most automakers are members, has encouraged its members to increase their multicultural ad spending in proportion with the minority population, which is approximately 30 percent of the U.S. population.
According to the federation, minorities spend $1 trillion annually, but only about 1.5 percent of the total $200 billion in annual ad spending by all companies goes to address ethnic markets. The percentage figure is about the same for the auto industry.
But instead of targeting ethnic groups, some automakers are dabbling in so-called urban marketing. That focus includes whatever is trendy, such as music and fashion, combined with references from various cultures in ads in an effort to reach consumers of all ages and colors.
And the black, Hispanic and Asian agencies that traditionally handle these accounts may no longer be in the front seat for the assignments.
In Chrysler's case, it's a matter of who has the expertise and resources to handle the automaker's new vision, said George Murphy, Chrysler's senior vice president of global brand marketing.
Murphy said the Chrysler group substantially will increase its multicultural marketing budget from the approximately $40 million it spends - the most in the industry.
He would not give a figure, but some sources within Chrysler said it could represent 25 percent to 30 percent of the Chrysler group's ad budget of about $1 billion.
"We need an agency big enough and with enough resources to do the job," Murphy said. "Maybe this will be an opportunity for minority agencies to come together."
But minority agencies fear if Chrysler gives its account to a white-owned agency, it will set the trend for other auto companies.