NEW YORK -- For a place called Motor City, Detroit in 2009 saw some significant chunks of automotive business disappear: an estimated $500 million to $1 billion in ad dollars were sucked out of the market and hundreds of agency staffers were left without jobs.
As bankruptcies and bailouts plagued U.S. automakers, some long-standing relationships with Detroit ad shops broke down to the gain of other agencies around the country, such as Wieden & Kennedy of Portland, Ore., and Fallon of Minneapolis, Minn.
Getting a gauge on just how much marketing money has fled Detroit is an inexact science given that spending levels today are far lower than they were before the recession hit in late 2007 and measured-spending figures for full year 2009 are not yet in.
For the first nine months of 2009, the auto industry spent $8.27 billion in measured media, down 30.1 percent for the same period the prior year, according to TNS Media Intelligence. And automotive -- long the de facto biggest category of advertisers in the nation -- was overtaken by retail as the second-biggest ad spending category last year, according to Advertising Age, an affiliate of Automotive News.
One carmaker among the Detroit 3 that's remained loyal to Detroit is Ford Motor Co., which has kept its advertising for all brands consolidated under WPP's holding-company umbrella. The one that's shown the most interest in shops outside of Detroit is Chrysler.
Before its bankruptcy and prior to its control by Italy's Fiat, Chrysler had virtually of all its ad duties parked in the Detroit area. That changed in the back half of 2009, when new management transported large pieces of its accounts to other cities. BBDO Detroit shuttered as a result of the automaker failing to reach agreement on a new contract with the Omnicom Group agency. At least one other Detroit agency office, that of Boston-based Modernista, is expected to close due to the exit of its Cadillac business.
In addition to the brands that migrated to other cities, brands such as GM's Saab and Saturn vanished altogether. The former's agency was McCann in Detroit, while Saturn's shop was Interpublic sibling Deutsch on the West Coast. According to TNS Media Intelligence, measured spending for the two brands in 2008 amounted to more than $200 million.
By any measure, a devastating blow was dealt in 2009 to an advertising hub that for so long prospered because of a healthy American car market that is now struggling to stay afloat. The attached map illustrates some of the biggest account shifts out of the Detroit ad market in the 12 months and the ones Detroit has so far managed to hold onto.
What stays in Detroit
• WPP's Team Detroit handles Ford, Lincoln and Mercury strategy, creative and media in the U.S. TNS reports that Ford spent a total of $729 million on measured media in the first three quarters of 2009.
•GlobalHue was the lone agency standing amidst Chrysler Group's flurry of ad-agency changes, holding on to ad work for Jeep, which according to TNS spent a total of $51 million in the first nine months of 2009.
• Publicis Groupe's Leo Burnett, Detroit, handles GM's Buick and GMC national creative accounts. Together, GM spent just over $200 million on those brands in the first nine months of 2009, according to TNS.
• Starcom MediaVest Group handles a portion of its media planning and buying duties on GM's more than $1 billion account from a Detroit office, but the agency is based out of Chicago.
• It lost Chevy cars, but Campbell-Ewald keeps Chevrolet truck advertising for the Olympics, along with the assignment to create Olympic ads for Eco fuel-efficiency vehicles, including the upcoming Volt plug-in electric model due late next year. With half of Chevy's ad dollars leaving for Publicis, that leaves C-E with some $250 million in billings, according to the most recent TNS data available.
• Some of GM's digital ad work that doesn't move to a low-cost production facility in Argentina will stay in Detroit. Interpublic-owned MRM was handed U.S. digital production work in 2009 that was earlier at Digitas-owned production shop Prodigious Worldwide. Prodigious' U.S. operations are based primarily in Boston and New York. The deal has been estimated at a value of $100 million in billings over five years, and MRM plans to staff the GM account by hiring 200 people between Detroit and Argentina.
• McCann, Birmingham, handles GM corporate work, worth nearly $170 million according to TNS data for the first three quarters of 2009.