American Honda places $700 million U.S. ad account under review

American Honda Motor Co., facing a challenging but growing U.S. light-vehicle market, is placing its $700 million U.S. creative and media accounts for the Honda and Acura brands under review.

The automaker has worked with Santa Monica, Calif.-based RPA on creative and U.S. media buying and planning for 26 years, and the agency will participate in the review process, Honda said today.

Honda told Advertising Age, a sister publication of Automotive News, the review is expected to be completed in the first quarter of 2013.

"Both the Honda and Acura brands are rolling out incredibly strong new products. In the face of a changing media landscape and a hyper-competitive marketplace, our challenge is to create dynamic marketing campaigns that connect and engage consumers with our products and our brands," Michael Accavitti, vice president for American Honda's national marketing operations, said in a statement.

"The review we have initiated will lead to a strong, long-term strategic plan for our brands," Accavitti said.

Best November ever

The review comes on the heels of Honda's best November ever in terms of U.S. sales.

American Honda's sales this year are up 24 percent through November, though the results are skewed due to last year's earthquake and tsunami in Japan that reduced Honda and Acura inventories.

The Honda and Acura brands should combine to finish the year with sales of around 1.4 million units in the United States.

But Honda has grander sales aspirations in the U.S. market.

Honda Motor CEO Takanobu Ito wants Honda's North American sales to increase to 2 million in the near term from 1.7 million units presently.

Former American Honda sales boss Dick Colliver had a similar goal for the U.S. sales arm in the early 2000s, and never came close -- sales peaked at 1.55 million units in 2007 before the recession sent industry sales tumbling to a 27-year low.

The Honda brand spent $513.5 million on U.S. measured media in 2011, a 2.9 percent increase from 2010, while Acura spent $193 million, a 1.9 percent increase from 2010, according to the Ad Age Data Center.

American Honda's total U.S. marketing spending was $1.14 billion, Ad Age says. Globally, the company reported ad expenses of $2.46 billion during the year ended March 2011, an increase from $2.12 billion in 2010, but still below the $3.01 billion it spent in 2009.

Part of the Honda family

When he joined Honda last year, Accavitti told Automotive News there was no need to put RPA's business up for review, saying an agency review would be, "completely unproductive and unnecessary."

"RPA is an extension of the Honda family," he said.

As recently as August, he praised RPA's Super Bowl work.

"I am not a fan of airing differences with agencies in the press," he told Automotive News at the time. "If I have an issue with ad agency, I will call them."

"RPA has very capable individuals," he added. "We just needed to have a common understanding of what the objectives were, and they've been able to come up with good creative. Continuous improvement is the name of the game."

RPA, whose roster is dominated by Honda -- its Web site lists only a few other clients, including Intuit, La-Z-Boy and Farmer's Insurance -- referred calls for comment to Honda.

Business opportunity

The Honda review could mean a new opportunity for media and creative agencies eager to land the biggest automotive ad account since GM reviewed its multibillion-dollar business last year.

RPA was awarded the account in 1986 from Needham Harper after the "Big Bang" merger with Omnicom's DDB -- Volkswagen's agency at the time -- as part of a rollup with BBDO, the ad agency for Chrysler at the time.

The review does not include Honda's multicultural ad accounts, which are handled by Muse Communications and Orci.

Alexandra Bruell is a staff reporter for Advertising Age