Ford Motor Co. put its global creative advertising account into review, putting incumbent WPP on the defensive at the same time it searches for a new CEO.
The account, now held at WPP's GTB unit -- formerly Global Team Blue -- has been under pressure for months as the automaker began re-evaluating marketing efforts as part of a larger so-called "operational fitness" initiative that includes slashing $14 billion in spending on materials and engineering over the next five years. Ford is taking the next step by formally putting the ad account up for bid. A request for proposals is expected to be released next month.
In a memo issued Friday, Detroit-based GTB notified employees of the pending review.
"WPP will have an opportunity to compete with other firms to retain these portions of the business, and will remain Ford's agency of record in some other key areas," GTB CEO Satish Korde said in the memo.
Excluded from the review are Ford's China business, public affairs, the U.S. dealer business and Ford's luxury Lincoln brand, which is handled by WPP's Hudson Rogue, according to the memo. "We will be enthusiastically responding to Ford's request for review in the days ahead, and have every confidence we will retain a substantial proportion, if not all, of the business under review," Korde said in the memo.
Ford, in a statement, said it is "going to place some portions of our advertising business up for bid with other agencies, including WPP, beginning in the coming weeks. No decisions have been made." The automaker added that it is "committed to driving greater marketing efficiency, effectiveness and customer insight, leveraging the latest tools and technology."
Ford is one of WPP's biggest and most important accounts. The automaker is the nation's ninth-largest advertiser, shelling out $2.3 billion in 2016, according to the Ad Age Datacenter. Globally, Ford reported advertising costs in 2016 of $4.3 billion, or 2.83 percent of revenue.
The review threatens to end one of the longest-running agency-client relationships across all industries. Ford has continuously worked with WPP agencies since 1943, when it hired J. Walter Thompson. JWT had earlier worked on Ford from 1910-1912 during the Model T era.
WPP created a multiagency dedicated Ford entity called Team Detroit in 2006 that was rebranded to Global Team Blue last year. GTB is headquartered near Ford's offices in Dearborn, Mich., and has offices around the globe.
But major management changes have occurred at Ford in recent months, putting Global Team Blue on the hot seat. Jim Hackett was named Ford CEO in May 2017, replacing Mark Fields. Joy Falotico, the former Ford Credit CEO, took over as chief marketing officer in March as part of a management overhaul that included the departure of North American president Raj Nair, who left the company after an internal investigation uncovered "inappropriate behavior."