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Mitsubishi Kicks Tires

Why the troubled carmaker is shopping around for new creative

March 31, 2008

- Gregory Solman and Andrew McMains


NEW YORK Mitsubishi Motors North America's move last week to review its U.S. creative account comes as client executives are looking to cut costs and after sales declined for five straight months.

February sales declined 6 percent to 9,105 units, compared to the same month last year, when the carmaker sold 9,726 vehicles, according to Mitsubishi. The falloff was even more precipitous in January, when sales plunged 23 percent to 7,226 units.

The company's sales actually grew 7 percent last year, compared to 2006. But 2007's total of 128,993 units was down 63 percent from Mitsubishi's high-water mark of 345,111 units in 2002, according to Car Concepts in Thousand Oaks, Calif. Indeed, last year's sales uptick came amid what Car Concepts' Todd Turner described as a "sales valley" for the automaker.

The brand's major media spending grew in 2007 after years of declines. Total spending in 2007 exceeded $155 million, up from about $110 million in 2006 but down from almost $200 million in 2005 and about $270 million in 2004, according to TNS Media Intelligence.

The incumbents on the business, Omnicom Group's BBDO West in Los Angeles (traditional advertising) and sister shop Organic in San Francisco (online marketing), are not defending, and like Mitsubishi's last review, in late 2004 and early 2005, the Cypress, Calif.-based client is using Select Resources International in Santa Monica, Calif., to manage the search.

SRI issued RFPs last week, and Mitsubishi hopes to complete the process by the end of June. The consultancy declined to comment, and client evp of sales and marketing Dan Kuhnert limited his comments to a statement, which said, in part, "As Mitsubishi Motors begins a new three-year plan globally, it is appropriate for us to consider new possibilities."

Sources said that Mitsubishi wants an agency with strong digital capabilities, as that piece of the business will likely continue to expand. Online spending grew from just under $2 million in 2004 (before BBDO won the business) to more than $10 million last year, according to TNS. Company executives would like to have offline and online duties under one roof, but they'll also consider agencies that partner with interactive shops, said a source. Proximity also is important to the automaker, which expects the winning agency to have an office in Southern California.

Not included in the review are direct marketing duties, at Omnicom's Javelin in Los Angeles and Irving, Texas, and media duties, at OMC's PHD in Los Angeles.


Mitsubishi Kicks Tires

Why the troubled carmaker is shopping around for new creative

March 31, 2008

- Gregory Solman and Andrew McMains


NEW YORK Mitsubishi Motors North America's move last week to review its U.S. creative account comes as client executives are looking to cut costs and after sales declined for five straight months.

February sales declined 6 percent to 9,105 units, compared to the same month last year, when the carmaker sold 9,726 vehicles, according to Mitsubishi. The falloff was even more precipitous in January, when sales plunged 23 percent to 7,226 units.

The company's sales actually grew 7 percent last year, compared to 2006. But 2007's total of 128,993 units was down 63 percent from Mitsubishi's high-water mark of 345,111 units in 2002, according to Car Concepts in Thousand Oaks, Calif. Indeed, last year's sales uptick came amid what Car Concepts' Todd Turner described as a "sales valley" for the automaker.

The brand's major media spending grew in 2007 after years of declines. Total spending in 2007 exceeded $155 million, up from about $110 million in 2006 but down from almost $200 million in 2005 and about $270 million in 2004, according to TNS Media Intelligence.

The incumbents on the business, Omnicom Group's BBDO West in Los Angeles (traditional advertising) and sister shop Organic in San Francisco (online marketing), are not defending, and like Mitsubishi's last review, in late 2004 and early 2005, the Cypress, Calif.-based client is using Select Resources International in Santa Monica, Calif., to manage the search.

SRI issued RFPs last week, and Mitsubishi hopes to complete the process by the end of June. The consultancy declined to comment, and client evp of sales and marketing Dan Kuhnert limited his comments to a statement, which said, in part, "As Mitsubishi Motors begins a new three-year plan globally, it is appropriate for us to consider new possibilities."

Sources said that Mitsubishi wants an agency with strong digital capabilities, as that piece of the business will likely continue to expand. Online spending grew from just under $2 million in 2004 (before BBDO won the business) to more than $10 million last year, according to TNS. Company executives would like to have offline and online duties under one roof, but they'll also consider agencies that partner with interactive shops, said a source. Proximity also is important to the automaker, which expects the winning agency to have an office in Southern California.

Not included in the review are direct marketing duties, at Omnicom's Javelin in Los Angeles and Irving, Texas, and media duties, at OMC's PHD in Los Angeles.


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