Chrysler Calls an End to Detente

Finally!” was the battle cry at FCB, with employees tacking up signs around the agency with the exclamation. “We welcome this review,” added David Bell, the CEO of FCB parent True North. “We lived in an era of detente with BBDO at Chrysler’s request.”

The mood at BBDO Worldwide was similarly confident. “The fact is, we have been preparing for this day for years,” said BBDO Worldwide CEO Allen Rosenshine.

And last week, the time came when DaimlerChrysler threw nearly all of its $1.5 billion advertising account in review, pitting Omnicom’s BBDO against FCB. The scope of the review includes creative, as well as media buying and planning. The automaker’s worldwide Chrysler, Jeep and corporate brand creative is handled by Southfield, Mich.-based FCB, while BBDO Worldwide in Troy, Mich., handles creative for Dodge. The company’s media buying and planning is handled by Omnicom unit PentaCom, also in Troy. Presentations are expected to be completed by Oct. 6, and a decision is expected early in the fourth quarter.

Not surprisingly, executives at each agency pointed to details that proved they were better suited to pick up the business. Tom Clark, vice chairman of BBDO Worldwide and chairman of PentaMark, was quick to note that their InterOne Marketing Group, which handles DaimlerChrysler’s customer relationship marketing, is not affected. Clark claimed that indicated an Omnicom strength.

And on Friday, in a move designed to bolster its standing, True North acquired a 35 percent stake in Springer & Jacoby, the Hamburg, Germany, shop that handles Mercedes advertising overseas; FCB executives said the partnership will give them an advantage in the review. “The heart and soul of Chrysler resides in the heart and soul of our company,” said Bell.

Arthur Liebler, DaimlerChrysler svp, Chrysler group marketing, said that the review was sparked by the client’s desire to cut costs.

“That’s what makes the presentations more difficult,” one executive said. “It’s not like you can blow out a reel and say, ‘Our creative is better than theirs.’ … It’s one of those times where if they have the presentation in written form, everyone will just go straight to the back page with: ‘How much money did you save?’ “

The winning agency is likely to pick up many key people from the losing shop. “That’s going to be strongly suggested by DaimlerChrysler,” one executive said. “They want to deal with a lot of the same people and get a lot of the same services, but with a cost savings.”

Losing the account could mean the end for either agency in the Detroit area. Neither FCB nor BBDO have a substantial amount of non-DaimlerChrysler business in those offices.

If FCB and True North were to emerge the victors, the agency would have to set up a system for handling media. Bell said the model would be based on the company’s joint venture with CIA Medianetwork, DaimlerChrysler Media Alliance, which handles media buying and planning internationally for the automaker.

DaimlerChrysler officials insisted the two agencies are on a level playing field. The automaker’s selection committee includes Liebler; Joe Casola, vp, global marketing operations; Tom Marinelli, vp, Chrysler/Jeep global brand center; Jim Julow, Dodge vp; and Ted Cunningham, evp, global sales and marketing. Company president and chief executive Jim Holden is not on the committee but, ultimately must sign off on its decision.

Coincidentally, Holden was evp of sales and marketing at the Chrysler Corp. (before the automaker’s 1998 merger with Daimler-Benz AG) and was witness to another showdown between the two agencies.

In 1997, Omnicom and True North were both pursuing Bozell Worldwide. Sources at the time said Holden would have preferred an Omnicom acquisition. Holden stopped short of opposing the eventual True North takeover, but while it was still in process, he was vocal about conflict concerns.

When news of the review first broke last Thursday, True North shares fell 5.63 to 38.38, but began to recover Friday, closing up 1.62 to 39.12. Almost 3.7 million shares of True North traded on Thursday, more than 15 times its three-month daily average. Omnicom fell 1.75, or 2.1 percent to 80 on Thursday, but rose .62 to 80.62 at close on Friday. Shares of DaimlerChrysler fell .31 to 50.56 on Thursday, and .31 on Friday to 50.25. The accounts up for review represent about 10 percent of True North’s annual revenue and 2 percent of Omnicom’s. K