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Car Quandary: Which to Pitch?

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NEW YORK Behind door No. 1 is a high-profile Swedish import. Door No. 2: an affordable Korean brand. Door No. 3: a venerable American 4x4.

Easy choice? Maybe not.

But there are worse dilemmas to face. And although pitches for Ford's Volvo, Hyundai and DaimlerChrysler's Jeep stemmed from different factors, the confluence of all three at once has forced agencies to think hard about which brand represents the best fit, the best opportunity and the best odds of winning.

Take Omnicom Group's Goodby, Silverstein & Partners, for example. The shop is believed to have passed up an opportunity to join a group of Omnicom shops pitching creative ideas to Jeep opting instead to join Volvo's global review as sister shop 180's partner, only to exit two weeks ago to chase Hyundai's U.S. account, said sources.

And as if to prove that timing is everything, Goodby became available to pitch another car account after General Motors' Saturn fired the San Francisco shop in late January (and shifted its business to Interpublic Group's Deutsch/LA).

Sources said Hyundai lured Goodby out of the Volvo review and also contacted at least two of the other contenders in that review: Publicis Groupe's Fallon and the team of Havas' Arnold and independent Nitro. Fallon and Arnold/Nitro, however, are staying put, along with Havas' Euro RSCG, the other finalist and primary incumbent.

Hyundai's overtures raise another issue: how does an automaker develop a quality list of contenders given the relatively few un-conflicted shops that are capable of handling a car account? The latter requires greater flexibility than in the past, as illustrated by the global Volvo list, which includes the pairing of Arnold for the U.S. portion of the account and Nitro for international duties. Neither shop could have handled the global account on its own.

Another complicating factor? The influence of holding company relationships with certain carmakers. DaimlerChysler predominantly uses Omnicom agencies. As such, in reaching beyond incumbent BBDO, Jeep is looking only at Omnicom shops for now, among them Element 79, Downtown Partners and Cutthroat, the new Chuck McBride-led shop, sources said. Volvo's final list, however, contains no WPP Group agencies, despite the WPP's deep roots with Volvo parent Ford.

Goodby's decision to exit Volvo, which came after the shop had been briefed for final presentations, appears to be as much a numbers game as a chemistry call.

Goodby executives are familiar with Hyundai vice president of marketing Joel Ewanick from his years as general manager of marketing at Porsche, which Goodby handled from 1993 to 1998. Also, Hyundai COO Steve Wilhite has a track record of associating with Omnicom shops in the past, such as when he was at Nissan (whose global lead agency is TBWA) or Apple (also TBWA).

And, in terms of revenue, Hyundai's U.S. business is believed to exceed that of Volvo globally, and if Goodby wins Hyundai, it won't have to share revenue with a partner shop. Revenue on Volvo, which spends about $150 million in measured media globally, is estimated at $15-20 million. Hyundai, whose revenue figure could not be ascertained, spends nearly $600 million annually in the U.S. alone.

From a brand perspective, the challenge of forging a distinct identity for Hyundai in the crowded U.S. market may also be more appealing than repositioning Volvo. As one source put it, "Volvo has a brand identity, it stands for something. Whereas with Hyundai you have the opportunity to rewrite history, to create something out of nothing."

Volvo global chief marketing officer Tim Ellis said he was "disappointed" that Goodby pulled out. "But they need to look out for their own business interests and their own people," Ellis added. "So there are no hard feelings." Goodby's exit, however, leaves sister shop 180 without a strong U.S. presence.

Amsterdam-based 180 opened a Los Angeles office in January but it has just a handful of staffers. So even though Volvo is allowing 180 to pitch on its own, the agency needs to overcome the perception it lacks the necessary resources in a key Volvo market. "They have to grow their operations in the U.S., whereas the other agencies already have established operations," Ellis said. "It puts a little more pressure on them, but we have faith in their abilities." Hyundai, meanwhile, is expected to settle on a shortlist soon. The primary incumbent, independent The Richards Group, is not defending. But sources expect recent roster addition Siltanen & Partners to pitch.

Reflecting on the recent uptick in automakers seeking new shops, Ellis said: "It's hard for me to speak on behalf of the other car brands that are in review. But it's safe to say it's a very challenging period right now. "There's nothing from a communications perspective [that's necessarily wrong], but the industry is in a challenging place." Or, or as agency executive said, "Most car brands are having a really hard time. If you're in the marketing department your immediate recourse is, 'Let's change the agency.' And that will buy you six or nine more months in your job."

And while most observers don't perceive Hyundai as a rival of Volvo's, Ellis went so far as to call them a "secondary competitor," adding: "If you look at our growing portfolio of cars, we are reaching out to new targets in the lower and upper ranges. So, we are bringing in new consumers in the lower and upper tiers, and thus beginning to fight for market share with car companies previously not seen as core competition."

Agency executives said chemistry is almost always the most important factor in deciding which account to pursue when multiple options exist. "You should never do anything just for money," one source said. "Chemistry is the most important thing. Chemistry is more important than money." Said another source: "Chemistry is always important no matter what. That is such a major factor in why agencies win. It's less about the thinking and the strategy. The reality is chemistry plays a big role."