Deal With Japan's Hakuhodo to Give Client One Global Agency
LOS ANGELES--Responding to Nissan's stated desire to have one global agency partner, roster shops TBWA Worldwide and Japan-based Hakuhodo are planning to form a joint venture devoted solely to the automaker.
The move is a pre-emptive strike intended to satisfy the client's wishes before it looks elsewhere. The troubled Japanese automaker has said it wants to bring better global coordination to its advertising as part of a companywide pledge to cut costs by 20 percent.
Chief operating officer Carlos Ghosn, a former Renault executive who was put in charge of Nissan earlier this year, unveiled a revival plan in October. In addition to cost-cutting targets, including a global cutback of 21,000 employees over four years, Ghosn pledges to bring more uniformity to Nissan's brand image.
TBWA handles about $500 million in Nissan billings in North America and Europe, while Hakuhodo has the business in Japan.
Nissan would not comment on the joint venture, but representative Debra Sanchez-Fair said, "Our drive to realize greater efficiencies includes the idea of going to a single-source agency. We recognize, however, there is no one global agency that can handle all of our needs in Asia, Europe and North America." Sources said TBWA and Hakuhodo's plan is to create such an entity to fend off potential interlopers.
Other agencies have been circling the global $600 million Nissan account. Sources said Western Initiative Media and Lowe Lintas & Partners have been holding discussions with the client. However, it is believed those two are no longer in the hunt for the account.
TBWA is not out of the woods yet. The client, pressuring the agency to cut costs, has yet to express a commitment to the new venture as its single global partner.
Nonetheless, TBWA and Hakuhodo are moving ahead. TBWA recently transferred U.S. account director Robert LePlae from Playa del Rey, Calif., to Japan to head up the jointly owned operation.
Nissan has reported losses in seven of the last eight years and posted a $3 billion loss for the first six months of its current fiscal year. However, U.S. sales of its Nissan and Infiniti brands are up nearly 9 percent this year, thanks to strong sales of the Xterra sport utility vehicle, the redesigned Maxima and the Infiniti I30.
Agency executives declined comment. LePlae could not be reached. K