The move could close Robert Elen & Associates, the L.A. shop that handles Honda dealer billings in California, Missouri, Texas and Virginia. Agency principal Bob Elen said the Honda work represents the bulk of the shop's $20 million in billings and 30 jobs.
'Obviously, if they walked in here tomorrow and yanked all the business we'd be out of business,' said Elen, who is hoping that he can replace some of the billings before the contracts run out.
The consolidation, expected to double Honda's regional ad spending over 1992 levels, will also boost the 7-year-old agency's billings to $340 million annually, making it the sixth largest shop in the West. The plan calls for the agency to expand into six new cities and bolster its headquarters operation, adding more than 100 people to its payroll.
The move, which takes effect April 1, was engineered by Honda senior vp/sales Richard Colliver, who joined the company in February from Mazda.
Colliver hopes the consolidation will bring economies of scale and a more consistent marketing effort.
Honda's Accord last year lost its title as best seller in the U.S. to Ford's Taurus. This year the company's sales are down 5.6% through September, although the impact of the redesigned Accord, which debuted last month, hasn't yet been felt.
'The consumer now perceives Honda as having neighbors in the forms of Saturns and Chrysler LH sedans and Tauruses,' said Denny Remsing, a 27-year ad veteran of agencies with car accounts hired to oversee the dealer business. 'And five years ago that wasn't the case.'
Honda long resisted the growing trend toward consolidation, but now Colliver hopes placing the dealer ads with Rubin Postaer will foster compatibility between national and dealer campaigns - efforts that have sometimes been at odds, according to recent research by the company. 'There was confusion in the marketplace,' Colliver said.
Rubin Postaer will establish regional 'hub' offices in the N.Y., Chicago, Atlanta, Dallas, Boston and Portland areas. It has no plans to pursue other business in those markets.
Colliver said no other agencies were considered. Rubin Postaer's track record and understanding of 'Honda culture' made it a logical choice, he added. 'We've been rehearsing for this for 20 years,' said co-principal Gerry Rubin.
Rubin said each regional office will have 10-20 employees from account planning, research and media buying disciplines. Between 50 and 60 new employees will be added in Santa Monica, where creative duties will remain, and the media buying department will coordinate the new program.
Rubin Postaer's gain spread losses over 50 agencies who counted either one or more of the 81 dealer associations on their client rosters.
Copyright Adweek L.P. (1993)