Carmakers Change Rules of the Game

NEW YORK In early 2007, when Chrysler sought a new creative direction for its Jeep brand, it mulled ideas from five Omnicom Group agencies before shifting national creative duties from BBDO to Cutwater. The “keep-it-in-the-family” review was typical of the arrangement that Omnicom had with major clients, including Chrysler and PepsiCo.

This month, however, as Chrysler again seeks new ideas on its Chrysler and Dodge brands, it’s considering several non-Omnicom agencies, including MDC Partners’ Crispin Porter + Bogusky, Publicis Groupe’s Publicis & Hal Riney and WPP Group’s Grey, said sources. (Sources said that consideration of WPP’s global relationship with mega-client Ford might lead Grey to withdraw.) The incumbent, Omnicom’s BBDO, is also participating, with presentations slated for next week.

The shift in Chrysler’s approach and some loosening of the restrictions that GM previously put on agencies within Interpublic Group — GM is the company’s largest client — indicate to different degrees that the old “club rules” don’t necessarily apply anymore. Concerns about preserving long-standing agency and holding company arrangements have ceded to the knotty challenges these clients face. Each company fell into bankruptcy in the spring, reemerged with federal funding and new leadership, and now grapples with eroding market share and the difficulty of creating consumer demand amid a lingering recession.

“When there’s profound client change, that’s what happens,” a source said.

In this context, agency or holding company loyalty — even after holding companies stood by clients during bankruptcy — isn’t necessarily a top priority. Doing whatever you need to do to sell cars is. That said, sources point to the fraying relationship between Chrysler and BBDO/Omnicom in particular and suggest that a new “open-market” approach toward soliciting agencies is taking root. As one source put it, “A lot of clients are looking for fast-track results, so they’re willing to throw everything up in the air.”

Chrysler last week declined to comment on the changing dynamic and reiterated a statement that said in part, “As we launch a new company with a brand-focused organization, we are looking for fresh ways to communicate in the marketplace.” BBDO and the agencies participating in the process either declined to comment or did not return calls.

Chrysler’s fast-track bankruptcy ended in June when Fiat acquired a 20 percent stake and its executives assumed leadership roles. Fiat CEO Sergio Marchionne became worldwide CEO of Chrysler and 23 senior managers report to him, including executives in charge of Chrysler, Jeep, Dodge and Mopar (parts and service), according to sources.

Previously, marketing was steered by a single CMO. Under the new decentralized approach, the four brand chiefs have their own profit-and-loss responsibilities and the authority to hire and fire agencies, said a source. Ultimately, however, Marchionne can veto any move, the source added.

The changing dynamic between GM and IPG is more subtle. Historically, GM has insisted that IPG shops work on GM brands or no cars at all. But last month, when Volkswagen of America invited two IPG agencies — Deutsch/LA and The Martin Agency — to its $220 million review, GM raised no objections, partly because of VW’s relatively small market share, said sources. (Martin was cut from the contest last week, but Deutsch remains a contender, along with Omnicom units DDB and Goodby, Silverstein & Partners and independent Wieden + Kennedy.)

Some sources wonder if GM’s assent in this instance will come with a price, such as the client looking beyond predominant holding companies IPG and Publicis Groupe the next time it moves a brand assignment. One source, however, drew distinctions between GM and Chrysler, noting that many of GM’s marketing executives remain in place post-bankruptcy. “Chrysler got taken over by Fiat,” the source said. “I don’t think Fiat/Chrysler is the same as GM.” IPG declined to comment, and GM could not be reached.