Chrysler Considers Moving Media

Bozell Would Lose Significant Source of Revenue if Car Maker Acts

DETROIT–Chrysler Corp. is considering consolidating the media buying for its dealer advertising–worth some $450 million–at PentaCom, the BBDO Worldwide unit in Troy, Mich., that currently handles all of the automaker’s national media planning and buying, said sources.
Currently, dealer planning and buying is handled by Chrysler’s two brand agencies: BBDO, Southfield, Mich., which handles Dodge; and Bozell, also in Southfield, which handles corporate ads and the Chrysler, Plymouth and Jeep lines.
Chrysler’s discussions come on the eve of True North Communications’ Dec. 30 shareholders vote on its proposed acquisition of Bozell parent Bozell, Jacobs, Kenyon & Eckhardt.
A consolidation at PentaCom would mean combined billings of nearly $1 billion for the agency. Although Chrysler has long considered consolidating media, sources said the move is closer to fruition than ever before.
Jim Holden, Chrysler’s executive vice president of sales and marketing, confirmed that discussions have grown more serious recently.
“We talked about [a consolidation] during the original formation of PentaCom [in 1993], and we’ve continued to talk about it, but now [we are] doing some more in-depth study on it,” said Holden. “We’ve been looking at it to see what the efficiencies are, but also to look at the downside. The only reason to do this is if there’s greater efficiencies for all sides. If we’re able to convince ourselves and the dealers of that, then we proceed,” he said.
Jim Julow, Chrysler’s executive director of corporate marketing, and Jamie Jameson, its manager of media/advertising, are leading the talks, Holden said.
Bozell faces a potential loss of significant revenues if its dealer media buying assignment moves. Overall, the Chrysler business, including media, formed 24 percent, or $119 million, of Bozell’s total fiscal 1997 revenue of $495 million.
Publicis S.A. is already publicly opposed to TN’s approximately $440 million acquisition of BJK&E in part because, as the French agency’s proxy solicitation tells TN shareholders, “the Bozell merger significantly overvalues Bozell.”
TN chairman Bruce Mason could not be reached for comment. Mitch Engel, TN’s president of its Associated Communications Companies and corporate operations, said he was not aware of any intention by Chrysler to move dealer media buying from Bozell. Officials at both BBDO and Bozell’s Southfield offices said they were not aware of a plan to shift dealer media. PentaCom officials could not be reached.
–With staff reports