Hyundai Gives Its Goodbye to Goodby

LOS ANGELES “It’s still pretty friendly” between us, said Jeff Goodby, hours after learning last week that Hyundai Motor America is shifting its creative from Goodby, Silverstein & Partners to the World Marketing Group (WMG) joint venture between HMA and Korean sister automaker Kia. “But it’s all pretty frustrating.”

Goodby, principal and CCO of the Omnicom agency, of course knows the game well. “You have to be resilient,” Goodby added. “If you can’t accept that, you’re in the wrong business.”

Clearly Goodby is among the automotive agencies suffering diminishing tenure: From 1991 until Isuzu withdrew from the consumer market in 2002, the agency had Isuzu as a client; from 1993-98, it had Porsche; and from 2002-07, Saturn.

Goodby will handle Hyundai through the first quarter of 2009, including the next Super Bowl spot for the Genesis coupe, according to Joel Ewanick, HMA’s vp of marketing, Fountain Valley, Calif. In addition, it might keep the online work and be called in for post-contract creative throughout 2009, Ewanick said. That would bring Goodby’s formal run with Hyundai to about two years — assuming the agency doesn’t develop a conflict in the interim. (HMA has made it clear to Goodby that it may now compete for new car business.)

Ewanick denied that Goodby’s creative was at issue. Sources agreed that WMG’s related marketing arm throughout the non-U.S. world, Innocean, is probably cheaper, not better. Ewanick acknowledged that “at the end of the day, it is more about the need to move and talk with one voice around the world; [it’s] a corporate strategic decision. A small percentage of that has to do with money, zero percent with Goodby.”

Ewanick added that the global strategic consolidation was probably inevitable. In any case, there was writing on the wall. In May, Irvine, Calif.-based WMG — which was involved in the consolidation of Hyundai and Kia media with IPG’s Initiative in January — hired Jim Sanfilippo, who had worked on Hyundai at Bates and for Kia as vp of marketing, and most recently was CMO at WPP Group’s Team Detroit, to be evp and COO under CEO William Y.W. Lee.

Five-year-old WMG, a subsidiary of Hyundai- and Kia-backed Innocean outside the U.S., handles both automakers’ media accountability, events and creative media planning. Innocean also handles Hyundai creative in some parts of the world.

Commenting on the agency switch, a variety of observers cited the inclination of automakers seeking irresistible deals with smaller or independent shops, including Traffic (Mitsubishi), Butler Shine Stern & Partners (Mini), Cramer-Krasselt (Porsche), David & Goliath (Kia), Venables Bell & Partners (Audi) and Siltanen & Partners (Suzuki).

“The trend is going toward a seasoned creative supervisor and pulling in lots of freelancers,” said a source. “That’s how Dentsu has handled it in Japan for years. That’s why when they get an award at Cannes, nobody knows who should get the credit.”

“When I was [president] at FCB in San Francisco, the cost structure, especially real estate and salaries, were higher,” said Ian Beavis, a former marketing chief for Mitsubishi and Hyundai sister Kia. “And the business taxes are even higher in San Francisco than in Los Angeles. You start with a disadvantage.”

“It’s a trend that agencies may have to adjust to,” added Goodby. “If it’s true that smaller, aggressive brands are going to smaller agencies, and if the numbers show that turns out to be successful, this will push automakers to be more aggressive and agencies to price themselves a little better.”

Other sources pointed to friction between cutting-edge creative and the multi-layered consensus required to sell work to car companies, where dealers pull the strings. One source added that Goodby “doesn’t want to play that car game.”