VW Delays $500 Mil. Media Decision

BOSTON Volkswagen will not name a winner in the review for the media portion of its $500 million North American ad account until at least next week, according to sources.

The automaker had been expected to name either Havas’ Media Planning Group or Grey Global Group’s MediaCom this week at the North American International Auto Show, sources said.

VW senior management in Germany wants to consolidate with MediaCom (which handles VW overseas), but will continue internal discussions about the matter after lobbying from VW of America officials who wish to stay with MPG (the North American media incumbent), sources said.

The agencies either declined comment or referred calls to the client, where officials could not be reached.

MediaCom was favored by VW following initial presentations, sources have said [Adweek Online, Oct. 6]. MPG, however, gained a “second chance” in a new round of talks, granted after Havas executives implored VW for another opportunity to prove it should keep the business [Adweek Online, Nov. 4].

Neither MediaCom nor MPG is scheduled to meet again with VW; current discussions involve top brass from both sides of the Atlantic, and include VW’s global CEO Bernd Pischetsrieder, sources said.

Some discussions among high-level VW officials took place this week at the Auto Show in Detroit, and will continue next week in Germany, sources said.

VW procurement executives launched the evaluation in the fall, seeking cost efficiencies.

The loss of VW media could be a devastating blow to Paris-based Havas, which this week parted with 14-year client Intel, which is in the process of reviewing its $300 million-plus global ad account [Adweek Online, Jan. 11].

Sources said Havas would not immediately slash staff or close offices as the Intel transition will take several months. (Agency teams from Interpublic Group, Omnicom Group and WPP Group remain in contention for Intel.)

The delay in the VW media review’s resolution comes as VW and NBC Universal enter into a multi-year global marketing alliance.

As part of the deal, Universal will incorporate VW’s products and brand in its films, DVDs, worldwide theme parks and other entertainment properties, the companies said yesterday. Additionally, VW will support numerous media and entertainment-related properties of NBC Universal through international promotional efforts. Both companies plan to develop mutual marketing programs. Terms were not disclosed.

“This will represent one of the largest and most comprehensive alliances in the entertainment industry and prepares the ground for new ways of reaching consumers on a global scale,” said Pischetsrieder.

The initial focus of activities will be on the U.S. and European markets where Universal will have access to a wide range of VW products for all prices and age groups, with approximately 20 different models under the VW brand.

—with Karl Greenberg and Jack Feuer