NEW YORK (AdAge.com) -- Omnicom Group's GSD&M Idea City and BMW are ending their five-year relationship. The parting comes on the heels of the death this summer of BMW's VP-marketing of North America, Jack Pitney, a longtime advocate for the shop, and just over a year since the agency won a pitch to handle global brand marketing for the automaker.
The split is effective Dec. 31, when the agency's contract on the nearly $140 million account is up. It's not clear whether the car maker was planning to renew. An agency spokesman declined to talk about reasons for the split, and would say nothing beyond this statement: "You reach a point in a relationship that it's best to part ways." BMW did not return calls for comment by press time.
Agency insiders who were present at a meeting called this morning to share the news said staffers were told that the agency initiated the split. Chairman Roy Spence, President-CEO Duff Stewart, Senior VP-Chief Strategist David Matathia, who's also the account head on the BMW business, broke the news. Among the reasons given for that decision: Relationships are no longer strong with the marketing team, particularly in the wake of Mr. Pitney's death; the agency wasn't making enough money on the account; and there wasn't an opportunity to do the kind of work the agency had hoped to undertake.
During the meeting, Mr. Stewart was said to have stressed that the breakup with BMW would not lead to any staff cuts.
It's unclear how much Idea City's portion of the account was worth in revenue, but in billings, BMW spends a significant amount. In 2009 in the U.S. alone, the automaker devoted $138 million to domestic measured media, and its on track to surpass that this year, having spent $83 million in the first six months of 2010 alone.
The exit of BMW follows a significant loss for the agency last month, when media duties for MasterCard were consolidated at Universal McCann. Other GSD&M clients include Southwest Airlines, which was voted the audience favorite in Ad Age's Marketer of the Year special report last week, Ace Hardware, Kohler and Goodyear.
It's unclear how soon the marketer plans to replace GSD&M, and if it will conduct an agency pitch to find a new shop. The car maker currently works with agencies at an array of holding companies, including WPP's Grey; Dotglu, an arm of MDC Partners' Kirshenbaum Bond Senecal & Partners; and Interpublic Group of Cos.' Universal McCann, which handles media duties.
GSD&M won national creative duties for BMW in November 2005 after a pitch Mr. Pitney called just two months after taking over marketing duties. The agency shocked everyone in May 2009 when it was entrusted to handle the German car maker's worldwide ad account, despite being a U.S. shop without much global experience.
At the time of his death, Mr. Pitney oversaw marketing and product development for the BMW brand in the U.S., but was set to assume a new job as VP for BMW's eastern region, the car maker's largest U.S. sales zone. He was long viewed as the leading champion at BMW for GSD&M, having been close with the agency's staffers.
Back in 2006, he presented alongside Mr. Spence at Ad Age's Idea Conference. In an interview earlier this year, he boasted that GSD&M had taken an expanded, global role in BMW's marketing: "The [new] 'Joy' campaign is a global campaign, and I'm proud to say our agency, GSD&M, pitched and won the global BMW business. This is the first time that BMW has had one agency on a global level."
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Contributing: Rich Thomaselli