Cadillac Account in Review; Modernista Will Not Defend

Move Seen as Financially Motivated

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DETROIT (AdAge.com) -- General Motors' Cadillac has started a review for a new creative ad agency, and incumbent Modernista, Boston, has decided not to participate, Brian Nesbitt, general manager of the luxury brand, said today in a statement.

GM has hired Ark Advisors as a consultant.

Since GM's exit from Chapter 11 bankruptcy this summer, the Detroit grapevine has swirled that Modernista was the odd agency out because it was independent, and that it would be replaced with a shop from one of GM's two main agency-holding conglomerates: Publicis Groupe or Interpublic Group of Cos. Pundits figured the leaner GM could no longer afford the luxury of a smaller, independent shop.

The move is financially related -- GM wants to cut fees, said a former GM exec, as Modernista had higher fees than other, longer-term agencies to the marketer. Other pundits said GM needed to move at least one of its remaining four core vehicle-brand accounts to show that it was indeed a "new" GM.

Modernista also handled GM's Hummer account. But Modernista's fate on that account is hazy as GM CEO Fritz Henderson said earlier this week he expected a sale of that brand to close by year's end. Modernista is losing one of its biggest fans inside GM: Mark LaNeve. Mr. LaNeve, the VP-sales who had, until mid-summer, also overseen all advertising, is leaving the automaker next week.

"We are extremely proud of the work we created for both Hummer and Cadillac," Modernista said in a statement. "We feel it ranks among the best, if not the best work in the automotive category.