DETROIT (AdAge.com) -- The U.S. Navy has awarded its $146 million account for recruiting to incumbent Campbell-Ewald -- a huge win for Chevy's agency-of-record, which has been on the front lines in the war on marketing-budgets going on at GM.
The win for the Interpublic Group of Cos. agency comes a year after the Navy decided not to exercise its option to renew its contract with the shop and sought competing bids. And it comes six months after the agency reduced its staff by 10%, due to drastic budget cuts at Chevrolet and the departure of other agency clients such as Farmers Insurance.
At the time, a Navy spokeswoman said the decision to put the account in review reflected the increasingly challenging recruiting environment and the need to reach a younger generation in new ways, hardly an overwhelming endorsement of the Warren, Mich.-based agency. But today it issued a statement that said the agency beat out four others for the account.
In the year that has passed since the Navy put the account in review, its recruitment situation seems to have improved, however -- a fact commonly attributed to the deterioration in the economy. But recruitment success could see budgets for marketing reduced. In early May The Washington Post reported: "The administration proposes trimming such costs [on military recruitment] by almost $800 million in 2010. The funding was more than doubled to $7.7 billion between 2004 and 2008, but the administration says that now that the military services are meeting and in some cases exceeding their goals, the funding can be cut."
Campbell-Ewald has handled the Navy since 2000 and in October 2005 won a one-year contract that was renewable annually for as many as five years.
Annual recruitment spending by the Navy on measured media was about $30 million in 2008, but a large chunk of all the military services' ad spending goes to unmeasured media.
In a statement, Campbell-Ewald highlighted its work in taking the Navy digital, creating sites on Facebook, YouTube and Twitter and launching an online community for mothers of servicemen and -women called Navy For Moms.
The current contract contains four additional one-year options. If they are exercised the account is estimated to be worth a whopping $806.5 million over the next four years.