Behind the Chevrolet Shift: Publicis Didn't Rate a Callback

GM Marketing Chief Joel Ewanick Made Switch Before Meeting With Incumbent Shop

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NEW YORK (AdAge.com) -- As one person close to the situation put it, Chevrolet was "the Christmas present that never arrived" at Publicis. But it seems Santa never even glanced at the list.

It had only been a month since Publicis had been awarded the $600 million Chevy account when hotshot marketing chief Joel Ewanick arrived at General Motors Co. off a shockingly brief six-week stint at Nissan. The first clue that things were awry came when Publicis executives -- including holding-company chief Maurice Levy -- tried to contact him in the days after he joined and their calls went unreturned.

They remained unreturned until after Mr. Ewanick had shifted the entire Chevy brand to his friend Jeff Goodby's agency, Goodby Silverstein & Partners. And although some 15 Publicis executives were in Detroit working on focus groups with Chevy team members as Mr. Ewanick put the changes into motion, he did not meet with any of them.

Mr. Levy was giving a speech at a business school in Paris on Friday evening and was unable to return calls for comment by press time. Several other top executives declined comment.

But it's not hard to imagine the frustration considering the support Publicis Groupe was asked to provide GM through its bankruptcy (at one point in June 2009, the holding company capped its financial exposure to the bankruptcy at $78 million). Mr. Levy, moreover, is hamstrung by the fact that GM is one of Publicis' biggest clients -- Leo Burnett, Digitas and Starcom all have major GM assignments, and Publicis-backed Bartle Bogle Hegarty is new to the roster on the Cadillac account.

Publicis has a contract that expires at the end of May from the project it was awarded for Chevy during the Olympics. At the time of the account move to Goodby, contract negotiations were still taking place at Publicis for Chevy work that was at Campbell-Ewald -- itself dropped for Publicis after 91 years.

Internal memo
The sting was bad enough that Publicis USA Chairman-CEO Susan Gianinno vented her dismay at the situation in a frank internal memo to agency staff obtained by Ad Age. "One thing I know for sure is that Chevy has lost something in this decision," she wrote last week. "I am not saying they will fail; or that the agencies they will work with are bad. I am saying that they were disrespectful in this decision. It was made without a thoughtful review of what we were doing or had planned. It was made without meeting any of us. That just isn't right. But things are not always right and fair."

True, Mr. Ewanick inherited the shop from his predecessor. And it's clear that if he was planning on moving the account, it was best to do it before Publicis had fully immersed itself in the business and hired staff. Yet the break was managed unconventionally, to say the least.

"It's not uncommon for a new CMO to bring in a new agency -- but best practice is [to] at least meet with the current agency first," said one prominent industry search consultant. "The way that it was handled was poor and goes to show that, overall, this is still very much an ego-driven business. If I was any other roster in the agency, I'd be worried about being disposable too."  Ad Age was told Mr. Ewanick would not be available to comment on his decision for a period of 30 days.

The shift last week is a testament to the power of relationships in adland, but perhaps more importantly a lesson in not burning bridges with clients. Even after Goodby was dumped by Hyundai last year for in-house agency Innocean, Mr. Goodby has publicly described his relationship with Mr. Ewanick as friendly.

Long relationship
Of course, the two go back a long way and have a history of ad successes on car brands. Twenty years ago, in his first marketing post as general manager-marketing at Porsche, Mr. Ewanick tapped Goodby to reverse a decade of declining market share.While some question the handling of the situation by Mr. Ewanick and GM, the decision to hire Goodby to help the ailing Chevy brand is one industry executives hail as a smart one. "If you're going to be a game-changer, it's a smart move because they've done great work in the past, they came up with the [Hyundai] assurance plan together, and it was copied by everybody, including Chevy," said the search consultant.

Goodby will have to quickly beef up staff beyond its current 575 and add a Detroit office (see sidebar). It is helped somewhat by the fact that it's worked with GM before, on the Saturn account between 2002 and 2007.

The challenges on Chevy are steeper though, and Goodby will need to hit the ground running with some clever work in order to give the brand the sales boost it needs. Chevy cars and trucks sold 1,338,612 units in 2009, down from 1,790,519 in 2008, which translates into a 0.8 percentage point market share loss in the past year, according to the Automotive News Data Center

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Contributing: Rich Thomaselli, Michael Bush

Goodby's move to Detroit

Detroit, which has been devastated by job losses over the last decade, including thousands in advertising and marketing, is prepared to welcome Goodby, Silverstein & Partners with open arms.

The agency plans to open up shop in the area now that General Motors, in a stunning switch, anointed the San Francisco shop agency of record status for U.S. advertising work on the $600 million Chevrolet account. Goodby plans to open an office in Detroit. "We do not know yet how many employees we will need to hire, or where we will house them," Christine O' Donnell, Goodby's director-agency relations told Crain's Detroit Business, which estimates the office could house up to 75 staffers. If past history is any indicator, though, it might be less: When Goodby had the Saturn account for GM, it had about 30 staffers dedicated to the business across four field offices.

No matter how small the number, the news was enough to energize downtrodden Motor City. "It's exciting news," said Wayne County Executive Robert Ficano. The city of Detroit and its population of 900,000 is located in Wayne County, but the Detroit metro region consists of six counties with more than 4 million residents. "Any movement into the region is a plus."

According to the University of Michigan and government data, jobs in Detroit peaked at 2.2 million in April 2000. A decade later, that number is down to 1.7 million. The loss of 500,000 jobs has included many in the ad industry, including BBDO when it lost the Chrysler account, PHD and the downsizing of Leo Burnett. Last year more than 100,000 more people left the state than came in.

But University of Michigan economics professor Donald Grimes said he sees a turnaround and believes this is more than just a swap of Goodby for (essentially) Campbell-Ewald, the shop that had Chevy for 91 years before it was moved oh-so-briefly to Publicis and now Goodby. "I think the old agency will diversify and even if they downsize, there are likely to be a large number of employees to remain in the state. ... And I think the new agency will also seek out new business in the state as time goes by."

Campbell-Ewald declined to say if it will downsize any of its 1,100 employees due to the Chevy loss, but the agency isn't leaving its Michigan headquarters. In a statement, C-E chairman-CEO Bill Ludwig said, "We will continue as one of GM's family of agencies working on GM customer- relationship marketing, OnStar and local marketing efforts for Chevy dealers. We will also work with Chevy's new agency in the transition over the months ahead."

-- Rich Thomaselli


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