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Chrysler and BBDO Said to Be Parting Ways in 2010

Spending Decline, Fourth-Quarter Review Factors Contributing to Likely End of Longtime Agency Relationship

By Published on .

DETROIT (AdAge.com) -- BBDO, which managed to survive a turnover of owners and CEOs at Chrysler this decade, will part with its longtime automotive client when its contract expires at the end of January, according to an executive close to the matter.

BBDO did create a new regional TV spot for the Chrysler 300 sedan that may break, but the marketer may be merely fulfilling a contractual guaranty.
BBDO did create a new regional TV spot for the Chrysler 300 sedan that may break, but the marketer may be merely fulfilling a contractual guaranty.
A spokesman for BBDO denied that, saying the Omnicom Group agency has been negotiating with Chrysler on a new contract since the automaker exited Chapter 11 bankruptcy proceedings in June. On the table, he said, is cutting back the broad scope of services BBDO provides, including dealer training, call centers, point-of-sale materials and database management.

Chrysler did not return calls or e-mails by deadline; the automaker earlier said it is in a quiet period until Nov. 4, when it will roll out its new five-year business plan. But Chrysler, which is now 20% owned by Fiat, has a new top marketing executive, Olivier Francois, named last week to succeed Michael Accavitti, who himself had held the post for only four months. According to a second executive, Chrysler and Fiat CEO Sergio Marchionne participated in a contentious meeting about 10 days ago that included Andrew Robertson, CEO of BBDO Worldwide, and Joe Garcia, president of BBDO Detroit in Troy, Mich., though the substance of the conversation was unclear.

BBDO stuck with the automaker through its government-prepared bankruptcy reorganization this summer, only to be told that the automaker would be reviewing all its fourth-quarter work. Subsequently, Publicis & Hal Riney, San Francisco, has been tapped for one assignment and independent Richards Group, Dallas, was given charge of the Dodge Ram truck brand. Chrysler's longtime diversity agency, GlobalHue, Southfield, Mich., was given the general assignment for the Jeep work. Hal Riney did not return calls.

BBDO did create a new regional TV spot for the Chrysler 300 sedan and a new commercial for Chrysler's Town & Country minivan that may break soon. But the marketer may be merely fulfilling a contractual guaranty for specific levels of income to the ad agency.

Though a parting with Chrysler would be a psychological sting for BBDO -- it's ties to the account date back to 1944 -- from a financial point of view, it would not be a stunning blow. As of March, the automaker accounted for less than 1% of revenue of parent Omnicom (including shops beyond BBDO, the automaker also works with Organic for digital and PHD for media, for example). Moreover, the holding company has a number of other auto accounts within its fold, including Nissan, BMW, Mercedes-Benz and Volkswagen.

In the meantime, Chrysler's spending has plunged; U.S. measured media spending fell 35% to $1.1 billion last year vs. 2007, according to TNS Media Intelligence. Chrysler's ownership changes, along with management shifts and industry woes, have taken their toll on the morale at BBDO's suburban Detroit office. Earlier this decade, it employed 1,200 people but currently has just 450 staffers after several rounds of cuts in recent years.

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