Publicis' Newest Digital Acquisition Roped Into GM Review

Big Fuel's Largest Account Under Scrutiny as Part of $3 Billion Media Pitch

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In a strange turn of events for Publicis Groupe , General Motors, the very client that made fast-growing social-media agency Big Fuel an attractive investment in the first place, is now considering other options.

Publicis Groupe CEO & Chairman Maurice Levy
Publicis Groupe CEO & Chairman Maurice Levy Credit: Julio Piatti

As if the holding company didn't already have a lot on its mind in the throes of GM's $3 billion media review -- the biggest of the year -- with its agency Starcom defending U.S. duties, there's now also the question of just what Publicis paid for in Big Fuel, if the shop were to lose GM's social-media business.

Ad Age has learned that the social-media piece which is handled by Big Fuel is under consideration as part of the recently announced review. GM is Big Fuel's biggest client and has helped, er, fuel much of the growth spurt that allowed the shop to quintuple employees, boost revenue and open a Detroit office.

A GM spokesman would only say: "We are doing a global media-buying and -planning review, but we're not going to comment on details or specifics of the review process." Representatives for Vivaki, which is the umbrella unit that houses both Starcom and Big Fuel, referred calls to Big Fuel.

"We're working with Starcom on the pitch. Vivaki is very much a collaborative organization and we're working to make sure the group keeps the business," said Avi Savar, founder-chief creative officer of Big Fuel.

Several industry executives have told Ad Age that the recent scrutiny of GM's agencies, creative, media and otherwise, are part of an initiative by the automaker to find ways to cut costs and identify efficiencies.

In mid-July, less than two months before news of the massive review, Publicis took a 51% equity stake in New York-based Big Fuel, with the option to buy the shop outright by 2014.

Big Fuel sibling Starcom has handled U.S. media buying and planning for GM since 2005. GM is also a major client for another Vivaki agency, Digitas, whose responsibilities include direct and digital marketing for Buick and GMC. Longtime adman Jon Bond, who serves as CEO and equity partner of Big Fuel, reports to Digitas CEO Laura Lang.

Big Fuel had more than 170 employees at the time Publicis's investment was announced, up from 30 in early 2010. Last fall, GM hired the shop, which prompted rapid hiring and a new office in Detroit to staff the business. Big Fuel's revenue this year was expected to hit $30 million, up five times from 2010 revenue, according to the statement announcing Publicis's investment.

Should it lose GM (and no business has been lost yet) Big Fuel would still share other clients with its Publicis majority owners: It's also social-media agency of record for T-Mobile and works for McDonald's, according to its website. There is too the possibility that the Big Fuel acquisition could turn out to be key to building a case to keep the GM account, given the client is after cost savings. Having its social-media shop within the fold may allow Publicis to better meet client needs while shedding costs.

Big Fuel is the most-recent acquisition in Publicis' streak of buying U.S. digital shops. It's also probably the cheapest. Publicis acquired digital agency Rosetta for $575 million earlier this year, after Razorfish for $530 million in 2009 and Digitas for $1.3 billion in 2006.

In March public filings, GM reported worldwide advertising costs of $4.26 billion in 2010, with the bulk going to media. In 2009, GM spent $3.37 billion on global media, according to Ad Age DataCenter.

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