"It's no secret GM has been looking at these brands as a channel. It's a strategy they have," Rich Stoddart, president of Burnett, Chicago, told Advertising Age. The agency piece of the equation was the only part not aligned, he noted.
Ends long run on Buick
Interpublic Group of Cos.' McCann Erickson, Birmingham, Mich., has been Buick's agency since the 1950s. Sibling Lowe, New York, got the GMC account from McCann in the late 1990s; Lowe also handles Saab.
Although the automaker has been shaking up its once-stable agency roster in the past year, GM's decision to park the newly combined business at Burnett's Troy, Mich., office stunned industry observers. Just over a year ago, GM yanked its $225 million Cadillac account from the shop and moved it to Modernista, Boston, without a review. Burnett did hold on to GM's Pontiac national creative account, which spent $147 million in U.S. measured media last year, according to TNS Media Intelligence.
On top of that, Buick and GMC are in the midst of launching sibling crossover models, which are in one of industry's fastest-growing categories. Buick launched the new 2008 Enclave crossover last month as the brand scales down its offerings. McCann created the campaign that aims to attract buyers in their 40s to mid-50s.
Lowe created the launch campaign for the GMC Acadia crossover, which launched on national TV in January during the Golden Globe awards.
"We have two outstanding advertising companies that handle the majority of our work. This change is purely an operational business decision that we made to further strengthen our retail-channel strategy by consolidating the advertising creative work for all of the brands in that channel," said Mark LaNeve, GM North America's VP-sales, service and marketing. "It is in no way a reflection upon the relationship or the work that McCann Erickson has done for the Buick account and that Lowe has done for GMC. In fact, GMC is a strong brand and has been one of the great automotive success stories of the past decade. Buick is in the middle of revitalization and the new Enclave crossover is experiencing an outstanding launch."
Pitched Saab after Cadillac loss
After losing Cadillac, Burnett made a quiet pitch to Saab earlier this year, executives close to the matter told Advertising Age. Saab's general manager at the time, Jay Spenchian, knew Burnett from his days as marketing director of Cadillac, but he was moved two months ago to the newly created North American post of executive director of strategy and revenue management for GM's vehicle sales, service and marketing organization.
Officials from all parties involved denied earlier this year that Burnett made a Saab pitch, but the move shows Burnett's willingness to aggressively pursue more GM business. Mr. Stoddart declined to comment on the matter today, as did Lowe.
And if relationships count, Burnett also knows Jim Bunnell, who became general manager of Buick-Pontiac-GMC about six weeks ago after two years as a regional general manager. But prior to that, Mr. Bunnell worked closely with Burnett and its predecessor shops on Pontiac, where he rose to general marketing manager from a brand manager on Grand Am and Sunfire.
He said in a prepared statement that "although we have made a lot of progress to date in aligning these three brands as a single channel, we still have work to do. It's time to move to the next level, and we believe that having one dedicated agency will help us get there effectively and efficiently."
Speculation on compensation
It's also no secret GM has been cutting costs in North America as it tries to return to profitability in its home market. Industry experts are speculating Burnett offered an aggressive compensation package that GM couldn't refuse. A GM spokeswoman declined to comment.
Mr. LaNeve announced GM's new vehicle brand strategy two years ago, saying Chevrolet and Cadillac would be its anchor brands at opposite ends of the value spectrum. He said Buick, GMC, Pontiac, Hummer, Saturn and Saab will be cast as specialty brands with limited product lines so that they won't offer, say, competing minivans or sport-utility vehicles built on the same platforms.
In the meantime, Burnett's core team for Buick-Pontiac-GMC will be based in the Detroit area, a GM spokeswoman said. She added the account will also utilize Leo Burnett's and Publicis' various offices around the country, including Chicago, although she gave no further details.
Mr. Stoddart said details on staffing and office locations are still being worked out.
The estimated $150 million regional dealer account for Buick-Pontiac-GMC was not part of the move and remains at a joint venture of McCann's Jay arm with Burnett's Martin unit. The GM spokeswoman said she couldn't speculate on any future changes regarding that account.