Hyundai President-CEO Finbarr O'Neill said that Aegis Group's Carat North America needs to deliver more focused buys while also delivering savings on Hyundai's media. He also said the automaker is adjusting its creative, handled by independent Richards Group, Dallas.
Carat won the national buying and planning account from Cordiant Communications Group's Bates/West, Irvine, Calif., last January and later picked up $400 million in dealer business for both Hyundai and Kia Motors America. Until the shift of creative to Richards last year, Cordiant's Bates Worldwide had been Hyundai's sole agency since the brand's 1986 U.S. debut. Kia's media incumbent was Omnicom Group's OMD.
Mr. O'Neill said Carat bought "too much fringe stuff" on TV networks in 2002's fourth quarter, and that Hyundai is looking for a more focused buy of quality programming to reach its target audience, which he's confident the agency can do. "We are seeing genuine savings, but the danger when you unbundle media is it takes a much more focused effort to make sure the quality buy is there."
He said the marketer is expecting 10% savings on quality national buys from Carat, which "is not as much as some may have hoped." Carat promised media savings of 20% when it pitched Hyundai's national business, according to key dealers who attended a meeting with Hyundai and Carat executives last January. Hyundai has said only that the savings would be a double-digit percentage.
`servicing the account'
"We enjoyed an excellent upfront," said Tom Somerset, Carat's senior VP-group director on the account. He declined to comment on the quality or savings of the Hyundai buys, saying only "we know internally what we're doing and we are servicing the account."
Carat's national contracts aren't with Hyundai or Kia. They're with World Marketing Group, or WMG, a year-old entity that reports directly to South Korea. WMG, originally formed to audit Carat's promised savings, expanded its role last summer, when Peter Smith, WMG's strategic-planning manager, said, "We are basically the in-house media departments of Hyundai and Kia."
On the creative side, Mr. O'Neill praised Richards for an "excellent job overall," but said the ads "probably need to emphasize value a little bit more." The agency's first TV creative didn't spell out details of what Hyundai has called "America's Best Warranty," so the spots created last fall have just been fine-tuned to explain and give it more prominence.
Wally Anderson, Kia VP-marketing, said the automaker was "really pleased" with its fourth quarter buy from Carat and WMG.