Chrysler At The Crossroads

Will Eberhardt keep the advertainment wheels rolling?

%%STORYIMAGE_LEFT%% Last month, Jim Schroer, exec VP-global sales and marketing for Chrysler Group's Dodge, Jeep and Chrysler brands, suddenly resigned. Schroer, 51, who joined the DaimlerChrysler unit in February 2001 from Ford Motor Co., has been a champion of leveraging entertainment properties throughout his entire career, long before it was fashionable.

Car companies have been at the vanguard of branded entertainment, and there has arguably been no more fervent an evangelist for the space than Schroer. Many in the Madison+Vine community wonder what Schroer's unexpected departure might mean for the company's entertainment efforts and at the same time speculate about his replacement: Joe Eberhardt, 39, previously the president-CEO of DaimlerChrysler U.K. Eberhardt arrives as the company is vowing a more hard-sell approach with its ads to boost summer traffic to dealerships.

A Chrysler Group spokesman said Eberhardt won't be available for comment for several weeks. However, several auto industry execs—all speaking under the condition of anonymity—speculated that Eberhardt would cut back on entertainment marketing in favor of more traditional ads with the U.S. unit under pressure.

One Hollywood advertainment maven, who requested anonymity, thought it would be business as usual. "The individual brand-marketing teams are firmly entrenched and all believe in the space enough where [Eberhardt] would be asking for trouble if he tried to steer them away from [entertainment-based initiatives]."

SCHROER'S LEGACY

What will Schroer's ultimate legacy at Chrysler be?

If Eberhardt does decide to shift the emphasis back to more nuts-and-bolts car marketing, many of Schroer's supporters will certainly argue that his vision was stymied by an unforgiving U.S. automobile market. His efforts in associating Chrysler brands with entertainment properties and personalities, such as Celine Dion, Aerosmith and the coming "Tomb Raider" movie, were mounted against the face of rising discounts and rebates for new cars in the industry that set off a price war that Chrysler refused to engage in, leaving it with more than 500,000 unsold models in dealer lots.

The Chrysler group had planned on a $2 billion operating profit in 2003, but in the first week of June the company announced that it will post only a slight operating profit, and expected a $1.2 billion operating loss in the second quarter. Chrysler group market share fell half of a percentage point to 13.8% as sales in May rose just 0.4%.

%%PULLQUOTE_RIGHT%% Although he couldn't be reached for comment at presstime, Schroer sat down with M+V for a one-on-one interview before his resignation at Chrysler's office on Park Avenue in New York, during which he spelled out his vision of entertainment branding.

DUAL-PURPOSES

It is a temperate one, rooted in the belief that Hollywood is valuable only if there is "dual-purpose" execution where image-building is balanced with robust traffic to dealerships and return on investment.

Ironically, Schroer was the architect behind the automaker's $14 million marketing deal with Dion, a three-year alliance that helped move units of the Canadian chanteuse's "One Heart," which was certified double platinum April 23, but obviously hasn't moved the metal for the carmaker. Chrysler sales dropped in the four months after the deal was announced.

Schroer, however, was upbeat about the Celine sponsorship. "We measured the hits we got when we announced the new Celine campaign, and we set several records on Chrysler.com. Three days later we had a million hits on the Web site. So we do get directional information that said 'yes,' this kind of thing is working…you don't get the direct correlation to that activity to sales, and I don't think we ever will in this industry."

Schroer also expressed these bedrock tenets in his branded-entertainment vision. "The trick to doing this stuff today is, No. 1, to have all the marketing people, agency and entertainment people in the system believe that doing these partnerships in the right way is important. And second, the brand marriage has to be real. If one brand benefits more than the other one, then it won't work. And three, there has to be authenticity and reality underneath it. Then we challenge the system and say be creative, go do that. Finally, I'm often fond of saying, if you can't leverage it in retail, don't do it."

He cited the Chrysler Million Dollar Film Festival— a program created to indoctrinate the filmmaking community into the opportunities presented by branded entertainment— as a program that "historically [has] been a good image builder in [the filmmaking] community, but the question is, can it do both jobs—build image and create store traffic?"

Unfortunately for Schroer, he will never have the opportunity to do any "dual purpose" testing. He was out at Chrysler—some say forced out—within a week's time.

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