Ed Sheehy, director of marketing for Nissan, said the pact shifts the Playa del Rey, Calif., agency's compensation from an exclusively fee-based arrangement to one that also includes performance bonus incentives.
"We look on [ TBWA/Chiat/Day] as our partners," he said, adding that the pay-for-performance incentive "link their objectives to our objectives. They have the opportunity if both of us hit our objectives to earn a little more money than last year."
AD FOCUS SHIFTS TO KEY PRODUCTS
The new contract comes as Nissan shifts the focus of its advertising in two big new campaigns. After three years of an unsuccessful corporate branding drive, the automaker is putting the focus on its key products.
Nissan today launches a $100 million campaign for its 2000 Maxima sedan and a separate $60 million effort for its back-to-basics sport-utility vehicle, the Xterra.
Mr. Sheehy said the advertising will roll out under a yearlong plan developed in conjunction with Nissan dealers and TBWA/Chiat/Day.
Nissan plans to increase its ad budget this year. Competitive Media Report puts its 1998 spending at $454 million.
The consistency of this two-model effort represents a change from the past, when Nissan frequently dropped new-product advertising after an initial launch.
But, "For the last year and a half we focused on a deal rather than a product," Mr. Sheehy said, referring to a flurry of rebates and lease rates designed to clear inventory.
That strategy saw some success, with sales improving by 9% for May 1999 compared to the same month last year.
Nissan faces further changes as Renault begins to insert itself into the operations of the Japanese automaker it rescued financially.
Mr. Sheehy now reports to Jed Connelly, new VP-general manager of the Nissan Division. He recently succeeded Michael Seergy, under whose guidance Nissan design chief Jerry Hirshberg was brought out as an ad spokesman to provide a branding link among product commercials.
With the new campaigns, Nissan will use Mr. Hirshberg as a prologue, similar to appearances by the late Walt Disney, who spoke at the beginning of his TV programs to provide a little behind-the-scenes explanation of what was coming next, according to Robert LePlae, account director on Nissan at the agency.
FOCUS ON SPORT-UTES
The campaign's launch spot features Mr. Hirshberg discussing topics such as how the SUV market has strayed from its roots and moved upscale with luxury touches or to toylike vehicles, such as Toyota's RAV4.
In the week of June 14, that spot will be followed with two distinct campaigns. The Xterra effort, targeting to 24-to-39-year-old males, focuses on mountain biking, snowboarding and enthusiasts of other rugged outdoor sports who frequently are first-time new car buyers. That segment is currently served by Isuzu's Rodeo.
The car's features include a first aid kit, an interior bike rack, cargo hooks and an interior "mud basket" for wet equipment; some of the features get circled in red to highlight them in one spot.
A second execution, also scheduled to run in theaters, talks about what to do when taking a "sick day" off from work.
The 2000 Maxima effort, targeted to 40-year-old males with incomes of $80,000 and up, shows the car with copylines such as: "Seconds it takes to fall in love: 2."
Those spots, as well as print ads, end with the line: "Cars like it: 0."
Both TV campaigns end with the Nissan logo and the word "Driven."
The launches will be followed in October with another big push, for the face-lifted Altima sedan. Those commercials also will be introduced by Mr. Hirshberg.
The new marketing effort includes a major shift to magazines, with 110 lifestyle and weekly titles added to the schedule, as well as continued advertising in enthusiast books.
"It's a big change. We will follow the consumer through the day," Mr. LePlae said.
The last time Nissan was a major player in the consumer magazine segment was 1992, when it launched the original Altima.
The move into cinema advertising is a first for the advertiser.