Michael Browner, executive director of media and marketing operations at the auto giant, said he'd have no objections since General Motors Planworks, Detroit, was built specifically for the automaker. So, should Publicis try to duplicate the agency for a client in another industry, "the specifics would have to be customized," he said. Planworks could not, however, take GM's proprietary research, certain proprietary tools nor "pirate our key people" to any new dedicated shop for other clients, he added. "Anything developed for us is ours."
Dennis Donlin, president of Planworks, said his agency's techniques, organization and philosophy could be "integrated out" to Publicis' Starcom Mediavest Group. "There are very high-level discussions whether this is a viable model for other brands as a dedicated planning division, mostly for clients that are not yet unbundled," said Lena Peterson, VP-director of marketing communications at Starcom Mediavest Group. "You can pursue bundled clients that want to keep the buying where they are."
Finding interested clients could be tricky, however, since so few marketers have dedicated planning shops. "A lot of clients want to get planning for free," said Lou Schultz, a media agency veteran who helped Interpublic Group of Cos. win GM's dedicated media buying business in 1993. Mr. Schultz, who now has his own marketing and media consultancy, LMS Unlimited, said dedicated media shops can be profitable; it just depends on the contracts they cut with marketers and management at the holding company. Charlie Rutman, president of Aegis Group's Carat USA, New York, said media agencies dedicated to a sole client "become, in my opinion, analogous to an in-house media department as opposed to an out-house agency. From a client perspective, there's unbelievable control." Dedicated agencies only have one profitability channel since their incomes depend on sole sources, and multi-client media agencies like Carat, he said, benefit as staff is exposed to learning and information from a wide variety of marketers, their different targets and different media uses.
Both GM and Planworks said the agency has been a success.
Mr. Browner said GM is "getting far more" and spending less than the sum total it paid 17 agencies before Planworks was formed in December 2000 "because our plans are more effective." The automaker has gained considerable knowledge about developing media plans from working with Planworks' research and planning teams, he said.
Planworks has also added considerably more GM accounts. The biggest chunk, awarded last year, is GM's so-called local marketing groups, its name for regional dealer ad groups, accounting for close to $1 billion in billings annually.
The agency now has more than 600 of the groups, Mr. Donlin said. As a result of the growth, his staff has grown from 130 people to nearly 280. Both billings and revenue rose by nearly 65%, he said.