DETROIT (AdAge.com) -- Chrysler isn't planning to participate in the TV upfront -- and it may continue life without the brand that carries its name.
The marketing team at the automaker, which is restructuring under Chapter 11 bankruptcy proceedings, has recommended to management that Chrysler stay on the sidelines of the annual TV buying ritual this year. "We need to be more flexible with media vs. long-term contracts without flexibility," said a spokeswoman.
Of the $707 million the marketer spent in U.S. measured media last year, nearly $144 million was in national broadcast TV, according to TNS Media Intelligence. What will be the effect of Chrysler sitting out the upfront? An earlier analysis of TNS figures by Ad Age found that even the most exposed of the networks, Fox, received only about 1% of its dollars from Chrysler last year.
Still, Chrysler, kept afloat since December by federal loans, has drastically slashed ad spending this year, and the government's auto task force cut in half its request to spend roughly $134 million for advertising during the expected nine-week period in bankruptcy court. Chrysler filed for bankruptcy April 30.
The company did get some good news last week when U.S. Bankruptcy Judge Arthur Gonzalez approved its request to sell almost all of its operations to a new company formed in alliance with Fiat called Chrysler Group. But that instantly turned sour when a trio of Indiana state pension funds decided to appeal the judge's ruling. Attorneys for the funds claimed the U.S. Treasury overstepped its power by financially favoring Fiat and Chrysler's unions over bondholders. An appeals court upheld the sale and ruled the deal could close today, but the investors are expected to appeal to the Supreme Court, which could stay the closing beyond today.
Fiat, however, seems confident the deal will go through. It has asked Chrysler to tweak a new TV commercial, "Bright Future," created before the bankruptcy filing, to talk about the alliance with the Italian carmaker. And an executive familiar with the situation said that Fiat is already studying whether to keep the Dodge, Jeep and Chrysler brands and might well eliminate the last. The Chrysler spokeswoman said although she herself had heard that talk, it's premature to speculate on whether it will happen. Chrysler executives themselves considered killing off the Chrysler brand earlier this year but finally opted to keep it.
What does seem certain about Chrysler's marketing plans is that they are uncertain. The automaker's next major product launch is due in late summer or early fall, the all-new heavy-duty Dodge Ram full-size pickup. But the spokeswoman said, "We don't know if we'll have media" for the introduction. Omnicom Group's BBDO Detroit, Troy, Mich., handles creative; sibling PHD has media; and Organic does the digital piece.