The agency has reduced staff in the last three years and last December eliminated its entire level of group creative directors. "There's a lot of pressure from the client to keep costs down," says a former Saatchi executive.
Toyota is spending more with Saatchi's sibling, Conill, on Hispanic advertising, and hired Ground Zero, Marina del Rey, to do an estimated $10 million youth project last summer. Saatchi also lost a pitch in 2000 to retain the estimated $70 million Southeast Toyota Distributors account of dealer groups in five states. Toyota hired Attik, San Francisco, as its agency for traditional ads to launch the youth-targeted Scion.
Rich Anderman, chief operating officer-managing director at Saatchi, says of the five eliminated group creative directors that the agency "wanted more creatives working more entrepreneurial. We don't need as many people managing groups. We need people managing ideas." Deborah Wahl Meyer, corporate manager-marketing communications at Toyota Division, says that "Saatchi looked at what it needed to do to keep moving all the ideas forward and decided to restructure."
Ms. Meyer asserts that Saatchi "is really delivering" for Toyota and "our relationship is very strong." But she declines to comment on Saatchi's billings.
Toyota started a "layered media" approach in the past year or so, using a blend of traditional and non-traditional media to reach consumers when they're in the market for a new vehicle, Ms. Meyer says. For example, she notes, her group brought in Omnicom Group's Rapp Collins last year to "take direct to a new level." Internally, Toyota moved staff who worked on events and interactive into her marketing communications area to bring consistency to the team, Ms. Meyer says, adding, "Saatchi has a team to match."
Toyota Division plans to do another youth-oriented project with Ground Zero, she adds. Toyota Division spent $533 million in measured media from January through September 2004 and $638 million in calendar 2003, says TNS Media Intelligence. But despite that level of spending, industry experts complain that the division's advertising is generally lackluster, with only bits of brilliance.
"Toyota sells a ton of vehicles in spite of its advertising," says an industry consultant. However, the automaker doesn't just need advertising pros, but marketing specialists who can develop strategic product positions, says a former Toyota manager.
too much churn
Four former Saatchi staffers say part of the problem is that Toyota rotates non-marketing staffers into the top marketing job every few years, which sometimes results in new ad directions. (Other carmakers also rotate their people into marketing jobs.)
Toyota last fall changed its ad tag to "Moving forward," its third theme since 1997. But two of the former Saatchi staffers say that tag seems to be forced into the ads and is being used without context, a failure one of them says also occurred with the "Everyday" tag.
Jim Lentz became group VP-marketing at Toyota Division in 2004 after being VP-marketing since late 2002. Mr. Lentz admits the earlier post was his first marketing job, but he disagrees with critics. "If you look at the intent of [our] national advertising, and that really is to develop awareness and consideration for the product, our levels are at record highs," he says, adding that the six-month purchase intentions for Toyota cars are the highest in the industry.
Toyota measures as many as 25 different items for its marketing programs, set during the initial strategy sessions for launches, says Mr. Lentz. Seven months after major launches, Toyota evaluates the programs in a process dubbed PDCA, or plan-do-check-action. "We take a look at what the plan was and what did we do. We check it and then we make revisions," Mr. Lentz says. For last year's Solara launch, Mr. Lentz went to Japan to present the PDCA review to top executives.
While Mr. Lentz declines to reveal the results of that launch, he says his team typically scores between 90% and 95% of its goals. Under kaizen-Toyota's corporate philosophy of "continuous improvement"-no one gets a perfect score because, he says, "if you get to 100%, you didn't challenge yourself enough. Our energy comes from the chase, not the accomplishment."
Team one lauded
Handling Toyota Motor Sales USA's luxury Lexus Division is Saatchi sibling Team One, El Segundo. Experts generally agree that Lexus has had more consistent advertising than Toyota. Since its arrival in 1989, Lexus has kept the same ad narrator and has only slightly changed its theme from "The relentless pursuit of perfection" to "The passionate pursuit of perfection." Lexus spent $169 million in measured media from January through September 2004, according to TNS.
Unlike Saatchi, Team One not only handles the luxury brand's national creative but all its regional dealer ad groups, which gives Lexus ads a more uniform look.
Scion spends less in traditional media since its main mission is to reach young male influencers.
As if dealing with a perfectionist carmaker weren't stressful enough, Toyota Motor Sales USA's agencies also have to keep an eye out for foreign competition. Japanese agency giant Dentsu has been trying to get its foot in the door with Toyota in the U.S.
Dentsu partnered with Ground Zero for Toyota's 2004 youth project. Also last year, Dentsu acquired Toyota agency Oasis Advertising, New York, and changed its name to DCA Advertising. DCA handles Toyota Motor Sales North America's corporate account, which is mainly print.