Editorial - GM to Publicis: Loyalty matters

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General Motors Corp., in publicly calling Publicis Groupe on the carpet this month, was speaking for all big advertisers uneasy about where they stand in the unending consolidation of the agency business into fewer and bigger multi-network holding companies. In this more confined agency world, big spenders like GM, which once demanded loyalty from their agencies, now expect holding company management to deliver on that promise-or else.

GM erupted after Saatchi & Saatchi, the part of the Publicis empire that services GM arch rival Toyota Motors Sales USA, landed a top GM executive to run the Saatchi office responsible for Toyota. While executives often jump from car company to car company, this was different. Plainly, GM, which spends hundreds of millions of dollars through other Publicis units, saw Saatchi's Toyota problems being solved at its expense, and wondered where its "partners" at Publicis were when this hire was approved. It would be surprising if other big advertisers, constantly weighing their place in the sprawling agency holding companies they now employ, aren't wondering if the same might happen to them.

When he acquired Bcom3 Group and its important GM accounts (Cadillac, Pontiac and media planning for all of GM), Publicis Groupe CEO Maurice Levy gambled GM would stay put inside a holding company that also served Toyota and Renault. Former Interpublic Group of Cos. CEO John Dooner made the same bet when he put PepsiCo agency Foote, Cone & Belding Worldwide under the same Interpublic umbrella as Coca-Cola Co. PepsiCo soon walked out.

Saatchi's hire of a top exec for its Toyota business directly from GM was a bungle. Holding company execs are not simply financial managers for giant operating networks. They are also the ultimate guarantors of fair treatment for their clients. That's the message in GM's outburst. And it's a warning that ought to be heeded.

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