Nissan CMO Says the Agency Model Will Change, but He's Not Sure How
In December 2013, Nissan built a dedicated agency within Omnicom that would pull in talent from various agencies and disciplines such as media buying, market research, creative and digital content. Nissan United, the finished product, is still standing today and operating under longtime automotive ad agency executive Jon Castle. But the dedicated model is only phase one for the automotive giant and its relationship with the holding company, said Nissan's global marketing chief, Roel de Vries, in an interview with Ad Age this July.
So what's phase two? He doesn't know. What he does know is there will probably be even more integration as he and others find better ways to use data across all marketing functions, and in 20 years cars will anticipate your needs and schedule your appointments.
Ad Age: How does this whole Nissan United thing work today?
Mr. de Vries: We created the Nissan united model which has individual agencies and brand engineers who work on brand strategy and messaging across everything we do. An investment strategist looks at where all the money goes -- how much we should be investing where. Somebody is in charge of content -- what's the creative and the content across TV and video. That's working very well [but] its phase one of a bigger transformation.
Ad Age: How have you adjusted the structure internally to make Nissan United work?
Mr. de Vries: You need to change both sides. A lot has to do with how you allocate budgets. You need to make sure that someone has oversight of all marketing, and budget decisions are made much more at the center.
Ad Age: Talk to me about this next phase.
Mr. de Vries: For me the ongoing phase is the integration is getting bigger and bigger and bigger. I believe creative is in the center always. Technology is going to be huge. Technology includes knowing what people are using and following. Investment in the world of data, analytics and integration is going so fast and it can help you; it can [also] fool you. But you really need to be on top of that. We're going to create a different thing. I don't know what it looks like but I know it's different.
Ad Age: What's your marketing mix as it stands?
Mr. de Vries: Everyone is asking how much goes to digital. It's 20% in Brazil. U.S. is 34% to 33%. So the numbers vary. I think that's part of the problem. There shouldn't be a difference between how much you need to build engagement.
I don't even like the word digital. I think the word digital should disappear. The complexity is getting huge. If I told you we split the budget this way I'm already making the first mistake. The money should go to those areas where our customers want to engage. That's different for every single thing we want to achieve. If we launch a brand new car nobody has heard about of course you still go to big TV. In Brazil, we still have TV stations where the whole nation watches.
Ad Age: What have you changed about your investment focus?
Mr. de Vries: It's not the same in every market. It depends on what we need to do. For example, in China we're launching five brand new cars. Of course were going to spend a lot of money announcing all these. If you want to take the generic approach, the amount of money that will go to social and digital is going to keep on increasing. I think the traditional media will not disappear. It'll stay a significant part of the budget and slightly shift into live moments, into those areas where people are still watching.
Ad Age: You may spend more on these big moments that you would elsewhere, but are the costs associated with digital programmatic buying actually higher?
Mr. de Vries: To me it's exciting -- all these opportunities. Sometimes they get presented as if the ultimate solution is programmatic, data, big data, social. Yes, they should solve a lot of the problems we have, but the challenge is still, how do you change a new model? I don't know if it's going to get cheaper or more expensive. If there's a new technology that can specifically target an individual then it will get more expensive.
Ad Age: You've been talking about data interpretation. Who is doing that? Adobe? You're in their cloud.
Mr. de Vries: I don't think in very short-term there is going to be one company or one player that's going to give us all. Yes we are [in the Adobe cloud]. We sell 5.5 million cars per year, and there are 38 million people driving cars out there. A small percentage of those cars talk to us. In a few years' time, a majority of those cars will have chips in them and there's data. In the media world there's lot of data. I can analyze which website you're on and how I can reach you. We do that together with Annalect and Omnicom. It's very useful and powerful in optimizing our media and using data, but we also use a lot of data that's coming out of our cars. We know what our customers do and what is their driving behavior. Based on that, we know we need to offer them tires because we know how many kilometers they've driven. In 20 years' time cars will talk to each other.
Ad Age: The complexity is also brewing controversy. What do you make of all the controversies surrounding viewability, fraud and kickbacks? Are you concerned?
Mr. de Vries: In terms of trust, kickbacks and so on, it comes to the relationship between a company and an agency. You should always have the assumption that the partner you're dealing with is honest. And of course we have contracts. We spend a couple billion dollars. So we audit. We audit our own processes and systems. We sometimes audit agencies in terms of the FTEs we're dealing with on the account. We pull invoices from media agencies and do a three-month analyses and all that, and I think it keeps the system open and honest.
We're not doing a media pitch, but I can imagine where [the concern] comes from. There is a huge pressure on the media agencies.
Are there inefficiencies or mistakes, in country A or city B where they've invoiced a few hundred thousand without having done the job? I'm sure. But structurally I seriously doubt big agencies would take that risk.
Ad Age: Will you change your agency compensation models in the next phase?
Mr. de Vries: Remuneration models will change. We never have an argument about, if there was a top level person coming in, how much that person would cost. It doesn't matter. Where the discussion comes to fees is not, how much is the salary of individual people, but how efficient is the system.
I want young people to make Vines every day. I want output people.