Honda CMO Hopes Agency Reorg Will Boost Brand Equity
American Honda Motor Co. has shaken up its agency roster, brought new shops into the mix and unbundled one of the oldest agency-client relationships in adland. But that's not enough. American Honda CMO Mike Accavitti has big plans to shake up both the Honda and Acura brands' marketing mix and more effectively target consumers.
Following a review begun in December, the company announced that it would retain 26-year incumbent RPA for creative duties on the Honda brand only -- the agency had handled creative and media for both Acura and Honda. It brought on Boston-based Mullen for Acura and Publicis Groupe's MediaVest as its media agency for both brands.
Mr. Accavitti, who joined American Honda in 2011, led the review. Now, he talks to Ad Age about what he hopes to achieve with the new relationships, and discusses his plans to further shift the company's marketing in digital's favor, moving away from traditional broadcast on the heels of the upfronts.
Ad Age: When you joined Honda, you said you didn't plan to do a review. At what point did it become apparent that you would need to make an agency change? You've referenced a "changing media landscape and a hyper-competitive marketplace" -- but did something more specific spark the move?
Mr. Accavitti: I didn't come in here with my guns drawn looking to take somebody out. With an understanding that there's been some good work done here in the past, we needed to see the capabilities of [RPA]. There wasn't a time where it struck me as, "oh my God, we have to do this." But we're constantly seeing work, and over time it became apparent that we really needed to reinvigorate our creative process.
We got some good stuff and we got some mediocre stuff. We needed to have greater consistency of better work. It was a reinvigoration of process. At the same time, what we found is that we needed to find greater efficiencies. We're dealing with finite resources here and want to ensure that a greater percentage of our resources are spent communicating with the customer -- not in fees and not in activities that are not value-added.
Ad Age: What does the change mean for your marketing mix and ad spending?
Mr. Accavitti: There's enough money in our marketing budgets for us to successfully compete. Until we're spending that amount in the most efficient manner, we won't be able to tell if we need to spend more or less. The step now is to redirect any savings associated with this agency structure back into the marketplace. We have been shifting the mix, since my arrival, away from traditional broadcast media TV. There was a heavily TV-centric marketing focus in this place when I got here. So we started to increase the amount of funds spent in digital. That will continue.
Ad Age: The upfronts are only a month away, and you have a new media agency. What does that mean for your upfronts strategy?
Mr. Accavitti: There will be a change, but not a drastic change. We are going to be focused on more targeted media. We won't walk away from prime time because we need it, but we'll be more targeted in the stuff we do on TV. The timing of this review took that into account.
Ad Age: Why separate Acura and Honda? Are you planning on elevating the Acura brand, which has historically spent less on media, as you revamp the lineup and introduce new products?
Mr. Accavitti: We felt that Acura is in need of some fresh thinking and innovation in the advertising world. We wanted to break it out as a separate account and allow the agency to focus on it and not be shackled by the past or trying to be consistent with Honda. The challenge we face at Honda is that while Acura is a mass brand, it's a premium brand with a premium image. It needs to distance itself as a luxury brand.
Ad Age: What are you looking to achieve in terms of creative for Acura?
Mr. Accavitti: It's an emotional purchase, so we want to drive more emotion into our advertising. We do not do that by spending more but by separating agencies to allow them to think differently. Also, we need to better target that money. Right now, Acura been very TV-centric and that's not necessarily where we want to be with a luxury brand.
If you look at the current launch with RLX luxury sedan, you'll see that the percentage spent on TV is less than 40%. We're spending more on digital and on print. It comes down to understanding the customer. That will be one of the strengths MediaVest brings to the party: the ability to segment and target and help us spend those dollars we have more wisely.
Ad Age: So why pick Mullen when there are so many hot shops out there?
Mr. Accavitti: Mullen produced awesome work. Awesome. And what impressed me the most about Mullen is the thirst they had to find out the core essence of what we are about and what we are trying to do. They met with 20 dealers from all over the country, sat down with chief designers, talked with local dealers, test-drove cars, talked to other executives.
Their creative result was impressive, but the great strategy that led up to that was equally impressive. They made a full-size model -- the size of a table -- that showed how the camera would move through the scene and what it would be showing. The creative idea was creative, but how they demonstrated the creative idea was also creative.
Ad Age: And RPA? Did they bring in fresh talent for the review? What will be different about Honda work going forward?
Mr. Accavitti: They did bring in some folks to help with their strategy. We know they're capable of doing great work. Sometimes, through the process of the day-to-day work, it's human nature to lose focus. What they did to earn that business is they focused on it. This is a longtime relationship and they have institutional knowledge about our brand.
The creative hasn't been as consistent as it should be. So what I see moving forward is greater consistency around what makes Honda so special. It's built upon clean, safe, fun brand attributes. We need to demonstrate core values like innovation, a youthful feeling, reliability, quality and have consistency of message and platform across campaigns, as well as a consistency between the national and regional work we do. We need to start to build equity in things and customers and have people look at a magazine or online ad or TV spot and know it's a Honda ad [to the extent to which] we don't even have to use logos.
Ad Age: Talk about the review process.
Mr. Accavitti: We visited 12 to 13 agencies face-to-face, for chemistry checks, in their buildings. Then we selected finalists, brought them here for a deep dive and briefed them all at the same time. Then we did rides-and-drives with products, deep dives with engineers, etc. And we followed-up with each individually. From the get-go we explained that we were looking for collaboration. We talked to agencies' current clients, media agencies the creative agencies work with and creative agencies the media agencies work with.