Chrysler Tries to Reinvent Minority Marketing

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NEW YORK ( -- During their on-site visits to multicultural agencies across the country, Chrysler Group executives clutching a 12-page evaluation form carefully noted the ethnic mix of staff, peered at cell phones and computers, asked about celebrity, music and fashion alliances,
Al Sharpton Monitors Review
The Chrysler contest is being closely monitored by activists including Al Sharpton and his Madison Ave. Initiative and Jesse Jackson. The Rev. Sharpton -- who said he learned about the review by reading Advertising Age -- has met with Chrysler executives twice and spoke to them several times on the phone. The meetings have been described as amicable.

"This is important to us at Madison Ave. Initiative from the standpoint that we want to see fairness, people not excluded because of race, and people selected because they can do the best job," he said.

But for the Rev. Sharpton, the review mixes personal and business matters.

He is a close friend of both Steve Stoute and Peter Arnell of PASS and Don Coleman of GlobalHue. Rev. Sharpton attended Mr. Coleman's invitation-only birthday bash on Jan. 10 in Southfield, Mich. And Mr. Arnell, co-owner of PASS, bought several tables at a recent fundraiser for Rev. Sharpton's National Action Network.

Rev. Sharpton insists that personal ties will not get in the way of his unbiased oversight of the review. "So far it appears that it has been a fair process. It could end up being the kind of thing that others in the industry can look at and emulate. But it's not over till it's over." -- Richard Linnett

and assessed chemistry, all on a scale of 1 to 10.

That's not how a traditional multicultural agency review is conducted. But this is no normal review. As marketers grapple with how to even define urban marketing, DaimlerChrysler's Chrysler Group is boldly moving forward, trying to reinvent the traditional practice of targeting dedicated creative at different segments such as African-Americans and Hispanics.

Upping financial stake
It's also raising the financial stakes substantially. Chrysler plans to quadruple its $40 million plus annual spending over the next three to five years as it shifts more responsibility for events and other areas like customer relationship marketing to the winning agency alliance, said Jeff Bell, Chrysler's vice president of marketing communications. Moreover, the process, to be concluded this month, is being conducted under the close scrutiny of prominent activists the Revs. Al Sharpton and Jesse Jackson.

What follows is an unusual behind-the-scenes look at the tightly structured review that began April 1, when Chrysler, after sifting through a binder compiled by search consultant Richard E. Robins, sent a request for proposals to 24 multicultural agencies. The RFP carried a two-week deadline.

Review's manifesto
The manifesto for the review, Mr. Bell said, is that "we are moving away from solely dedicated creative for African Americans, Asian Americans, Hispanic Americans and the gay, lesbian, bisexual and transgender communities. Instead, we are moving toward serving those dedicated markets, and doing a much better job of urban marketing in general."

That final "and" is very important to Mr. Bell. So is connecting with popular culture, a consistent theme woven throughout the review.

"The driving principle of popular culture today is the urban mindset, and that mindset is diverse," said Mr. Bell, a former disk jockey who wrote his college thesis about Spanish philosopher Jose Ortega y Gassett and earned an MBA from the Wharton School. "Diversity is where the leading edge trends are, and our marketing needs to be in tune with those trends."

Of the 24 agencies contacted, 13 put together alliances to cover the multicultural bases, six responded on their own, two declined and three, surprisingly, were never heard from at all. Chrysler executives graded the respondents on eight criteria, ranging from case studies (which counted for a hefty 40% of the total score) to style.

The top five survived the first cut: Array, an alliance of Footsteps and HispanAmerica, both Omnicom Group-backed, and Asian agency Admerasia; the Cooperative alliance, made up of Asian shop A Partnership, Latin shop La Finca Creativa and African-American agency PFI Marketing; PASS Urban Powertrain, the alliance of Arnell Group and music executive Steve Stoute with Cultura, L3 and Osmosis Media Lab; incumbent GlobalHue, comprised of the former Don Coleman Advertising, backed by Interpublic Group of Cos., and its Montemayor & Asociados unit, joined by an unknown Asian partner; and S.I.P., made up of Publicis Groupe-backed Publicis, Sanchez & Levitan, IW Group and Prime Access.

From the beginning, a few larger-than-life figures stood out. One is Peter Arnell, the self-described "ideation" specialist who John Wren, Omnicom's chairman-CEO, introduced to Chrysler even before Omnicom bought 100% of Arnell Group last June. Omnicom's BBDO Worldwide, Troy, Mich., is Chrysler's general market agency and carried out ideas Mr. Arnell pitched for Dodge.

Fireworks and creative thinking
Known for fireworks

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Alleges Minority Shops
and creative thinking, Mr. Arnell has instigated reviews at other marketers from Masterfoods USA to Samsung. His downtown, rock-and-roll approach and easy friendships with clients have brought in business, although it doesn't always stay after the initial burst of ideas.

It is Mr. Arnell's partnership with well-connected black music industry executive Mr. Stoute that is considered a frontrunner for the Chrysler business.

"In PASS, Steve is God," Mr. Arnell said. "Steve Stoute has the best instincts creatively and strategically on pop culture, marketing and youth of anybody I've ever met."

Most of the Chrysler executives who back in 1994 hired incumbent Don Coleman Advertising for African-American advertising and worked with Coleman-owned Hispanic agency Montemayor & Asociados have left the marketer in the past 16 months. Mr. Bell and three other top Chrysler marketing executives have arrived since then from Ford Motor Co. Jim Schroer, executive vice president fo sales and marketing, and George Murphy, senior vice president of global brand marketing, joined in February 2001, followed in May by Mr. Bell and Julie Roehm, director of marketing communications for Dodge.

But that does not concern Mr. Coleman. "We feel we're the best and we don't mind a review," said the GlobalHue chairman.

On-site visits
After whittling down to the top five contenders, Chrysler teams hit the road in a flurry of on-site visits to shops in New York, Los Angeles, Dallas, Miami and Southfield, Mich. Everyone got involved: Chrysler supply and procurement executives, event marketing coordinators, representatives of Hispanic, African-American and Asian-American employee networks and minority dealers.

Each visiting team of three to 10 people had at least one marketing communications executive, responsible for making everyone doggedly plow through 47 questions during the two-hour tours, from research queries to "How many event planners will be working on our account?" Chrysler was deeply, obsessively interested in events, an area none of the alliances focused on enough.

Many questions were a variation of "Who do you know?" Agencies were grilled on their alliances and connections in fashion, music, sports, technology and gaming. "We call them the big five in popular culture," Mr. Bell said.

Dropping out
The Cooperative alliance pulled out after the on-site visit, sensing that Chrysler found them too small. In fact, Chrysler did question the alliance's ability to muster a Detroit presence near the marketer's own headquarters.

That left four contenders. In the next stage, the remaining alliances presented to a group of 25 to 30 Chrysler executives at Chrysler's Auburn Hills, Mich., headquarters in 90-minute slots, plus a 20-minute Q&A.

After a vote ranking the contenders 1, 2, 3 or 4, the fourth-ranked Array alliance was dropped. "They didn't answer how it was going to work," Mr. Bell said. "We need to understand who's going to do what. And they were light on African-American work."

Going to war
By contrast, Chrysler executives were impressed by the teamwork of the S.I.P. alliance. Mr. Bell said they presented themselves as urban commandos and even turned up in uniforms. "We had kind of a military theme," said Nita Song, president of IW Group, S.I.P's Asian American agency. "We called our presentation the 'War for Urban Domination.' "

Technically, she admitted, the uniforms were navy-blue mechanics' jumpsuits. "But we had S.I.P. armbands," she added.

Jackson and Sharpton
Throughout, the Chrysler team had the Revs. Sharpton and Jackson looking over their shoulders and expressing concern during visits to Chrysler and in public forums that a non-minority agency might win the business. In fact, the remaining nine agencies that comprise the last three alliances are all at least 51% minority-owned, although the major holding companies Interpublic Group of Cos. and Publicis Groupe have 49% stakes in about half of them.

The three surviving alliances have been given the final four weeks to crack a creative problem with a full campaign for the African-American, Hispanic, Asian, gay/lesbian and urban markets, including TV, radio, print, outdoor, customer relationship marketing and events. Chrysler is paying each group $20,000 toward costs and travel expenses to Detroit. Their presentations -- 90 minutes each plus Q&A -- are on June 13 and 17 and the winner's work will go into the market.

"At the final phase, the balance shifts back to creative," Mr. Bell said. "We're looking for strategic insight, creative work, staffing, competitive pricing and chemistry."

To help the agencies work out competitive pricing, Chrysler is providing the services of consultant Morgan Anderson to advise them and provide programs on Excel spreadsheets to help work out a full structure of salaries, overheads and base fees. Like Chrysler's general market agency BBDO, the multicultural winner will be paid a fee plus bonus.

Almost two
Just days before S.I.P.'s pitch, the three contenders almost became two. S.I.P. member Publicis, Sanchez & Levitan contacted Chrysler about a possible car conflict within the Publicis agency network. In last-minute talks, the agency and Chrysler -- which had no desire see the pitch become a two-horse race -- agreed that given Publicis's minority 49% stake, the Hispanic agency could create firewalls and work solely on Chrysler if it won the business, Mr. Bell said.

Whoever wins, he said, everyone has done serious thinking "about how the world is changing and the best way to serve distinct consumers of color and urban consumers. We were struggling with an old structure and paradigm. We knew we needed something as impactful as a review."

~ ~ ~
Staff writers Jean Halliday and Richard Linnett contributed to this report.

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