INSIDE CHRYSLER'S CELINE DION ADVERTISING DISASTER

DETROIT -- One quavering voice was noticeably absent when more than 570 dealers gathered this month in a convention center in suburban Chicago to Companion Story: CHRYSLER FORMS TASK FORCE AFTER FLUBBED PACIFICA LAUNCH Group Performs Postmortem on Failed Celine Dion Campaign Related Stories: CHRYSLER ADS TO RETAIN CELINE DION MUSIC New Marketing Chief Says Automaker's Entire Marketing Program Under Review TOP CHRYSLER MARKETING VP QUITS Jim Schroer Headed Dodge, Jeep and Chrysler Brands CAN CHRYSLER RIDE THE MUSIC TO UPSCALE STARDOM? New Deal With Celine Dion Bets on the Power of Pop Songs "Celine Dion's name didn't even come up once," said Stan Balzekas, general manager of Balzekas Motor Sales in Chicago, who attended the first event of Chrysler Group CEO Dieter Zetsche's 11-city roadshow. Chrysler disaster One year after signing a three-year contract with Ms. Dion for a reported $14 million, Chrysler is all but pulling the plug on the French-Canadian chanteuse. The advertising campaign that featured more Dion than cars has been a disaster for Chrysler. Dealers complain that the branding campaign did more to sell the singer than it did the new Pacifica. It is not as though Chrysler wasn't warned. Sources say Chrysler's ad agency, BBDO Worldwide, of Troy, Mich., discouraged its client from using the singer for its commercials. Still, the campaign went ahead despite test numbers showing that Ms. Dion appealed to a much older audience than Chrysler wanted. All but gone This month, Chrysler marketing boss Tom Marinelli said Chrysler will not use Dion's image and is re-evaluating the use of her music in future campaigns. "Manufacturers try to aim at a particular audience, and you miss it sometimes," said John Hiebert, general manger at Jack Wolf Chrysler-Jeep in Belvidere, Ill., who also attended the Chicago dealer event. "They were trying to class up the image of Chrysler, and it didn't have enough excitement," he said. "Dodge has performance. Jeep has a rugged personality. And maybe Chrysler had its nose a little too far up in the air." Ms. Dion was supposed to give Chrysler a more upscale brand image. Chrysler saw it as a pitch-perfect partnership: Ms. Dion was coming off a two-year retirement with a new album, and Chrysler needed a big name for its "path to premium" positioning. The Pacifica crossover was to spearhead that drive. Toast of Chrysler Ms. Dion had been the toast of Chrysler. The 35-year-old singer of such ballads as "The Power of Love" performed at the Charity Preview black-tie gala at the Detroit auto show Jan. 10. The songstress also starred in a series of lavish, expensive TV commercials. Chrysler's "Drive & Love" ad campaign debuted in January with huge fanfare. Dion appeared in ads for the 2004 Chrysler Pacifica sport wagon, the Crossfire coupe and the Town & Country minivan. Chrysler also sponsored her Las Vegas show, "A New Day," which debuted March 25. And while Pacifica sales were sagging, Ms. Dion's new album, One Heart, was soaring. More than 2 million copies sold by the end of April. What went wrong? "Celine Dion personifies the Chrysler brand slogan," said Jim Schroer, Chrysler's former global sales and marketing chief, when the marketing agreement was announced in November 2002. "This is the kind of branded harmony you dream about." But sources say Mr. Schroer pushed the deal through --against the advice of his ad agency. BBDO's Detroit office, which handles Chrysler's national advertising, wanted no part of Dion, sources say. Chrysler's strategy was to move the brand upscale by attracting younger, more affluent consumers. But during testing, BBDO's focus groups told Chrysler that Ms. Dion appealed to consumers with an average age of 52. Mr. Schroer asked for additional BBDO research to justify the ad campaign, a source says. 'Make it work' "Schroer told [BBDO] to go out and test again," a source says. "He said, 'Make it work.' " Chrysler now says the average age of a Pacifica buyer is 53. Publicly, Bill Morden, BBDO Detroit's vice chairman and chief creative officer, warned that it would take at least a year to improve Chrysler's image in consumers' minds. Privately, BBDO's Detroit office tried in August 2002 to persuade Chrysler to drop Ms. Dion. When Chrysler wouldn't, BBDO New York stepped in. The New York bosses agreed to allow the Arnell Group, a New York agency owned by BBDO's parent company, Omnicom Group, to create the commercials. "[Morden] was taken behind closed doors and told, 'If it fails, you guys can wash your hands of it. It won't tarnish your name,' " the insider said. Peter Arnell Arnell Group Chairman Peter Arnell delivered Ms. Dion to Chrysler, say sources familiar with the negotiations. Arnell Group was given the creative work on Chrysler's national account and produced and directed the Dion ads. A source who worked regularly on BBDO commercials called them "exorbitantly expensive" -- costing $2 million and $3 million a spot, compared with $600,000 for a typical BBDO spot. Mr. Arnell did not return phone messages. The lush black-and-white Pacifica commercials showed Ms. Dion singing and driving. But consumers weren't motivated to visit the showrooms. Dealers sold only 4,828 Pacificas in the first three months on the market after projecting 60,000 sales in the first year. Mr. Schroer resigned May 30 and was replaced by Joe Eberhardt, a German native from DaimlerChrysler's U.K. operations. Fuzzy advertising The Pacifica's high price has taken most of the blame for the slow start, but the fuzzy advertising didn't help. The campaign received a torrent of criticism from dealers. Still, Chrysler didn't back off. "We have big launches in the first quarter of [2004], the new Chrysler 300, we have the new PT Convertible," said Mr. Marinelli in July. "So the opportunity is there in the fourth quarter to get back to brand building for a six- or eight-week period. And rest assured, Celine will play a key role in that." But at a Nov. 7 press introduction for the 2005 Dodge Magnum and Chrysler 300 C, Mr. Marinelli had done a turnabout. 'Cars are the stars' "We don't anticipate [using her]," he said. "Her image was appropriate to the launch of the direction of the brand. And we believe the cars are the stars. If anything, it will be mostly about her music. Where there are opportunities, we will use music that works." Last summer, Chrysler hired research group Millward Brown to test the initial Pacifica spots on focus groups. In each case, Millward Brown says commercials that used Ms. Dion's music, but not her image, tested better than the ads that showed the singer. "None of the Celine ads did especially well at breaking through the clutter," said Bob Coppola, Chrysler account group director at Millward Brown. "It was just about average." Dealers and industry analysts say they aren't surprised at the fallout of the Dion campaign. Star power is hard to quantify, especially when it comes to selling cars. Celebrity overshadowed brand "It can be trouble when you link with such a big celebrity, you run the danger of the celebrity persona competing with and overshadowing your brand," says Melissa St. James, a professor of advertising and marketing at California State University. St. James has spent seven years studying celebrity endorsement decisions in marketing. Last year, she co-authored a study at George Washington University on the subject. "Sometimes you can focus on the expertise of a celebrity with a product, but [Ms. Dion] doesn't have a connection in that sense," Ms. St. James said. "There is nothing to lead you to believe she knows anything about cars." Alan Helfman, owner of River Oaks Chrysler-Jeep in Houston, says Chrysler slipped. "We weren't selling her, we were selling the car," he said. "You can't make her the main focal point. Many have tried to bring out a different approach with a singer or actor, but when you don't show the car usually it doesn't work." Research controversy Ms. St. James questions whether Chrysler did any firsthand research on her popularity. "Did they look at her image?" she asks. Chrysler maintains that Dion's appeal with the public tested positive. Mr. Marinelli said Nov. 7 that Dion "always tested well." But Steven Levitt, president of Marketing Evaluations, a New York company with 40 years of experience rating celebrity endorsers for clients, says that among men and women ages 25 to 54, Ms. Dion's negative ratio has grown in the last five years. Marketing Evaluations surveys the likability and familiarity of celebrity endorsers. In 2003, Ms. Dion's overall likability was nearly identical among men and women. Nearly the same number of people liked her as said they didn't like her. "Our rule of thumb," Levitt said, "is that the positive-to-negative ratio be at least 2-to-1, hopefully more. Her numbers are not terrific." 'Does she bring the right metaphor?' "The overarching question, irrespective of Chrysler, is how effective is a big star or a singer?" asks Doug Scott, an analyst with Allison-Fisher International, a marketing research company in Southfield, Mich. "In this case, does she bring the right metaphor? Does she mean innovation and all the things a crossover car represents? Maybe she should have moved over to a sedan." Mr. Eberhardt has said he's no fan of "personality associations" for advertisers because of consumers' varied perceptions. Chrysler maintains that it was always the plan to reduce Ms. Dion's image in TV commercials. Chrysler says it will focus on the features and benefits of their vehicles in future advertising. "The perception of a product is in the launch phase," said Mr. Eberhardt in July. "I am not sure whether we did the best shot in that respect, whether we did go out there and say: 'This is what the product is, this is how much it costs, and this is the price it starts at.' We have to change to show-me mode, and we will." Said John Hiebert, general manager at Jack Wolf Chrysler-Jeep: "They are going to talk about what you are getting in the vehicle that's new -- not just some lady singing."

INSIDE CHRYSLER'S CELINE DION ADVERTISING DISASTER

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