Olds turned to Roberts & Russell, Knoxville, Tenn., for value-theme ads, rather than national agency Leo Burnett USA, Chicago.
Burnett only recently appointed new top creatives on the Olds account.
Olds has been under pressure from GM to improve its advertising. Ronald Zarrella, GM group VP-sales and marketing, North American Operations, recently described Olds' brand positioning as "pretty fuzzy."
Olds' own dealer body, unhappy with slumping sales, pushed for the change.
Olds' Board of Governance, a panel of eight dealers, devised the idea to use a preferred regional dealer group shop, said Larry Cummings, an Indiana dealer. He said only Roberts and two others were invited to pitch: Moroch & Associates, Dallas, and Trainor & Associates, New Hartford, N.Y.
Olds is paying production costs and kicking in some regional media dollars; dealer groups will also buy regional media.
Steve Shannon, general marketing manager at Olds, said the move "doesn't reflect any lack of confidence for Burnett."
Over the past year, Moroch worked with Burnett on strategy for Olds' spring NCAA March Madness national promotion and handled point-of-purchase materials for the summer Olympics'.
Mr. Shannon said Olds "may again in the future use" one of its select dealer group shops, "but to assume this is automatic is wrong."
Olds has been phasing out its stodgy model lineup since launching the 1995 Aurora and anticipates "significantly higher product volumes" when four new models hit between this fall and 1998, he said. "We knew the low-water mark in sales would be this year."
Dealers will be closely watching to see whether Roberts' campaign spurs sales, Mr. Cummings said. If it works, the dealers will push for national work from select regional agencies.
Olds is in a slump. Sales during the first eight months are down by 12.4% to 230,000 and were off by 22% in August, said Automotive News, a sister publication to Advertising Age.
Olds budgeted for four national ad promotions this year, one in each quarter, Mr. Cummings said. Burnett did the first three. The agency is also handling the launch this fall of three new Olds vehicles, though it has yet to present creative to Olds.
"That's what's keeping Burnett in the driver's seat right now," said an executive at another select dealer group shop.
Burnett referred calls about the promotional campaign to Olds.
ON THE HOT SEAT
The shop has been on the hot seat with Olds before. In 1993, Burnett survived a review to keep the account, now worth an estimated $105 million in billings.
Launch campaigns for the new models-the Silhouette minivan and Cutlass Intrigue sedan-are crucial to Burnett, said Chicago-area dealer Steve Moskowitz.
"I imagine if they do a lousy job on the new products, they'll lose the account," he said. "We have a lot riding on our new products, the whole future of this div-ision."
Contributing: Mark Gleason.