Zipcar's Acquisition by Avis Comes Amid Agency Review

Car-Sharing Service Has Been Engaged in Pitch for Many Months

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Avis Budget Group's nearly $500 million acquisition of Zipcar, which was founded in 2000 and rents cars by the hour or day, won't impact the Zipcar nameplate.

A spokesman for Avis told Ad Age that the company plans on keeping the Zipcar moniker. "We consider Zipcar to be a very strong brand, the worldwide leader in its segment," he said.

Avis CEO Ronald L. Nelson in a statement Wednesday said: "By combining with Zipcar, we will significantly increase our growth potential, both in the U.S. and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs."

Avis Budget Group Inc., once a skeptic about car-sharing services, agreed to buy short-term rental pioneer Zipcar for $491 million.
Avis Budget Group Inc., once a skeptic about car-sharing services, agreed to buy short-term rental pioneer Zipcar for $491 million. Credit: Bloomberg

But what's still uncertain is just how Avis plans to market Zipcar, and how much Avis is willing to invest in advertising the newly acquired company. Last year, Zipcar began seeking out big network agencies to help spread its message, after historically handling creative in-house or working with small U.S. shops.

Zipcar last summer kicked off a search for a global creative agency. But shortly after, CMO Rob Weisberg left the company, stalling the review. A spokeswoman for Zipcar said Wednesday that the review is still in process.

Avis has also been taking a new marketing approach. Early last year it selected Publicis Groupe 's Leo Burnett to handle its creative business and by August the company sparked controversy when it dropped its 50 year-old tagline, "We try harder," in favor of Burnett's tagline "It's your space."

Avis Budget in 2011 spent the majority of its measured media, $42 million, on Avis, while it spent about $14 million on Budget. Zipcar in 2011 spent about $7 million on measured media, according to Kantar Media.

Zipcar, founded in 2000, has more than 760,000 members and is active in 20 cities in the U.S., Canada and Europe, the companies said today. Zipcar will proceed with plans to shift its headquarters to Boston from its current headquarters of Cambridge, Mass.

By acquiring Zipcar, Avis Budget joins Enterprise Holdings and Hertz Global Holdings, the two largest U.S. car-rental companies, in the race for expanding hourly rentals.

Enterprise last year acquired Mint Cars On-Demand, an hourly car-rental firm with locations in New York and Boston. Hertz said last year it planned to equip its entire 375,000-vehicle U.S. fleet for hourly rental. Avis Budget last year saw Hertz acquire Dollar Thrifty for $2.6 billion, solidifying Hertz's No. 2 spot behind Enterprise, which operates the Enterprise, Alamo and National brands.

~With additional reporting from Bloomberg News~

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