Carat in line to scoop $3bn General Motors global media account

December 7, 2011

A strong rumour suggests Carat has scooped the $3bn General Motors global media buying and planning account, which has been under review since August.

If true, this outcome amounts to a huge blow for Publicis Groupe, which services the majority of the account through its media specialist Starcom MediaVest, and – by the same token – a big fillip for Aegis, owner of Carat, the publicly listed company steered by Jerry Buhlmann.

The review, one of the biggest of its kind in the world, was instigated by GM marketing supremo Joel Ewanick as part of a slew of measures designed to tighten up the automobile giant’s worldwide marketing performance.

Before the review, GM used up to 20 media specialists. However, the bulk of the spend – two-thirds in fact – is committed to North America (the Chevrolet, Buick and Cadillac marques), and much of that has passed through Starcom since 2005. Carat, which has been on the GM roster for a slightly shorter period but consolidated its hold during a 2010 review, handles the $500m European business (Opel and Vauxhall). Interpublic’s Universal McCann was responsible for much of the Latin American business.

Although the review was slated as “global”, it did not in fact include GM’s operations in nascent markets India and China. What it did include, according to the briefing notes, was “digital…, SEO and social media.”

If Ewanick has stuck to his word and included these in the consolidated Carat package, his decision will represent a double-whammy for Publicis. Back in the summer, PG boss Maurice Lévy sought to shore up his position in the increasingly important GM digital account by taking a 51% stake in Big Fuel, which holds the North American social media account. The acquisition was aligned under the Vivaki digital unit.

What we don’t know, of course, is how profitable the account will be for Aegis. In their desperation to win an account, media men often allow their competitive negotiating instinct to overcome more rational arithmetical considerations, and pare the margins down to the bone in an all-out attempt to win. That said, a win will do Aegis’ share price no harm at all. And, being on a roll, Buhlmann can expect more clients to put him and his team at the top of their shortlists.

 

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Chevrolet Volt crisis gives General Motors’ recovery plan a nasty electric shock

November 29, 2011

Effervescent General Motors marketing supremo Joel Ewanick now has a lot more on his bulging agenda than reviewing global ad agencies. GM is facing a full-blown image crisis, thanks to its flagship vehicle – the hybrid Chevrolet Volt – having an unfortunate tendency to burst into flames.

I should say it’s not the car itself which is a fault, but the lithium-ion batteries critical to powering it. And “smouldering” rather than “spontaneous combustion” is nearer the mark. Plus, there aren’t, as yet, many recorded cases. Never mind, all the ingredients are there for an outbreak of public hysteria, ventilated by the media.

As with most of these PR crises, the actual threat to human welfare is difficult to assess. Much more certain is the disproportionate negative impact on the manufacturing company’s reputation once the matter has entered the public domain. Especially if the beleaguered company fails the test of  immediate and effective remedial action. A few years ago the self-same problem of lithium-ion batteries catching fire (in this case in laptop computers) caused Dell to instigate the biggest computer product recall in history.

For GM, the Volt crisis could not be more serious. Last Friday, the federal authorities, in the guise of the National Highway Traffic Safety Administration (NHTSA), decided to launch an official investigation. A successful Volt – which is the halo product of GM’s biggest car marque, Chevrolet – is integral to GM’s hopes of recovery, not in numbers sold (heaven forbid, about 6,000 so far!), but in terms of perception as a leading-edge automobile maker.

You may smile at that, but GM’s senior management is deadly serious. Not long ago, Ewanick suggested that Apple, rather than other car-makers, was the benchmark by which his company’s future performance should be judged. The hybrid range has been used to curry public favour and convince the world that GM no longer equals “gas-guzzler.”

And it gets worse. President Obama has made it clear that the e-car is critical to lessening America’s dependency on oil. He wants one million electric vehicles on the road by 2015. What’s good for America is clearly good for GM. But not if the public is put off hybrid technology (of which it is, in any case, sceptical) by the suspicion that batteries may catch fire.

Predictably for a company under siege, GM’s immediate response to  the federal safety investigation was to issue a bland statement stressing the car’s safety – classic procrastination. Its crisis management team has now moved up a gear with the announcement yesterday that GM will provide free loan cars for any owner inconvenienced by a Volt “incident”. I wonder what other measures are on the way.

In the meantime, GM’s flagship remains firmly anchored in port. The Volt global export-drive has been beached.

Volkswagen – which has hugely benefited from its rival Toyota’s set of reputational issues – will be watching GM’s discomfort with interest. Toyota and GM are its principal competition. VW has come from behind and is now comfortably cruising towards being the world’s largest car-maker.

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Why Joel Ewanick’s Apple comparison is just pie in the sky for General Motors

August 24, 2011

“Feisty” is the word that most often comes to mind when describing General Motors global chief marketing officer Joel Ewanick.

Since arriving from Hyundai (where he held a similar position) last year, the man seems to have barely slept as he implements a whirlwind catalogue of changes. This month alone, while others absent themselves on their summer vacation, Ewanick has reorganised his marketing department and called a review of the $3bn GM global media account.

But restless energy – commendable though it is – should not be mistaken for vision. The limits of Ewanick’s intellectual rigour, although not his soaring ambition, were also on display earlier this month – at GM’s second annual Global Business Conference.

In it, Ewanick made the extraordinary declaration that his goal is to transform GM not into a better car company, but a future Apple.

Nor was this just a rhetorical trope dished out to a friendly audience. He’s deadly serious. “It’s time,” Ewanick said, “To clearly differentiate our brand and align closer to a true global brand like Apple. It’s time for an automotive company to step out and address consumers and their needs in a way that’s never been done before.”

Admirable sentiments of course. But just what does he mean? Technological innovation is integral  to selling cars, but that doesn’t mean the motor sector is in any way comparable to Silicon Valley. And even if it were, rust-belt Motown marques, with their high social costs and Chapter 11 legacy, are not where you would start. Ironically, in fact, the US car brand with the most potential for eye-catching product innovation and design is not American at all: it’s one whose marketing Ewanick has already captained – Hyundai.

But if the future is elsewhere, Ewanick has, in a curious way, scored a debating point about the past. GM is comparable with Apple: but only in the past tense. Back in the fifties, when Americana and US global power were at their height, a new Chevvie or Cadillac was a potent symbol of the consumer dream. It encapsulated the freedom to travel anytime, anywhere worth travelling to, on the interstate highway. So potent was this dream that GM – like Apple today – was the world’s biggest company by market capitalisation. It even became a mantra in US foreign policy: “What’s good for GM is good for America.”

No chance of recapturing that distant eminence, now or in the future. Cars are simply not the must-have consumer products they once were; even in fast-growing economies like China’s – where they may well be viewed as status symbols, but not on the level of fifties America. Who, on the other hand, would not break their neck to acquire the latest Apple iPhone?

It’s possible, of course, that I have misunderstood Ewanick’s apparently ludicrous aspiration. All he was really talking about was the much more modest goal of creating brands with universally accepted global appeal. I don’t think so, though.

What’s certain is that neither Ewanick nor his boss, GM CEO Dan Akerson, is the next Steve Jobs – despite the superficial brand-turnaround comparison.

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Buckle your safety belts: GM has put Joel Ewanick in the global driving seat

December 21, 2010

You’ll have to forgive me. Unlike former Porsche marketer Joel Ewanick, I don’t live in the fast-lane – meaning, I’ve just caught up with the news that he has been appointed to the new position of global chief marketing officer, General Motors.

Even by his standards, that was quick work. He only joined the organisation eight months ago as US vice president marketing, after a brief and apparently stormy sojourn at Nissan. But what an eight months that’s been. The relentless cutting-edge of the whirling dervish has left no department intact, no slogan unchallenged, no strategy unexamined, no agency relationship unmarked. Most notoriously, it will be recalled, he summarily despatched Publicis Worldwide only weeks after it had won the $700m Chevrolet account, and replaced it with (off-roster but on-message, so far as Ewanick is concerned) Goodby Silverstein & Partners. Then, judging perhaps that he had gratuitously made an enemy of one of the most powerful admen in the world, he placated Maurice Lévy by firing BBH from $270m Cadillac and giving the business to Fallon instead. I’m sure there were other reasons for this move: but it cannot be entirely coincidental that Fallon is wholly owned by Publicis Groupe, of which Lévy is the ceo, whereas BBH is only 49% owned by the same company. More money, then, into the main exchequer.

Any way, back to Ewanick. There are at least two, not entirely contradictory, ways of looking at his brand of marketing management; the success of his current appointment will depend on which is uppermost.

The first we have already seen: the change agent on steroids who will stop at nothing to become the world’s most famous car-marketer, in a vainglorious attempt to salvage the apparently unsalvageable: GM’s reputation.

The second is a man with an indisputable reputation for turning around troubled car marques. He did it at Porsche Cars North America during the nineties (no fly-by-nighter there – he stayed nearly nine years as general manager marketing); and he did it again during his 3-year stint as head of marketing at Hyundai North America. Hyundai is now – arguably – America’s most successful car brand.

In this new role we’re going to discover whether success has gone to Ewanick’s head or not. According to the man who appointed him, GM CEO Dan Akerson (himself a new kid on the managerial block), he “will ensure consistent global messaging fro all brands including Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall. Ewanick will provide oversight for global brand enhancements in the markets in which they are sold and work in association with the regional presidents in countries where GM has partnerships and joint ventures.”

The key regional bosses we are talking about here are the ones with dominion in Britain (Vauxhall), Australia (Holden) and Germany (Opel) – Ewanick already controls the rest. And the key issue is how much these brands desire, or even require, “consistent global messaging” – still less an American-centric version of it. Let’s not forget that these were the successful bits, devolved from GM’s incompetent Detroit management – the bits that didn’t have to go into Chapter 11 a while back. I wonder whether Ewanick has the forbearance to acknowledge that. Somehow, I can’t imagine tact is his number one quality.

Whatever happens, it’s going to be an interesting ride for GM’s European roster agencies. DLKW Lowe, McCann Erickson, Scholz & Friends and Amsterdam Worldwide, fasten your seat belts.

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Why BBH had to let Steve Harty go

July 22, 2010

First it lost the $270m Cadillac account, then it resigned the foundation Levi’s business after no new campaign in nearly two years. Now we hear Steve Harty, eminence grise of its New York shop these past five years, is being let go. It looks, to surface appearances, as if BBH and its micro-network model, is in a downward spin.

None of this is good news, granted. But it’s not quite so grim as it first appears.

Commentators have been quick to place Joel Ewanick, GM’s maverick new marketing supremo, at the centre of events; and they’re not entirely wrong. The rabid Red Queen of marketing (“Off with their heads!”) – as he’s becoming known – certainly didn’t help matters when he pronounced the death sentence on BBH’s “Mark of Leadership” strapline. But easy come, easy go. BBH New York had only held the account for six months. The business wasn’t there long enough to qualify as a foundation client, like Unilever or Diageo.

The loss does, however, have a direct bearing on Mr Harty’s “future direction”.  Harty, previously the ceo of Merkley Newman Harty, was brought in about 5 years ago as chairman of the New York office, to lend an American accent to what was seen as too quintessentially British. Things had not been going that swimmingly under his predecessor Cindy Gallop – herself a British national of long-matured BBH London vintage. In the event, I’m not sure how well the Stars & Stripes card, of itself, worked in pulling new business; but of one thing we can be certain: Steve Harty came with a very high price tag.

Fast forward most of those five years to winter 2010. A senior management reshuffle at BBH New York left Harty looking vulnerable. Emma Cookson, the long-serving ceo who seems to have done much of the heavy lifting in the New York office, stepped up to Harty’s role while he himself became group chairman of North America, in charge of digital production, brand-creation operation Zag and new acquisitions. The reshuffle happened immediately after the Cadillac win; but just as importantly, in the wake of a new dictum from London HQ: that senior executives should spend more time servicing key clients. In Cookson’s case, the client was Cadillac. Which means, in theory, that she now has a lot more management time on her hands.

Subtract Cadillac, and Harty – nice guy though he evidently is – becomes the white elephant in the room. A luxury too expensive to maintain.

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Hush my mouth – not ‘Chevy’ but ‘Chevrolet’. Repeat after me, ‘Chev-ro-let’

June 11, 2010

I was tickled to discover General Motors has issued a decree that, heretoafter, the brand formerly known as “Chevy” (as in “levée”) will be called “Chevrolet” and nothing else.

GM decree: No more Chevy at the levée

A po-faced memo, sent to all to all employees working at the megamarque’s Detroit HQ, says: “We’d ask that whether you’re talking to a dealer, reviewing dealer advertising, or speaking with family friends, that you communicate our brand as Chevrolet moving forward.” Then, without a trace of irony, it goes on to observe: “When you look at the most recognized brands throughout the world, such as Coke or Apple for instance, one of the things they all focus on is the consistency of their branding…”

Er, no. Consistency, certainly; but Coke is “Coke” and the “Apple” in “Apple Mac”  is silent.

The memo is signed by Alan Batey, vice president for Chevrolet sales and service, and Jim  Campbell, Chevrolet’s vice president for marketing, but I strongly suspect the influence of  GM’s wunderkind marketing supremo Joel Ewanick, freshly hired from Nissan. Ewanick, it will be recalled, spectacularly fired Publicis Worldwide from the $600m ad account the minute it had won it and installed his old chums from Hyundai days, Goodby Silverstein & Partners, in its place.

Branding by decree never works when what you are up against is the property of popular culture. And Chevy (whoops, a quarter into that Detroit cuss bucket by the water-cooler) – GM’s biggest brand, accounting for 70% of its sales – is very much public property. Need I go further than quote the New York Times here? …”What about rolling back the popular culture references to Chevy? Elton John, Bob Seger, Mötley Crüe and the Beastie Boys have all sung about Chevy, and hip hop artists rap about ‘Chevy Ridin’ High’ or ‘Ridin’ in my Chevy.”" Not merely Don McLean, then.

Just to underline the wrongheadedness of it all, I have a personal anecdote to relate on this very subject. Shortly after he was installed as president of InBev UK and Ireland, Richard Evans tried to address the plummeting brand equity and sales of his company’s flagship product, Stella Artois, by deleting from the record all references to its popular sobriquet “Wife Beater”.

Kowalski: Not Stella

It was, I suppose, a bit mischievous of Marketing Week to run a cover story illustrating the sad decline of this once proud brand with a still taken from A Streetcar Named Desire, featuring Stanley Kowalski (aka Marlon Brando), clad  in “Wife Beater” tee-shirt and wielding a (photo-comped) bottle of the offensively-misnamed brew in his hand. Evans, inevitably perhaps, had a sense of humour loss and threatened to sue over defamation of the brand. A casual search of Google revealed over 1 million references linking Stella Artois to “Wife Beater”, some going back to the Sixties. We heard no more from the other side’s lawyers.

I’m not for a moment suggesting that his run-in with Marketing Week had anything to do with Evans’ precipitate departure from InBev less than two years into the job. Merely that high-handedness and successful branding are not good bedfellows.

UPDATE: Furious back-tracking by senior GM executives, who now realise what a PR blunder they have made. The memo was “poorly worded”, they admit; “We love Chevy. In no way are we discouraging customers or fans from using the name”; But “Chevrolet” will have to stay, otherwise foreigners (?!) won’t understand the brand. Globalisation, just like Marathon and Snickers, eh? Not.  More on the controversy here.

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