Posted by: David Kiley on November 14, 2005
BMW North America selected GSD&M, Austin Texas as its new advertising agency and guardian of its more than 30-year old “Ultimate Driving Machine” positioning.
It is coup for the Texas agency as the BMW account, while not the largest account in the auto sector, is one of the most prestigious and sought after. BMW spends about $160 million on advertising per year.
GSD&M, Austin is an agency best known for its work for Southwest Airlines, Walmart, Krispy Kreme, The US Air Force and AARP. The agency’s CEO, Roy Spence, is known for being one of the more charismatic ad men in the business, and has done work for Democratic Party campaigns and candidates, including former President Bill Clinton. It’s said that if he worked in New York, he might have a daily TV show on CNBC instead of New York ad man Donny Deutsch. GSD&M had previously handled Land Rover advertising.
BMW decided to review its advertising account last summer after Jack Pitney took over as head of marketing after a successful run as head of BMW’s MINI USA unit. But Pitney was taken aback when ad agency Fallon McElligott, Minneapolis refused to participate after handling the business for a decade. BMW whittled the contenders down to GSD&M of Austin, Tex, KB+P of New York, The Martin Agency of Richmond, Va and Anomaly of New York. Last Friday, it narrowed the search to GSD&M and KB+P, and have spent the last week seeing which agency offered the best compensation package. BMW has been in cost cutting mode, so price is a factor.
BMW is a brand far from being in trouble. It has rising sales—it’s well ahead of rival Mercedes-Benz and U.S. domestic Cadillac, trailing only the Lexus brand—and well received new products. It seems to be over the hiccup it experienced in 2001-02 when it launched its all-new 7 Series to catcalls and brickbats for what many deemed an ugly rear-end and impossibly balky in-cabin electronics system that it made it an adventure in driver distraction to find a radio station. But the company is still feeling skittish about an image too heavily steeped in “performance” at a time when consumers seem to be looking for brands that stand for larger values. Consider these passages from BMW’s confidential brief to the agencies competing for the business obtained by Business Week:
“BMW wants to bring the excitement back to the brand and restore the equilibrium between their products and their marketing communications. Remember, your challenge is not to reinvent the brand but to evolve the marketing from its current one-dimensional focus on performance…
Ideally, this new platform will be sustainable over time, yet offer the flexibility to encompass not only where the company is currently headed—but where they might be headed in the future given the unpredictable nature of the automotive business. Think alternative fuel sources and growing sales volume with a successful but polarizing brand. In essence, redefine performance so that it is more than windy roads with fast music….How can BMW expand the current customer base? How do you get the people who admire BMW, who possess BMW values, who possess the BMW gene—but don’t place BMW on their shopping list—to place BMW in their consideration set? In sum, how do you get them to want something they don’t consciously want to own? How do you arouse that latent desire? In addition, how will you convince those who purposely choose not to buy BMW because they think the brand is “too cold,” “not luxurious,” or “not relevant”?
That seems a pretty good snapshot of how BMW as a company currently assesses its brand. But, unlike a lot of companies looking to change their stipes a bit, they have rising sales and strong and defined brand image from which to work. In many ways, that makes the job of the new agency tougher. If the brand was on fire, a new ad agency would be free to make wholesale changes. This is more like being asked to consult with Martha Stewart about how to redecorate her house.
Ad agencies clamor for car accounts, because they traditionally signal a turning point for the firm. More than toothpaste or department store accounts, they are businesses that a whole agency can rally around. They can also be accounts, with many demands and pressures, that can eat up agencies. BMW in the early 1990s gave its business to The Mullen Agency, a smallish Wenham, Mass. Agency, which held onto it for only a short time after failing to create compelling creative, and was hobbled for years by the experience.
Since many BMW bigwigs and dealers were unhappy the review resulted in Fallon, which had among other things created the successful BMWFilms series, taking a walk, the pressure on GSD&M to produce good work fast will be as heavy as Martha watching a decorator remake her personal lair.