Advice For VW, GM, Chrysler In Tapping New Ad Agencies

Posted by: David Kiley on September 7, 2009

By Cameron McNaughton
Principal, Tree Farm Partners.

Volkswagen has announced that it is looking for a new advertising/communications partner. Chrysler has just announced that they are considering non-roster agencies for projects. Bob Lutz at GM has said that the agencies for the remaining GM brands have six months to demonstrate that they have the chops to remain part of GM’s stable of agencies. A rash of car companies re-evaluating their agency partners.

So what should these companies, or for that matter any automotive manufacturer, look for in an agency?

The next five years are going to be the most competitive in a generation. The “new normal” annual sales volume for the US will be 14-16MM units, nowhere near the 18MM the market achieved a few years ago, let alone the 20MM+ some forecasters anticipated. The “new normal” is a mature market where the fight for share will be intense, the risk of commoditization ever present and the winners will be those companies who recognize that the only thing standing between them and commodity status is terrific product and a carefully crafted brand reputation.

The “winners” will be those companies with clearly differentiated brands. Those companies that make establishing and/or nurturing their brands a priority will see their share of market grow, those who focus only on retail will be treated like commodities. Automobile manufacturers do need agencies that can manage the retail side of the business but more than ever they need to take brand building seriously.

So here are some suggestions on what to look for in an agency:

1. An agency must demonstrate the ability to build a brand over the long term. Look for relationships and case histories that span years not months. Look for strategic consistency that is grounded in a deep understanding of the client and its customers. Make sure that knowledge turns into core values that form the bedrock of the brand’s communications. Look for the “red thread” that holds all the work together. Ask 2nd and 3rd level questions about the company and its brand.

2. Look for a creative product that evolved over time to keep it fresh, but never wavered from the brand’s strategic underpinnings. Executional approaches should change to keep the brand fresh, interesting, and to reflect current consumer tastes and sensibilities but they should always speak from the brand’s core positioning.

3. Ask the agency to show you the work they’ve done that was a mistake for the brand. Any agency that has worked on a brand for long period of time has done work that missed the mark. Ask why they feel the work was not appropriate and what caused it to happen, you’ll learn a lot about the agency.

4. If you ask for speculative work don’t expect to find a “silver bullet” in it, instead try to understand how they got to the work. First of all, there are no silver bullets. It is extremely unlikely that an agency that has worked on your business for a few weeks will come up with an idea that will instantly establish your brand. If it were that easy, your current agency would have done it already. Instead try to understand how the people on the team think about problems and approach solving them. Look for people who really want to dig in and understand your company and products.

5. Look for an agency that has very clear ideas on what it takes to build a brand in the incredibly fragmented media world we now operate in. Building a brand for boomers as young adults was an entirely different proposition than establishing that same brand for their children will be during the next five years. The agency should have clear point of view on how to best use social media, the digital space and traditional media. Not just the capability of implementing all media types but a clear perspective on how to use them to establish and build your brand.

6. Make sure the agency understands the importance of the retail side of the business and can execute against it. Managing the retail side of an automotive account is a huge and critical task; your new agency must have the chops to handle it. On one hand they must understand the critical importance of the dealer network and the company’s relationships with the dealers, on the other they must have the operational skills to execute. Most importantly the agency needs to help you balance the retail needs of the business versus the goal of establishing brand preference.

7. The agency team must have experience running automotive business. This does not mean that everyone on the team must be “car guys.” In fact, it would be a mistake to hire a complete team of “car guys.” After all you’re not expecting the agency to design and engineer products, you want them to help you sell them! I would suggest that at least the team leader should have automotive experience. What you don’t want to do as a client is spend your time teaching the agency the basics of the car business. You need a leader who can focus the agencies efforts in the right areas, get the right agency talent in the right positions and work closely with you and your colleagues to develop business solutions. The agency needs automotive experience so that it understands the issues you face and doesn’t waste time.

8. Hire people who you like and enjoy working with. Seems obvious, but don’t ignore behaviors that irritate you during the pitch. If the agency is arrogant and doesn’t listen during the pitch process then you can be certain they will behave that way after you have hired them. Ask the agency to involve key members of the team that will actually work on the business, but also recognize that no agency has a team sitting around waiting to work on a large automotive account.

Finally, don’t give the “brand building” side of the business lip service. Historically most car companies talk about the importance of their brand but when things get tough, the brand budget is the first thing cut. You can hire a great agency that is more than capable of helping you build your brand but if you underfund the effort or don’t commit to it, the best efforts of the agency won’t matter.

More than ever, having a powerful automotive brand will drive business in the hyper-competitive “new normal” US auto market. Finding the right agency partner will be a critical success factor.

Tree Farm Partners is an automotive marketing consulting firm that works with ad agencies and auto companies on projects including ad agency reviews.

Reader Comments

m.r.

September 7, 2009 5:36 PM

car makers should concentrate on making better cars at better prices than try to outdo each other in BS ad campaigns.
consumers are not as stupid as some well paid execs think they are. or, are they???

Lorraine

September 8, 2009 11:15 AM

One would not think the selection of the ad agency would be such a key factor in the successful re-emergence of these brands but you have connected the dots in a way that shows it is an important first step; any of these companies would be well served to have you efficiently point them in the right direction, lest they flounder here too..

Gordon Chung

September 13, 2009 11:47 AM

I was serving VW China a couple of months ago from the agency side. The communication mix for any campaign is quite complicated as it involves different suppliers.

The leading agency should have the resources and commitment to help the client organise the overall campaign; each element has to have a common theme and falls in the right timing.
Another asset for any good agency is the understanding of the consumer.

Not producing good campaigns is not always the problem of the agency. Most manufactures knows how to make cars, but very little of them have built in USP when they design it. The FMCG industry has done an excellent job in this area; look at all P&G advertising; their USP are based on consumer insights and is part of their unique ingredient.

So; ask not what your agency can do for you, ask what you can do for agency. Then, together; both the cleint and agency can produce excellent output in their own fields.

Jim Laliberte

October 9, 2009 6:24 PM

American car manufacturers need to get across a simple message:

"We are making the best vehicles in the world and will back them with the best warranty. Vehicles designed to go 300,000 miles and guaranteed bumper to bumper for 200,000. Vehicles built like a tank that ride and handle like nothing you have experienced.

Come on in. We want your business back and will give you a 60 day money back guarantee. No strings. We're back, America, and we want to amaze you with quality."

Now, all of you American manufacturers that have watched the Japs and Koreans take your business for the last 30 years........get a clue.

You don't need fancy ad agencies, you need common sense. People would rather buy American like they used to. Now you need to win them back. Call me, I can help.

Jim Laliberte
Liberty Marketing
916-346-4571

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News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

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