Dive Brief:
- Fiat Chrysler Automobiles has selected Publicis Groupe’s Starcom to lead its U.S. media business, following a six-month review, according to Adweek. The account includes media buying and planning for all of Fiat Chrysler’s brands, including Jeep, Chrysler, Dodge and Ram.
- The IPG network has handled the company’s U.S. media buying and planning since December 2009, when it won the account from Omnicom’s PHD. Fiat Chrysler suggested that the review was part of “the ordinary course of business,” instead of a specific attempt to cut costs.
- Fiat Chrysler spent $970 million on paid media in the U.S. last year and $444 million in the first half of 2018, per Kantar Media data cited by AdWeek. The numbers include all brands, but not dealer totals.
Dive Insight:
Along with moving its media business, Fiat Chrysler is also reportedly preparing to review its global media budget and could make some changes to those practices, according to Adweek. The automaker has performed better than other car brands, because of the popularity of its SUVs, but cut its full-year outlook in July after seeing weaker than expected performance in China. Fiat Chrysler saw a 17% sales increase on Black Friday this year over the same period in 2017.
The win for Publicis comes at a time when the holding group has been struggling, with its stock value falling earlier this year after it posted weak Q2 earnings. The lackluster performance continued in Q3. Like its competitors, Publicis is in the midst of executing a cost-savings program as it looks to become leaner and more agile in an attempt to address a changing marketing landscape where digital marketing continues to grow and brands take some responsibilities in-house.
Fiat Chrysler could be looking to take its media and marketing strategy in a different direction in an effort to target younger car buyers. Millennials are beginning to show more interest in car ownership. Conversations around auto brands have declined significantly among the younger Gen Zers, as the generation shows a preference for walkable destinations and ride-sharing apps.
Fiat Chrysler isn’t the only major auto brand reworking its marketing strategy and the agencies that it works with. Ford, Volkswagen and Mercedes-Benz have all conducted creative or media reviews recently. Volkswagen recently selected WPP after a creative review. Ford tapped BBDO as its global lead creative agency and is introducing a new agency model that will add more than 100 new in-house marketing positions.
Seventy-four percent of major multinational brands are reviewing their current agency arrangements, per research by the World Federation of Advertisers and The Observatory International. Companies are looking to cut costs and have more control over creative, and many see traditional agencies as lacking in their ability to adapt to digital disruption and evolving consumer needs. The research revealed that nearly 60% of brands wanted to reduce the number of agencies on their roster, and more than 50% planned to increase the number of specialists that they use.
