Dive Brief:

• Ford has chosen BBDO as its new lead creative agency, following a global review that the automaker launched in April, and simultaneously announced the launch of a new agency model, Adweek reported. In a major blow to WPP, the agency holding group will remain in the mix but with a narrower scope of responsibility after decades as Ford's lead advertising partner. 
• As part of the appointment, Ford is also introducing a new agency model that will add more than 100 new in-house marketing positions in areas such as brand design, digital labs and media tools and partnerships. The company reportedly said in a statement that its new marketing approach will save $150 million annually and place a greater focus on emerging advertising tools and technology to better personalize marketing. 
• Ford also selected Wieden+Kennedy as an “innovation partner” for specific projects. WPP’s Ford-dedicated agency GTB will continue working with Ford, handling activation, media buying and planning, and shopper and performance marketing, website development, customer relationship marketing, multicultural and Tier 2 dealer advertising. 

Dive Insight:

Ford's new agency model puts it in a group of other large global brands like P+G and Unilever that are rethinking their marketing strategy and partners to create cost and creative efficiencies, embrace technology and analytics in marketing and improve transparency.

Ford, which spent more than $1.2 billion on measured marketing in the U.S., according to Kantar Media research cited by Adweek, is likely hoping to get a leg up on its competitors by offering unique experiences as more consumers expect brands to tailor experiences and messaging. Focusing on more personalization and technology is key for automakers, as they strive to attract a new generation of car buyers. Millennials have been buying fewer cars than older generations, and Gen Z’s volume of conversations around auto brands has dropped significantly. 

The diminished role for WPP, which counted Ford as one of its largest clients, comes as agency holding groups face growing pressure from clients to modernize and streamline their operations, a trend that has resulted in downsizing and lower revenues for among the holding groups that have been a dominant force in advertising for decades. WPP's leadership tried to reassure members of the dedicated Ford team in an internal memo acquired by Ad Age that indicated the full impact of Ford's decision won't be known until more details become available and insisted the group is "by no means done as we continue to deliver on multiple fronts." 

Losing Ford’s business, which generates more than $500 million in annual revenue for WPP, follows a rough few months for the ad holding company. WPP has seen several accounts go up for review, and its longtime CEO Martin Sorrell resigning in April. The company named Mark Read as its new CEO last month and also announced plans to merge agencies Young & Rubicam and VML to form a new agency VMLY&R. 

For announced that it was putting part of its ad business up for review earlier this year. In April, Ford nearly doubled its cost-cutting goal to $25.5 billion from the $14 billion it had previously announced, with about half of the cuts in sales and marketing and reduced advertising. Ford is also reshaping its vehicle lineup, with plans to stop selling sedans in North America, except for the Mustang.