In a move that is considered unprecedented, General Motors confirmed that it has selected a joint venture between two of adland’s most competitive agencies -- Omnicom’s Goodby Silverstein & Partners and McCann Erickson Worldwide -- to handle global creative duties for Chevrolet.
The consolidation is designed to help the client achieve one of its top goals: turning Chevrolet into a truly global brand.
Both agencies had worked on Chevrolet previously, along with about 70 other agencies around the world. Now, the account is consolidated with just one shop -- the joint venture, called Commonwealth, which will be based in Detroit.
It was not immediately clear what Chevrolet spends annually on advertising worldwide. The company does not disclose the figure, but Kantar Media estimates that the brand’s ad spending in the U.S. last year was approximately $950 million. Sources estimate global spending at upwards of $2 billion.
When GM called the Chevy review last fall it solicited pitches from four holding companies. In addition to Omnicom and IPG, Publicis Groupe and Cheil Worldwide were also invited to participate.
On a conference call Tuesday to discuss the decision, Joel Ewanick, a GM vice president and its global CMO, said that Jeff Goodby, partner and co-founder of GS&P, would head the venture. He will serve as executive chairman of an eight-person global advisory board for the joint venture. Also on that board are top McCann creative executives, including Washington Olivetto, Linus Karlsson and Prasoon Joshi.
Commonwealth will have 500 staffers around the world servicing the Chevrolet account, with about 280 people based at the venture’s headquarters in Detroit.
The initial germ of an idea that over many months evolved into the winning joint-venture is credited to Joe Garcia, president of McCann’s Midwest office and Todd Grantham, partner and group account director at GS&P, who are friends “off the field” as one source put it.
After discussing the idea they went to their respective bosses, McCann World Group CEO Nick Brien and Jeff Goodby. On the call, Goodby said it was one of “many scenarios” that was discussed with Ewanick, who liked the idea of assembling a “dream team” to service the brand.
Now that the client is moving forward on their initial idea, Garcia and Grantham have been selected as managing directors who will oversee the Detroit operation and ensure that the global entity has the tools and resources to accomplish its mission, Ewanick said.
In opting for the joint venture, Ewanick said he hoped to reach the twin goals of significant savings in overall marketing costs while “elevating the quality of [Chevrolet’s] communications around the world” in the face of increasingly intense competitive pressure from carmakers such as Toyota, Hyundai, Ford and Volkswagen.
Between the creative agency consolidation at Chevrolet and the broader GM media agency consolidation under Aegis Group’s Carat that was completed earlier this year, the company believes it can save $2 billion in costs over the next five years. Ewanick said the “biggest chunk” of that savings would come from cost reductions on the production of creative ads around the world.
The transition to Commonwealth will start immediately in most global regions, with the exception of China, India and Uzbekistan, where GM has contractual obligations to work with local agencies.
One question that Ewanick could not answer definitively on the call was one about the Chevy tagline “Chevy Runs Deep.” Will it become the brand’s global slogan? “That’s open for discussion,” he said.