It’s time to get an update to your GPS map of the rental car marketing universe. Not only is Hertz acquiring Dollar Thrifty for $2.3 billion but -- and arguably more significant from a pop-cultural POV unless you’re a Dollar Thrifty diehard -- Avis is dropping its “We Try Harder” from its advertising after a 50-year joyride, Ad Age’s Rupal Parekh informs us.
The Hertz/Dollar Thrifty deal is contingent upon regulatory approval. Hertz yesterday sold its Advantage brand to Franchise Services of North America and Macquarie Capital to ease the way. Franchise operates the U-Save, Rent-a-Wreck, Practicar and X Press Rent-a-Car businesses.
“Hertz’s acquisition of Dollar Thrifty means that more than three-quarters of the rental-car business is now dominated by three companies: Hertz, Enterprise Rent-A-Car and Avis Budget Group,” observes Forbes’ Abram Brown. “Hertz is positioned as the second largest. Enterprise remains in first, leaving Avis a distant third. Those companies also compete with emerging Zipcar.”
“Dollar Thrifty is the last of the smaller rental car companies to be snatched up by big players in a consolidation spree that has left consumer advocates worried,” writes Jim Puzzanghera in the Los Angeles Times. The Federal Trade Commission still must approve the deal. It had no comment yesterday,
“We are pleased to have finally reached an agreement with Dollar Thrifty after a lengthy -- but worthwhile -- pursuit,” said Hertz CEO and chairman Mark P. Frissora in a statement. “We have always believed that a combination with Dollar Thrifty is the best strategic option for both companies.”
“We are going to go from having 17-18% share of the total market to 24%,” Frissora tells Reuters’ Megha Mandavia and Soyoung Kim, referring to the U.S. airport rental market share. “There is still 20-30% of the market that'll still be controlled by regional players."
“Hertz began its pursuit of Dollar Thrifty in April 2007 and made a formal bid in 2010 of about $1.2 billion that Dollar Thrifty shareholders rejected,” report Bloomberg News’ Mark Clothier, David Welch and Zachary R. Mider. “Park Ridge, New Jersey-based Hertz made another offer last year that it later withdrew, citing market conditions.”
“I believe Hertz will be able to swell the company's product offerings and expand geographically in ways that would be difficult for Dollar Thrifty to do as a stand-alone company,” Dollar Thrifty chairman, CEO and president Scott L. Thompson said in a conference call with analysts.
On the cautionary side, Bloomberg Businessweek’s Krista Giovacco and David Holley point out that the deal will increase Hertz’ total debt by as much as 28% and “delay the junk-rated company’s long-sought ascent to investment grade.”
“The acquisition is a positive for the business profile, but they’re adding a lot of debt and we need to see what it does to the financial profile,” S&P analyst Betsy Snyder tells them.
Avis, meanwhile, is repositioning itself to business travelers with a campaign from Leo Burnett launching this week that carries the tagline “It's Your Space.” Reports Parekh: “The focus of the ads will be to lightheartedly communicate that the space inside rental vehicles is where business travelers can recharge or be most productive while they're traveling.”
Three spots from the campaign can be viewed here.
The new positioning is a sign that Jeannine Haas, who has been CMO at Avis for about a year, is “putting her stamp on the company,” Parekh writes. But just because you won’t see the slogan doesn’t mean it’s not there.
“We firmly believe that after nearly five decades, 'We Try Harder' is fully embedded in the Avis DNA, and defines the spirit our employees embody to deliver superior customer service,” Haas tells Parekh.
Paula Green, who wrote the “We Try Harder” line when she was at Doyle Dane Bernbach in 1962, spoke about the impact the motto had on the entire organization in a “Project:ReBrief” experiment with Google to see if “the ideas that defined the advertising industry in its infancy inspire a whole new generation of creatives and marketers?”
Green admits that her cell “only makes phone calls.” Still, there are wonderful insights in the video from the copywriting great who also penned the lyrics to “Look for the Union Label” which, quaint as it may seem, remains a rousing way to start the day.