Changing Gears: GM restructuring drives away black-owned ad agency

By Marcia A. Wade
BlackEnterprise.com
(November 27, 2007) In order to achieve what General Motors spokeswoman, Ryndee Carney, describes as consistency and efficiency, GM decided to reorganize its 2008 advertising roster in a manner that has temporarily and possibly permanently booted the black-owned Carol H. Williams Advertising Agency (No. 2 on the BE ADVERTISING AGENCIES list with $367.5 million in billings) from its garage.

The African American accounts for six of GM's eight U.S. vehicle brands have been reassigned to general market agencies. Carol H. Williams Advertising managed four accounts: Cadillac, Chevrolet, GMC, and Hummer. GM reassigned each of those accounts, with the exception of Chevrolet. They reassigned Cadillac and Hummer to Modernista, explaining that "both [brands] feel that their overall campaign will be developed with a multicultural point of view," says Carney. The creative work for Buick, Pontiac, and GMC has been consolidated with Leo Burnett Worldwide.

Carney says that although the Chevrolet account is up for review, Carol H. Williams is still a contender. Translation Consultation & Brand Imaging may also be in that running. Translation, which was black-owned until its acquisition by Interpublic Group of Cos. in October 2007, also helped with the Chevrolet account by marrying Mary J. Blige and other musicians with their favorite Chevy. Chevrolet expects to choose an agency before the end of Q4 2007.

"Carol H. Williams has done a stellar job with GM," says Robert J. Dale, president and CEO of Chicago-based R.J. Dale Advertising and Public Relations (No. 14 on the BE ADVERTISING AGENCIES list with $44.5 million in billings), one of the country's most experienced black advertisers.

But Carney emphasizes that the reorganization has nothing to do with agency performance. "There was a need to have consistency. We did not need multiple agencies providing the same work," she indicates.

According to Ken Smikle, founder and publisher of Target Market News, a Chicago-based research firm that monitors African American marketing and media, "the only consistent growth GM has had with its top brands is with African American buyers."

In 2006, R.L. Polk & Co., an auto industry and marketing research firm, reported that while personal registrations in the auto market were down approximately 1% from 2003 to 2005, new vehicle sales to minority customers were up approximately 18%.

In the same report, Lonnie Miller, director of industry analysis at R. L. Polk & Co., said automakers who neglect repeat business from minority customers "risk missing out on the biggest growth opportunity in the auto industry right now." Miller later cited that by 2010 minority buying power is projected to grow by 14%.

"With the increase in populations of people of color, you would think that would lead to more opportunity for agencies of color," say Dale. GM's ad agency reform is a risk that other automakers are not willing to make and for good reason. "African American agencies are more expert at niche marketing whether they are talking to working moms, young adults or African Americans. They have earned their bread and butter by crafting very focused, strategic ads," says Smikle. "[Carol H. Williams Advertising] should have been given the opportunity to compete for general market business instead of having everything they’ve worked on taken away from them."

Carney says "We need an agency that has scope, size, and global capability to handle [our general market business]. I'm not personally aware [of a black-owned agency with that capacity], that's not to say that they don't exist." Dale suggests that the onus to include black-owned agencies is on the Association of National Advertisers, whose members include major automakers. He says they should adopt and apply their own version of the NFL’s "Rooney Rule," which requires football teams to interview minority candidates for a head coaching opportunity.

"Only after the Rooney Rule, did African American coaches began to get hired as head coaches," says Dale implying that without that rule it is unlikely that world would have witnessed two black coaches battling it out in the 2007 Super Bowl.

"Some of us at black-owned agencies feel that we should have the opportunity to compete for and win general market business and not just be restricted to multicultural or African American opportunities," expresses Dale. "This is even more critical now that it appears that we are being stripped of multicultural business that is now being handed to general market agencies. "I had an excellent relationship with GM. I am still working with them to work through this. I am being told it is for efficiencies, but it is very tough," says Carol H. Williams, president and CEO of Carol H. Williams Advertising. "We understood and continue to understand that GM is committed to African American advertisers, but perhaps this business consideration doesn’t reflect the importance of the loyalty of the African American market to GM," says Williams.


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