Changing Gears: GM
restructuring drives away black-owned ad agency
Marcia A. Wade
(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
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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