GM’s Mark LeNeve explains re-structuring, review of black ad agencies

By Ken Smikle
Target Market News
(November 29, 2007) The furor over General Motors’ recent announcement to re-structure its African American and Hispanic advertising agency assignments still can be heard both in the auto industry, among marketing professionals, and throughout the black community.

The automaker has issued new marching orders to begin in 2008 for its African American agencies. Vigilante, a New York-based subsidiary of French conglomerate Publicis, will be keeping its Pontiac assignment and adding Buick and GMC. The independently-owned Carol H. Williams Advertising agency may get the opportunity to return to its work for Chevy, but it has lost GMC, Cadillac and Hummer.

To re-capture Chevy CHWA will have to compete against Translation, a brand consultancy sold by Steve Stout to Interpublic last month, and against two or three additional black agencies presently being considered.

The ensuing outrage following the announcement is centered on the uncertainty about CHWA’s future after six years of work for GM, which by all counts was successful in moving the needle with black consumers.

Mark LeNeve, (pictured) GM’s North America vice president of vehicle sales, service and marketing, says the outcry caught him by surprise because Vigilante had its responsibilities expanded and nothing has been decided yet for CHWA.

In this two-part interview edited from an hour-long phone conversation with Target Market News, LeNeve explained his re-structuring strategy and the process of how African American ad agencies are being reviewed for accounts.

Let’s begin by giving you a chance to say how you view to the public reaction to the announcement.

LeNeve: The first thing is this got confused and misinterpreted outside of GM…We’ve made a number of agency changes in the last three to six months as we try to align and simplify what was an very un-coordinated roster of agencies in our portfolio that developed over 10 – 15 years, and we’re trying to get it aligned by the way we want to go to market which is through our four channels.

We have eight brands, but we go to market through four channels; Chevy is a brand and a channel, Saturn is a brand and channel, but we go to market as Buick-Pontiac-GMC combined and our dealerships are that way. Cadillac-Hummer-Saab are in our premium group.

Recently we tried to take our diversity, youth, multicultural and some of the digital agencies and get those aligned by channel as well. In the process of doing that, I think that’s what’s caused some of the confusion in the marketplace.

Assignment structure
By and large, Pontiac was already using Vigilante, part of the Publicis holding company. I’m not really sure of the ownership structure, to be honest with you, but they’re a very good agency. So it was a lot cleaner for them to handle the other two brands, which are GMC and Buick, in that channel.

With Chevrolet we had a number of different diversity agencies involved on the multicultural/African America side. Carol H. Williams is one. Translation, headed up by Steve Stoute was another one. Rather than pick and chose [between them] we wanted to put that up for review and bring in a couple more diversity agencies that have emerged that are very good and do [an ad] for the Chevy business which is a very significant piece of business.

Then, we look at those agencies as part of that review, I’m going to assign somebody to handle the premium brands Cadillac Hummer Saab and them somebody to handle GM corporate work.

I hate to make agencies do reviews…

What role did the success of CHWA’s work play in how you re-structured the assignments?

LeNeve: I think the role that the success played was Carol H. is invited to participate in the Chevy review, and her track record will part of her evaluation…and I’m sure if…

Did they do a good job?

LeNeve: I would say that over the last few years that there’s been – it’s internal business so I don’t like to talk about any of our agencies outside [of the company] – I would say that there have lots of success stories with the work that Carol H. did, that Vigilante did, that [Hispanic agency] Accent Marketing’s done. But in terms of our internal evaluations across lots of brands and executions, that’s between ourselves and our agencies. But would tell you that’s there’s been lots of success and they are a good agency.

One of the things that I think is very positive here, is that…when we hired Carol H. six years ago, it was very limited, the agencies that really had expertise in the African American or multicultural market. In fact, we weren’t even using the word multicultural back then. And…

Limited how?

LeNeve: There just weren’t that many. There was just a handful of agencies that even exited that had a specialization (a) that were minority-owned and (b) that truly had expertise and talent in helping clients such as ourselves communicate, attract and build your brands with an African American target, or Hispanic target or whatever the case may be. Now there’s a lot of agencies, and that's further testimony of the development of the African American community in business and the agency ranks.

One of the things that agencies like Campbell-Ewald that handles the Chevy account, they can’t just be a “white” agency. They got to know how to do it too. We love having the specialized expertise that a Carol H. provides or a Vigilante provides, but [agencies like Campbell-Ewald] their own agency talent in terms of client services and creative, they have to have some of that expertise as well. It’s not that we do a Caucasian plan and then a diversity plan, we kind of do one plan and the two agencies have to work together where we get the real deep insights and a real focus from an agency like Carol H. But in the general market, we won’t hit our targets or come anywhere close to them if our general market agency isn’t – you know, part of the general market now is Hispanic, African American, and Asian, etc. It’s a growing piece and growing everyday and we anticipate it continuing to grow into the future.

Can I get you to finish the thought. You said you wouldn’t hit your marks if the general market agency...what?

LeNeve: Wasn’t integrating diversity into all of the planning for the brand, for the go-to-market strategy, for the representation of the targeting of who we’re trying to sell to. For representation of the people in the advertising, all those kinds of elements. And a lot of that work they get through their own talent base and their own insight, but they also get it from advise and counsel from the specific diversity agencies that we hire.

We may come to a point at some point in the future where a diversity agency is handling the up-front [general market] stuff. I don’t draw any distinction between the two. I just want the best talent.

I’m curious about the particular take that you have on this, because it seems contrary to the way virtually all of our competitors are going to market [targeting black and Latino consumers]…The way they go to market is that there’s an African American strategy that is designed…

LeNeve: We have that too. And we do very specific media buying. We’re far and away the largest buyer on Univision and BET, etc. What I’m saying is you can’t have a Caucasian media plan and a diversity media plan. They’ve got to be synchronized, but we do do very specific targeting [for both]…

I understand that there are various targets, such as 18-34, suburban moms, etc. And, traditionally, when African Americans are the target, the African American ad agency has been the one responsible for developing that strategy. In fact, because it’s so tightly focused in communicating a message, niche advertising tends to have greater recall even with those that are not intended as the target.

LeNeve: I agree with what you’re saying. We do it that way. The distinction that I’m making – and I want to be crystal clear – is we consider diversity, the diverse audience part of the general market. That’s the only distinction I’m making.

That’s true. We’re all part of the general market. But what does that mean?

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