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Agencies pick over Ewanick’s GM legacy

July 30, 2012

“He failed to meet the expectations that the company has for its employees,” said General Motors spokesman Greg Martin cryptically. That looks like being GM global marketing supremo Joel Ewanick’s epitaph. The marketing whirligig quit abruptly last weekend, after two years at the steering wheel of one of the world’s biggest car companies.

But just what did Martin mean by failed expectations? It appears that Ewanick fell down badly on the small print in the 5-year sponsorship deal he signed with Manchester United. Details remain sketchy, although they will undoubtedly emerge over time. Some financial liability is likely involved should GM fail to deliver on its side of the bargain; this seems to be what Ewanick ‘forgot’ to disclose to his superiors.

GM may be glad to see the back of him, but we hacks will miss Ewanick – with his uncanny ability to manufacture a headline. Here is the man who said ‘No’ to extortionate prime-time Super Bowl advertising; and put two-fingers up to Facebook – commercially speaking – just before it foundered in a very rocky public flotation. The Manchester United sponsorship was to be his masterly counter-coup: Ewanick bringing in the vibrant Old World (China and emerging markets included) to redress a marketing overspend in the tired old New.

Alas, attention to detail seems foreign to Ewanick’s nature. Now we shall never really know whether he was a marketing visionary with a bold grasp of the Big Picture, or simply a publicity-hungry megalomaniac revelling in world-renown.

What matters from here on in is the unpicking of Ewanick’s legacy. Hundreds of millions of dollars of revenue are at stake for the agencies that signed up to the Ewanick dream. Doubtless their lawyers are already assessing the strength of the contracts they co-signed with him. What now for Carat’s tenure of the $3bn global media account? And for Commonwealth, the complex advertising vehicle set up so that Goodby Silverstein and McCann Erickson could jointly service most of the global Chevy creative account? The holding companies of all three agencies – Aegis Group, Omnicom and Interpublic – have already made substantial investments in staffing up in and around Detroit to service the newly streamlined accounts.

Advertising relationships in the auto-industry have traditionally been very personality-driven. Despite a thick coating of metrics-speak in all their public utterances, this has been transcendentally true of Ewanick and his advertising coterie.

Goodby looks particularly vulnerable, given the close personal relationship between Ewanick and Goodby founder Jeff Goodby – who shared the stage at this year’s Cannes International Festival of Creativity.

All eyes will now be on Ewanick’s (at least temporary) successor, Alan Batey, head of US sales and service.

Little is known of him other than that he was once a car mechanic. But of one thing you can be certain. Agencies, on and off the GM roster, will be doing their damnedest to find out more. Just in case.

UPDATE 31/7/12: The problem with the Manchester United shirt sponsorship deal is that Ewanick paid too much, it has emerged. He committed to a 7-year deal at £25m ($39m) a year without disclosing how “full” the terms were to GM’s board. $300m represents a premium of 25% to what the current sponsor, AON, is paying – and is a lot more than Ewanick seems to have implied to his colleagues during negotiation.

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McCann and Goodby to work together on global Chevy brief, but how harmoniously?

March 28, 2012

Once again, General Motors CMO Joel Ewanick has demonstrated his ability to surprise and to innovate, with the announcement of his “Commonwealth” solution to the global Chevrolet creative account.

GM spent $4.7bn on advertising last year, and the majority of that was channelled through Chevy, a brand accounting for 70% of GM’s US sales. So, all eyes will be on what Ewanick, after much agonising, has done with one of the world’s largest creative accounts.

Which is, exactly? The easy bit is that he has fired most of the 70 agencies that were, somehow, somewhere, working on the account – superfluously bloating management and production costs.

More controversially, Ewanick has placed the two winning agencies, Goodby Silverstein & Partners and McCann Erickson, in a joint venture dubbed Commonwealth. It will be based in Detroit, home of GM, but have 3 other creative hubs dotted across the globe at Milan, Mumbai and Sao Paolo. And the controversial bit is that the two agencies – Goodby, which holds the Chevy business in the USA, and McCann, which is strong in Latin America, Mexico, China and Canada – are owned by rival ad holding companies, Omnicom and Interpublic Group respectively. Omnicom and IPG are 50/50 owners of Commonwealth, we are told, but profits will be allocated “geographically”.

That in itself may be cause for friction. But just as interesting is who and what will be running Commonwealth day to day. It is to be led by an eight-strong “global advisory board”, overseeing creative initiatives and strategy, which consists principally of Jeff Goodby, the Goodby Silverstein & Partners founder, who will be creative chairman, Washington Olivetto, McCann Worldgroup Latin America chairman and chief creative officer, Linus Karlsson, the McCann New York and London chairman, and chief creative officer and Prasoon Joshi, the chairman of McCann Worldgroup India. A hat-tip to Goodby’s creative eminence, but note McCann’s dominance on the board.

Now, before muttering “sacks” and “cats”, let’s all take a deep breath and peer long and carefully into the glass half-full. There certainly is a rational case for Commonwealth, or something very like it. And part of it is saving an estimated $2bn in production and management costs over 5 years.

What’s more, we can expect some unwonted co-operative zeal from the two rival agencies. Both will be hugely relieved they have landed the business.

Goodby started as early favourite, not least because it was hand-picked for the US business by Ewanick himself. But  the work has disappointed. And, despite the pleasing publicity surrounding the Ford-knocking Silverado spots at this year’s Super Bowl, there have been gnawing doubts at the Goodby office about the agency’s ability to retain the account.

McCann, on the other hand, desperately needed a coup of any kind to stabilise its faltering performance. True, this is not the outright win that leaves it the undisputed global agency of record earlier rumoured. But it’s a fairly decent outcome, which consolidates McCann’s already strong position in high-growth emerging markets.

But once the novelty has worn off, what then? Will the creative dream-team pull together to make Chevrolet’s global message more consistent, or will the nightmare of agency politics take over? It’s anyone guess. For that very reason Ewanick should be taken at his word in describing Commonwealth as “historic”. We’ll find out soon enough how deep Chevy really runs.


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