Chevrolet has done something unusual on its $5 billion global ad account: After a review that considered as many as 90 agency pitches from all parts of the globe, global chief marketing officer Joel Ewanick is asking his U.S. agency, Goodby Silverstein & Partners, and McCann Erickson, which handles Chevy in many foreign countries, to form a brand new agency that they will own jointly: Commonwealth.
“This is the first time that two large marketing communications holding companies have come together to form a single company,” Ewanick said in a press statement (which sits on a password-protected General Motors media site, so I can’t link to it).
There’s a reason for that: It’s a recipe for in-fighting, turf wars and bureaucratic wrangling.
The join venture is 50-50 between Goodby and McCann, two agencies owned by competing holding companies, Omnicom and Interpublic, respectively.
That, right there, is a problem: The two companies are sworn enemies and competitors. They (presumably) have many stockholders betting on the other company’s misfortunes. And now they’re supposed to work together and ignore the conflict of interest.
The chatter around Chevy’s marketing services ops has been a little weird of late. Ewanick took a long time to reach his decision (which ended up leaving in place two major incumbents) and stated publicly he was having difficulty making up his mind. Then Goodby aired an ad for the Volt that used a four-letter word.
Now, as Ad Age notes, “profit will be distributed based on geography.” Given that Goodby and McCann will be largely working on different geographies that sets them up in competition for Chevrolet’s dollars. Any dollar spent in the U.S. is Goodby’s to profit from; dollars spent abroad go to McCann’s bottom line. Ewanick, meanwhile, has stated that his goal in the agency revamp was to save money. This means the Chevy pie is of finite size, and that any budget slice taken by McCann is a slice that won’t be eaten by Goodby.
And yet founder Jeff Goodby is supposed to sit across the table from three McCann bigwigs (Linus Karlsson, Prasoon Joshi and Washington Olivetto) and make nice as if nothing unusual is going on.
Good luck with that!
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