General Motors expects to save about $2 billion during the next five years by centralizing most of the global advertising for its Chevrolet brand.
The Detroit company said Tuesday that two competing agencies, San Francisco-based Goodby, Silverstein and Partners, and New York-based McCann Erickson Worldwide, will join to form a new company to handle most of Chevy's ads.
Goodby, Silverstein now does Chevy advertising in the U.S., including the "Chevy Runs Deep" campaign featuring the voice of television and movie star Tim Allen. McCann handles Chevy ads in China, Latin America, Mexico, Canada and other markets. The new company, called Commonwealth, is an equal joint venture between the agencies.
Among the new agency's first tasks: Evaluate the "Chevy Runs Deep" campaign and decide whether to keep it. GM global marketing chief Joel Ewanick on Tuesday questioned whether Chevrolet needs a theme like that, but also said the campaign is gaining acceptance in many countries. "It's open for discussion and we haven't decided that," he said, adding that a decision should come this summer.
"Chevy Runs Deep" is a series of ads showing how cars and trucks are part of significant moments in people's lives, such as bringing a newborn baby home from the hospital.
Before the consolidation, which begins immediately, Chevrolet had 70 ad agencies around the globe. Now Commonwealth will handle and supervise creative work worldwide out of Detroit for all markets except China, India and Uzbekistan, where GM has joint auto-making ventures. McCann will continue to handle ads in China and India, and Uzbekistan will be contracted as needed.
Much of the savings will come from cutting production of multiple ads for different markets around the world and instead adapting the same ads for different markets, Ewanick said. The company also will save money by hiring a single agency, Carat, to buy television time and other media across the globe.
GM hopes to take some of the savings to its bottom line, but it will use part of the money to strengthen marketing of Chevrolet, the company's largest brand, Ewanick said. GM spends almost $4.5 billion a year on advertising worldwide for all of its brands.
Commonwealth won the business after GM reviewed the creative work on Chevrolet. The new agency will focus on "growing Chevrolet into a global iconic brand," Ewanick said.
The new agency will bring about 280 jobs to Detroit from suburban and other agency locations.
Goodby, Silverstein is part of the Omnicom Group of ad agencies, while McCann Erickson is part of Interpublic Group.
The two groups often compete for the same advertising business, but will set that aside for the Chevrolet contract, said Jeff Goodby, co-chairman of Goodby, Silverstein, who will serve as creative chairman for Commonwealth. "We're not going to think about that. We're working for Chevrolet," Goodby said.
The change is part of a watershed year for the century-old Chevrolet brand, Ewanick said. The brand sold 4.76 million vehicles globally last year and is on pace to top 5 million this year as it adds models in market segments where it had none, he said.