LONDON (Brand Republic) 鈥 US car manufacturer Chrysler Group has consolidated its $1.5bn global advertising business into Omnicom Group-owned BBDO Worldwide, sending a crushing blow to fellow incumbent agency, True North-owned FCB Worldwide.
FCB has previously shared the account with BBDO and had worked for the company since 1979. Without the Chrysler business, True North loses $140m revenue each year -鈥 9% of its yearly total -鈥 and faces an uncertain future, according to analysts.
Under the deal, BBDO Worldwide will create a new unit, PentaMark Worldwide, which will be the dedicated global ad agency for all Chrysler鈥檚 brands.
The deal comes after a two-month review by Chrysler following the company鈥檚 decision to consolidate its Chrysler, Dodge, Jeep and corporate business into one agency.
FCB鈥檚 Southfield office and BBDO鈥檚 Detroit office contested the business. According to reports, the pitches of both agencies focused on cost efficiency issues, while Chrysler largely ignored creative pitches.
Both said they would cut up to $90m from Chrysler鈥檚 advertising bill if the company went with one agency. Of the $260m paid out on ads by Chrysler last year, Omnicom took $120m, about 2% of its 1999 revenue.
David Bell, True North chairman and chief executive officer, rallied by claiming the group would win another automotive account to fill the void left by Chrysler. Rumours that Toyota is looking for a new agency other than incumbent Saatchi & Saatchi are unfounded.
The loss of the account may rekindle speculation that True North could face a takeover bid. One analyst said, 鈥淣ot having a major car account could mean that a merger would be easier.鈥