Restructuring plan by GM will eliminate all black ad agencies of record

By Ken Smikle
Target Market News
(November 19, 2007) By the end of the year General Motors says that it will be stripping the black-owned ad agencies it works with of their account assignments. According to published news stories, the work is being given instead to general market agencies as part of GM’s plan to restructure its marketing efforts.

The announcement from GM, the world’s largest automaker, runs against the current practice throughout the auto industry. Targeting African-American car buyers with advertising created by African-American ad shops has been a long-standing marketing strategy which research has shown to be effective in competing in the marketplace.

The elimination of black ad agency expertise by GM, if instituted, would make the global corporate giant the only carmaker engaged in such a strategy at a time when it is trying to reverse its troubled financial status.

Under the plan the African-American focused ads for Cadillac, GMC and Hummer would be taken from the Carol H. Williams Advertising agency and re-assigned to Modernista and Leo Burnett Worldwide. Chevrolet, which CHWA also handled, has been put up for review. CHWA is among those black agencies invited to compete for the account.

Black consumer advertising for both Buick and Pontiac, currently handled by Vigilante Advertising, would be re-assigned to Leo Burnett, which owns an interest in Vigilante.

Besides the fact that GM would be the only U.S.-based car manufacturer without a black-owned ad agency of record for any of its eight brands, the juggling comes at a time when research suggests that the work produced by incumbent black agencies has produced positive results. Toyota, which moved past GM this year to claim the title of Number One car company, has long retained the Burrell ad agency to produce its African-American advertising.

According to the auto industry’s leading research source, R.L. Polk, Buick, Cadillac and Chevrolet are the top three auto lines with African-Americans. Pontiac and GMC are sixth and seventh on the list.

A company spokesperson insisted that the moves in accounts would improve GM’s ability to produce so-called multicultural messages.

”It is not the case at all that we are pulling away from diversity marketing,” GM spokesperson Ryndee Carney told Automotive News. “This is by no means an indication that we are not committed or spending less. We will not have one-size-fits-all.”

Accentmarketing, a minority-owned agency under the Interpublic Group that produces ads for Latino consumers, will continue on its assignments for Cadillac, Chevrolet and Hummer. Accenmarketing’s Hummer and Pontiac accounts will be given to Leo Burnett.

According to Advertising Age, GM was the nation’s third largest advertiser in 2006, with $3.2 billion in expenditures.

Representatives at Carol H. Williams and Vigilante agencies refused to comment on the account shifts.


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