By - CTL
October 9, 2018

By E J Schultz & Megan Graham.

Concluding a high-stakes global creative agency review, Ford has hired BBDO as its lead global brand creative agency. But it will keep WPP for significant pieces of the business, including media planning and buying, shopper marketing and CRM. WPP will also retain Ford’s multicultural and so-called “tier 2” dealer advertising. Wieden & Kennedy is coming aboard as a creative and innovation partner for specific projects, according to Ford.

Ford will also bolster its in-house marketing with 100 global marketing positions tied to brand design, media tools, technologies and partnerships as well as digital labs and customer experience, the automaker announced.

With the review, Ford is targeting $150 million in “annual efficiencies,” as part of what it describes as a “more agile marketing model.”

“Ford already is one of the most recognized and respected brands in the world,” said Joy Falotico, Ford’s group VP and CMO in a statement announcing the agency choices. “In this pivotal moment of reinvention and transformation, we’re excited to partner with world-class creative agencies to unlock the full potential of the iconic Blue Oval.”

“Today is a big big day,” BBDO Worldwide president and CEO Andrew Robertson said in a statement. “We have a wonderful new brand to help build. I could not be more proud of the hundreds of people around the world who made this happen, or more grateful to Ford for their confidence in us.”

Digital experience agency Organic and TLGG Consulting, part of the newly formed Omnicom Precision Marketing Group were a part of the core pitch team along with BBDO.

Marketing consulting company Flock Associates was the consultant on the review.

“We gave this review everything we had: it was an extraordinary effort by the entire global team over many, many months,” Global Team Blue CEO Satish Korde stated in an internal agency memo. “We accept this difficult decision with our heads held high and thank everyone for their contributions.”

The decision means WPP and its new CEO, Mark Read, avoided the worst-case scenario of losing everything that was under review. Still, it’s hard to portray Ford’s decision as anything but a setback for WPP, considering the size of the account and the historic ties between the two parties. Ford has continuously worked with WPP agencies since 1943, when it hired J. Walter Thompson. Ford today remains one of WPP’s largest clients when measured by revenue. The portions of the account that WPP kept, however, could still translate to meaningful revenue for the holding company.

Pivotal Research senior analyst Brian Wieser said in an analyst note that an account of that size would generate between $500 million and $600 million in annual revenue, and said the new setup suggested less than half of the account would be leaving WPP.

He added for Omnicom the win is “clearly positive” and at the holding company level might represent a nearly 2% increase in organic revenue starting in November. Pivotal estimates WPP will see a drop in organic revenue “slightly more than -1%” beginning in November, Wieser wrote.

Neal Arthur, Managing Director, W&K New York, said, “Working together to help build the future of the Ford Motor Company is as big, as interesting and as exciting as it gets. They have the people, the brand and the vision to lead the industry and we’re humbled to be able to play a role at this moment in their history.”

The automaker is the nation’s seventh-largest advertiser, shelling out $2.4 billion in 2017, according to the Ad Age Datacenter. Globally, Ford reported advertising costs in 2017 of $4.1 billion. WPP handles the account via its Ford-dedicated shop called Global Team Blue, known as GTB, which is headquartered near Ford’s offices in Dearborn, Michigan, and has offices around the globe, with roughly 3,000 people dedicated to the account. WPP also routinely brings in agencies outside of GTB to work on the business. GTB handles Ford’s media planning and buying that was never under review.

Ford launched the creative review in April amid a major cost-cutting drive and organizational changes that include exiting the sedan business in North America to focus on more popular SUVs, crossovers and trucks.

The automaker, whose stock price has tumbled in recent months, is targeting $25.5 billion in cost cuts, with half of that coming from sales and marketing, including reduced advertising. Last week, Ford confirmed it would be cutting an unspecified number of its 70,000 salaried workers. Total Ford brand sales fell 2.1% in the first nine months of the year, according to data from Automotive News.

Excluded from the agency review from the beginning were Ford’s China business, public affairs, the U.S. dealer business and Ford’s luxury Lincoln brand, now parked at WPP’s Hudson Rogue. That still left plenty on the table around the globe and in the U.S., where Ford last year shovelled $893 million in measured media into the Ford brand, according to Kantar Media figures from the Ad Age Datacenter.

Ford over the years has outsourced so much of its marketing and ad duties to WPP that completely severing ties with the holding company could have caused major disruption inside Ford. There was an outside chance Ford could have gone that route, especially with Omnicom, which has the size and scale to replace WPP. That meant Wieden & Kennedy was viewed as a “frenemy” inside WPP, because the independent shop never seemed like a threat to win the entire account. With BBDO now firmly entrenched in the account, it’s possible that Omnicom could make more gains in the months and years ahead, putting WPP on the defensive.

WPP has been partnering with W&K on Ford on a U.S. brand campaign that is expected to launch in October. W&K won lead creative duties on the assignment in late August amid the larger review. The campaign, which is expected to be called “Ford Proud,” will likely be shown at Ford’s national dealer meeting this month in Las Vegas.

While the review put WPP under stress, the upside is that the holding company is expected to be freed from tight exclusivity rules in which some of its biggest agencies had to get Ford’s approval to pitch other automotive accounts. That arrangement covered WPP agencies and their subsidiaries that were part of the multiagency dedicated Ford entity called Team Detroit that was formed in 2006, including JWT, Ogilvy Y&R, Wunderman and Mindshare.

WPP is already chasing the Volkswagen account, which has been under global creative review since April, potentially giving WPP an avenue to make up some of the Ford loss. WPP is said to be competing with Publicis Groupe for VW’s North American business, according to people familiar with the matter. VW’s U.S. incumbent, Interpublic’s Deutsch, has already been notified that it will be let go.

First published in AdAge.

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