Chrysler Ad Firm Cuts 200 Workers

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Chrysler Group's lead advertising agency, BBDO Worldwide, has cut roughly 200 jobs at its Troy office in a streamlining move that mirrors cost-cutting measures being made by Detroit automakers.

BBDO also plans to move some creative assignments related to its Chrysler accounts to other sites, including its main New York office.

The Troy office employs 1,800 workers and handles ad and media accounts for the Chrysler, Jeep and Dodge brands.

"We have been on a constant drive to create operating efficiencies, while maximizing the effectiveness of what we do for our client," Joe Garcia, head of BBDO's Troy office, told employees in an e-mail distributed on Feb. 12, four days before the cuts. "This goal is driven both by our own desire to run a good business, and our client's need to minimize costs."

BBDO notified affected workers last week.

BBDO is the latest ad agency caught in the crosshairs of the automotive industry's push to reduce expenses in hopes to gain a competitive edge. Last month, WPP Group moved five ad agencies to Dearborn to be closer to client Ford Motor Co.'s headquarters.

"Everybody is looking at ways to save, and it's not going to stop," said Jim Sanfilippo of AMCI Corp., an auto industry consulting firm in Detroit.

General Motors Corp. changed its media buying agency last year and recently installed a new payment plan with ad firms that could further save costs, Sanfilippo said.

"Marketing costs are very large costs, so obviously there's going to be scrutiny," he said.

But the push to lower advertising costs isn't just happening in Detroit. Last year, Kia Motor Co.'s ad agency contract was reviewed.

Ad agencies are typically vulnerable when auto companies look to reduce costs.

"Anytime a cold breeze comes along, it's the first dollar eliminated," University of Detroit-Mercy marketing professor Michael Bernacchi said. Automakers, he said, often perceive advertising expenses as an accounting item and not an investment.

Over the past few months, Chrysler has worked with BBDO to redefine creative responsibilities, which ultimately will help reduce costs, Chrysler spokeswoman Suraya Bliss said.

"We always want to spend money as efficiently as possible," Bliss said.


source:
Josee Valcourt / The Detroit News