Ford Selects Omnicom's BBDO as Key Creative Advertising Agency

The automaker announced the appointment Monday as part of a new marketing strategy that would save $ 150 million a year. Ford is also planning to put more emphasis on emerging technologies to create more personalized brand marketing.

This news is a setback for WPP PLC, one of Ford's main customers, and comes a few weeks after the advertising firm appointed a new general manager. Ford began re-evaluating its marketing model several months ago, including the company's relationship with WPP, which had been working with the distributor for a decade.

As a result of this review, Wieden + Kennedy has been named "Creative and Innovation Partner" for specific projects, Ford said.

WPP will continue to work with Ford on a variety of tasks, including media planning, media buying, customer and performance marketing, website development and relationship marketing.

While it is unclear whether WPP has maintained a reduction in fees on its activities, the loss of Ford's creative tasks will result in a reduction in annual revenues of $ 100 million to $ 150 million, according to WPP. a person close to the company.

A spokeswoman for WPP declined to comment on the issue of fees.

Ford's creative work accounted for between 1% and 1.5% of WPP's revenues, while Ford's overall rights accounted for 5% of revenue, analysts at Kepler Group LLC said in a note last month. WPP recorded a business turnover of $ 19.7 billion last year.

"We accept this tough decision, head tall," Satish Korde, who leads WPP's work on Ford's account, said in an internal memo. "WPP is currently evaluating the impact and implications of this decision, which can not be fully determined until more details are known."

In a note published Monday by Brian Wieser, Pivotal analyst, this news is negative for WPP, but "not as negative as it would have been, given the parts of the activities that they keep, which are usually the fast-growing aspects of any given business. " Account."

Ford is under pressure to cut costs as profits fall and its share price remains stuck near the lows of the decade. General Manager Jim Hackett, appointed last year, focused on improving Ford's "fitness" in the near term, including a $ 25.5 billion reduction in cumulative costs. 'here 2022 in the fields of engineering, manufacturing, marketing, etc.

WPP has created a group of agencies dedicated to the automotive giant, now called GTB, taking advantage of the advertising and marketing resources of its various groups of agencies. The Ford account has generated annual revenues of more than $ 500 million for the holding company, said people aware of the problem at the Wall Street Journal in April.

– Mike Colias contributed to this article

Write to Nick Kostov at [email protected]