Ford to Seek Bids for Parts of Advertising Business -- 3rd Update
April 20 2018 - 5:19PM
Dow Jones News
By Alexandra Bruell
Ford Motor Co. has decided to put parts of its immense
advertising account up for review in the coming weeks, dealing a
blow to its incumbent agency, WPP PLC.
WPP's dedicated agency for Ford, called GTB, announced the
decision on Friday in a memo to employees. Ford's decision means
that agencies beyond WPP will be able to pitch for the portions of
the auto maker's marketing business that are up for review.
"WPP will have an opportunity to compete with other firms to
retain these portions of the business, and will remain Ford's
agency of record in some other key areas," GTB said in its
memo.
Ford confirmed that it will be seeking bids for some of its
business.
The news is a setback for WPP, which counts Ford as a top
client, and comes on the heels of the abrupt exit of WPP CEO Martin
Sorrell less than a week ago. Ford began re-evaluating its
marketing model months ago, including its relationship with
WPP.
WPP, which has been working with Ford for decades, had created a
dedicated agency group for the automotive giant, pulling in ad and
marketing resources from its various agency groups. The Ford
account generates more than $500 million in annual revenue for the
holding company, according to people familiar with the matter.
"We are committed to driving greater marketing efficiency,
effectiveness and customer insight, leveraging the latest tools and
technology," a Ford spokesman said. "We are going to place some
portions of our advertising business up for bid with other
agencies, including WPP, beginning in the coming weeks. No
decisions have been made."
"We value the talented and creative women and men at WPP," the
spokesman added. "They are trusted partners and curators of the
Ford brand."
"GTB/WPP has been informed that its creative business with Ford
is up for review," a GTB spokesman said. "WPP/GTB is the most
capable, passionate, informed and dedicated partner to build Ford's
vision of the future. We will be enthusiastically responding to
Ford's request for review in the days ahead."
Ford's account with WPP in China, as well as its U.S. dealer
business and some other functions, aren't being put up for review
and will be retained by WPP, according to the memo.
Ford spent $1.22 billion on U.S. media in 2017, not including
spending with various social platforms, according to a Kantar Media
estimate.
Jim Farley, president of global markets at Ford, said at an
investor conference in January that the company was targeting $200
million a year in fixed marketing savings.
"We're moving to a digitally focused model, and we're going to
target our advertising on a more individual basis using advanced
analytics and the new digital platforms," he said at the time.
"This will enable us to target the right customer with the right
message, and that's going to drive efficiency."
WPP also is defending a few accounts that recently went up for
review, while working to make up for account losses in the past
couple of years, including AT&T, Volkswagen and American
Express.
The advertising company has reported a series of disappointing
financial results, sending its shares tumbling more than 30% in the
past year. In March, the company told investors that it is setting
budgets for 2018 on the assumption of no growth in revenue or net
sales.
--Suzanne Vranica and Christina Rogers contributed to this
article.
Write to Alexandra Bruell at alexandra.bruell@wsj.com
(END) Dow Jones Newswires
April 20, 2018 17:04 ET (21:04 GMT)
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