The following article first appeared in BusinessWeek’s “Brand New Day” blog on September 7, 2009
Volkswagen has announced that it is looking for a new advertising/communications partner. Chrysler has just announced that they are considering non-roster agencies for projects. Bob Lutz at GM has said that the agencies for the remaining GM brands have six months to demonstrate that they have the chops to remain part of GM’s stable of agencies. A rash of car companies re-evaluating their agency partners.
So what should these companies, or for that matter any automotive manufacturer, look for in an agency?
The next five years are going to be the most competitive in a generation. The “new normal” annual sales volume for the US will be 14-16MM units, nowhere near the 18MM the market achieved a few years ago, let alone the 20MM+ some forecasters anticipated. The “new normal” is a mature market where the fight for share will be intense, the risk of commoditization ever present and the winners will be those companies who recognize that the only thing standing between them and commodity status is terrific product and a carefully crafted brand reputation.
The “winners” will be those companies with clearly differentiated brands. Those companies that make establishing and/or nurturing their brands a priority will see their share of market grow, those who focus only on retail will be treated like commodities. Automobile manufacturers do need agencies that can manage the retail side of the business but more than ever they need to take brand building seriously.
So here are some suggestions on what to look for in an agency:
1. An agency must demonstrate the ability to build a brand over the long term. Look for relationships and case histories that span years not months. Look for strategic consistency that is grounded in a deep understanding of the client and its customers. Make sure that knowledge turns into core values that form the bedrock of the brand’s communications. Look for the “red thread” that holds all the work together. Ask 2nd and 3rd level questions about the company and its brand.