March 15 (Bloomberg) -- Interpublic Group of Cos.’s McCann Worldgroup is gaining control of a joint venture formed last year to win General Motors Co.’s Chevrolet ad business, the agency said in an e-mailed statement.
McCann will assume the 50 percent of the joint venture held by Omnicom Group Inc.’s Goodby, Silverstein & Partners, according to the statement issued yesterday. The venture, called Commonwealth, was created 12 months ago to handle the Chevrolet business. Detroit-based GM, in a separate statement, said only that it had been notified about the change in Commonwealth ownership.
The move and a January announcement to replace the brand’s Chevy Runs Deep tagline with Find New Roads essentially undo former Chief Marketing Officer Joel Ewanick’s 27-month reign at GM. The company ousted Ewanick in late July over the cost of a sponsorship deal with the Manchester United football team, people familiar with the move said at the time.
GM said initially that there wouldn’t be any changes to its marketing plans with the joint venture. As recently as Feb. 14, Chief Executive Officer Dan Akerson said on a conference call that Commonwealth “is still operative, still in place,” and savings of $2 billion over five years were still projected.
Alan Batey, GM’s head of U.S. sales and interim marketing chief, has been pushing for changes in Chevrolet’s advertising and anticipates McCann doing the bulk of advertising work at Commonwealth, two people familiar with the matter have said.
The automaker’s executives had grown increasingly frustrated with Commonwealth’s Chevrolet advertising, the people said. They believed the company had improved its cars and trucks while being unable to build marketing momentum, one of the people said.
A Chevrolet Malibu advertisement that highlighted the car’s stop-start technology, for example, was seen as ineffective, one of the people said. Malibu sales in the U.S. rose 3 percent last year, compared with the industry’s 13 percent. Deliveries this year are down 12 percent, in contrast with the industry’s 8.4 percent increase.
GM is introducing about 20 new vehicles in the U.S. this year as it works to regain market share after falling to an 88- year low in 2012.
Ewanick in March 2012 announced the creation of Commonwealth with Goodby and McCann as partners to handle all of Chevy’s advertising as part of an effort to reduce costs. The plan was to consolidate the work through one agency. GM’s largest brand by unit sales previously used 70 ad agencies around the world, the carmaker had said.
--Editors: Bill Koenig, Ben Livesey