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Chrysler’s New $40 Million Ethnic Marketing Strategy

By Ken Smikle

In an unexpected annocement, Daimler Chrysler’s Chrysler Group has put both its
African- American and Hispanic advertising accounts under review. The action has
raised numerous questions about the automaker’s future strategy and budget for
ethnic marketing, and its commitment to assign the accounts to minority-owned ad
agencies.

The incumbent agencies, Don Coleman Advertising and Montemayor y Asociados, were
informed of the review last week, at the same time that letters were being sent
inviting presentations from other agencies. DCA was generating $25 million in
annual billings from Chrysler, while Montemayor was receiving $15 million. Both
agencies were consolidated last week into the newly formed GlobalHue, of which
Don Coleman is chairman and CEO.

Chrysler officials said new agencies will be chosen in eight weeks and that the
review will also usher in a number of changes in their approach to attract
ethnic consumers. James Kenyon, Chrysler’s senior manager of sales and marketing
pr, told Target Market News that of the approximately 20 agencies that were sent
invitations to bid, “most are multicultural shops.” He would not comment on how
many were black-owned or Hispanicowned. Compensation for these agencies will
change from a commission basis that produced an estimated $40 milllion in
billings to one based on fees and incentives. Kenyon said “revenues going to
these companies will be between $4 million and $6 million.”

“We are moving away from solely dedicated creative for African Americans, Asian
Americans, Hispanic Americans and the gay, lesbian, bisexual and transgender
communities,” stated Jeff Bell, vice president, marketing communications,
Chrysler Group. “Instead, we are moving toward serving those dedicated markets,
and, at the same time, doing a much better job of urban marketing in general.”

Since arriving from Ford a year ago, Bell has been shaking up Chrysler’s
marketing practices with an emphasis on reducing costs. In a December 2001 story
in the Wall Street Journal, Bell said that the car company reduced the total
number of ads it produced in 2000 from 85 to 40. “It’s not a matter of majority
and minority,” Bell was quoted as saying in the article, “It’s a matter of major
influencers in popular culture.”

One strategy Chrysler hopes to use in African- American and Hispanic ads and
commercials is to make them more “ethnically neutral,” by de-emphasizing the
race of people portrayed. Keynon said the objective is to have agencies utilize
“creative that is vertical and also can be used in the general market so that it
just doesn’t just show up on BET but will be on ESPN and Fox and other networks
as well. [We] want to say that this ad is going to be in Black Enterprise and
People and Esquire.”

In this week’s Advertising Age, Bell cited what the sports shoe company Reebok
is doing through its agency, the Arnell Group as an example of an approach that
he finds appealing. “They are trying to do it with an urban mindset,” he’s
quoted as saying. The Arnell Group was hired by Chrysler one month after Jeff
Bell’s arrival last year to be a strategic partner with PentaMark, its lead ad
agency.

In a press release, DCA asserts that through research it conducted with
Yankelovich, it has pioneered the “Urban Mindset” attitudinal model. “There are
opportunists coming to the fore with no credentials who want to capitalize on
the urban mindset,” said Coleman in the release. “GlobalHue offers bona fide
market performance to its clients.” Though invited to make presentations, Don
Coleman told Target Market News he’s not certain his incumbent agencies will
pitch to retain Chrysler’s business. Chrysler’s new approach to marketing to
African- Americans is departure not only from its own tradition, but from the
practices of virtually all other automakers. Growing competition for the $31
billion that black households spend on cars and trucks has made the expertise of
African-American agencies a necessity rather than a luxury throughout the auto
industry.

Last fall Toyota appointed Burrell Communications in Chicago as it first
African-American ad agency. Two months ago, General Motors announced that it was
consolidating all of its black-oriented adver- tising under the Carol H.
Williams agency in Oakland, California. In February Mazada selected the Wimbley
Group in suburban Chicago as its first black ad agency. Nissan, which previously
worked with Carol H. Williams, is expected to announce a new African- American
agency within days.

There are two African- American owned agencies with auto marketing experience
but that are currently without a car company on their rosters; the Chisholm-
Mingo Group in New York most recently worked on GM and E. Morris Communications
in Chicago handled Oldsmobile.

© 2002 South Dade Monitor, Inc.