General Motors' new media-buying company is expected to bring an estimated 200 new jobs to downtown Detroit. Carat, which is owned by the London-headquartered Aegis Group, is opening an office on the 23rd floor of One Detroit Center.
When the automaker was looking for a firm to handle its global media-buying, it wanted an agency that would be located near its headquarters and be "part of the fabric of the city," in GM marketing chief Joel Ewanick's words.
"We think it's even more important to show this commitment right now," Ewanick said. "We know what it's like to have friends come and help us when we're going through hard times, and we want to be that kind of good citizen right now. We understand how much work this is, fixing the city. We're not going to wilt away from that."
This comes as Detroit's financial crisis comes to a head, amid a faceoff between Mayor Dave Bing and Gov. Rick Snyder over the best path to restore solvency.
But Martin Cass, president of Carat Global Management, who oversees the Detroit office, is hopeful.
"There's definitely a sense of buzz, a sense of revival," he said. "I hope the political elements get sorted out, and we can all get on with life."
Carat to handle all of GM's media buying needs
Once the media-buying focus for car companies was on local newspaper, radio and TV advertising. Today, it's global -- a consumer in Milan, Italy, can watch a Californian's video car review on YouTube.
As media platforms multiply, General Motors wants to take better advantage and has decided to streamline its approach and use just one marketing company, called Carat, as it pushes more into the social-media realm of advertising.
Detroit will benefit from the move as Carat brings 200 new employees to the city and rents office space downtown in One Detroit Center on Woodward.
The car company had been using approximately 50 firms around the world to deal with this vital part of its marketing-PR campaign, but now, one agency will handle it all.
Carat says on its website that it's the world's leading independent media planning and buying specialist.
A division of Aegis Group in Britain, Carat has worked with GM since 2007, handling Chevrolet in Europe, Opel and Vauxhall, according to Martin Cass, president of Carat Global Management.
"We should've done this global review and global integration 10 years ago," said GM marketing chief Joel Ewanick. "Most companies our size have already gone through this. We're late to the party. ... It's not only a money decision, but it allows us as a marketing organization to be more efficient at how we look at our buying, our best practices."
He wouldn't say how much money this consolidation will save, but Peter De Lorenzo, editor-in-chief of Autoextremist.com, estimates it'll be 15% to 18% of the company's total media-buying costs. "Realistically, when it's running on all cylinders, they could be saving 20%," he added.
Carat opened its Detroit office about two weeks ago. Cass explained it'll be "100% loaded" with the projected 200-plus new employees by mid-April.
GM is the firm's largest client. Cass has been traveling the globe -- Hong Kong, Argentina, Germany -- to get the organizational structures of GM and Carat aligned.
"The planning element and strategy element of what we do will have a very significant impact on how GM goes to market," he said. "The way you see commercials for Chevrolet and Cadillac will start to look different -- not just what it says, but how the brand behaves in the global ecosystem we all live in today.
"We're touching 100 markets around the world, and we'll be handling north of $2.5 billion of advertising and marketing investment on their behalf," he said.
De Lorenzo called the Carat move "a good thing" overall for GM.
"I refer to the media-buying opportunities as a kaleidoscope," De Lorenzo said. "There are so many possible media platforms to take advantage of, thanks to the immediacy of social media that it has changed the game dramatically.
"Having one agency instead of 50, even though the transition will probably be chaotic, it will prove to be better in the long haul."
De Lorenzo expects it to take three years to "see the full potential" of this move.
For GM, the move wasn't just to one agency, but also to Detroit itself.
"GM makes its home in the RenCen downtown. We all drive in to downtown. We all live and breathe and work in the RenCen. We felt it was important our agencies have that same commitment to the city," Ewanick said.
Starcom MediaVest handled GM's media-buying in the U.S. since 2006, according to Ewanick, and it also opened an office in Detroit.
Steven Feuling -- who previously handled marketing for Troy-based Kmart -- is Carat Global Management's new chief operating officer. He will oversee its Detroit-based operations.
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