Updated: Toyota tilts $100m media and creative contracts to Publicis as carmaker prepares for electric vehicle turf war
After a sweeping and protracted 14 month review of Toyota's digital, media and creative strategy and supply chain, the automaker has ended a decades-long relationship with media agency TMS in favour of Publicis. Fellow Japanese-domiciled group Dentsu, however, remains in Toyota's portfolio, as Australia's top car brand prepares for a future without petrol and diesel engines and supremecy in electric and hybrid vehicles.
What you need to know:
- Toyota consolidates with Publicis after 14 month pitch, longstanding partner The Media Store (TMS) loses media.
- Publicis likely to have upwards of 90% of Toyota's business.
- Spark Foundry will handle media planning and buying; Saatchi & Saatchi keeps main creative account.
- BWM Dentsu retains retail; Hero has also been appointed for select product portfolios.
- Sales & Marking chief flags major challenges ahead for brand and sector.
International auto giant Toyota has handed its creative and media accounts to Publicis, following a sweeping 14-month review and pitch process of its digital, media and creative strategy and partners.
The business, worth over $100m in billings, is one of the largest non-government accounts in the country.
Publicis will handle the business under its Power of One model, with Saatchi & Saatchi continuing to lead the creative account.
Spark Foundry has been appointed the media strategic planning and buying services agency for Toyota and Lexus.
Mi3 understands that the Lexus dealer network account will continue to be managed by incumbent agency UM.
Media was previously held by indie agency The Media Store, which was purpose-built to service the account over 20 years ago. Discussions regarding the transition period are ongoing.
BWM Dentsu will retain retail and Hero has also been appointed for select product portfolios. Publicis declined to comment.
“The automotive industry is undergoing a once-in-a-century transformation that will require innovative customer-focused solutions through next-generation vehicles, services and communications," said Toyota Australia’s Vice President of Sales and Marketing, Sean Hanley.
“Our new specialist agency partners are best positioned to support us with innovative marketing as we enter this new exciting era."
Toyota and the broader automotive industry face seismic disruption over the coming decade as governments around the world phase out sales of new petrol and diesel vehicles.
This effectively means carmakers must scrap 100 years worth of IP and start again while investing hundreds of billions of dollars, trillions, when power infrastructure is taken into account, to pivot to battery and fuel cell powered vehicles.
Toyota's president, Akio Toyoda, has described the shift as akin to moving from horse and carts to combustion vehicles, but has warned that consumers may pay a high cost from phasing out engines too soon.
Carmakers have to work out a way of managing that transition while turning a profit. Meanwhile, Tesla's market cap is now close to triple Toyota's.
The headline change in Toyota's review was cutting its 20 year-plus media agency relationship with TMS, a company the auto giant bankrolled in the 1990s as a new agency model after the ACCC outlawed a media accreditation scheme co-designed by Rupert Murdoch which the competition regulator hitherto had sanctioned.
The old Media Accreditation System effectively gave media owners control of who could be accredited to buy media and receive fixed 10% commissions for trading. The media sector also controlled the advertising industry codes and the then complaints body, the Advertising Standard Board. That ended in 1996 after a fierce lobbying effort from the Australian Association of National Advertisers (AANA), which accused media companies of illegal racketeering and anti-competitive market behaviour and power. The parallels between media then and the tech duopoly today are striking although advertisers seem far less vocal and concerned about the duopoly's market power in 2021 than they were of media in 1996.
The AANA's advertiser revolt 25 years ago against media's control across the advertising sector was led by then AANA president and Toyota marketing boss Bob Miller and Colgate-Palmolive's then legal counsel, Robert Koltai. The advertiser win against media and agency market power saw Toyota emerge as one of the few blue chip advertisers to try different media and agency models after the ACCC ruling. Commonwealth Bank and Ikon a few years later was another. Toyota funded Warren Hill into creating a dedicated media agency for the auto giant called The Media Store, which caused a stir at the time.
But that 20-year experiment is now over after Publicis won Toyota's media contract, just as the Ikon brand also disappeared this year when WPP AUNZ merged it to become AKQA Media.
The marketing and publishing worlds continue to watch with anticipation and unease as the rules of digital marketing are overturned via the recent Apple iOS changes and the impending cookie crumble. As the demand for greater privacy and transparency regarding access and use of personal data grows, after years of normalising tracking consumer behaviour online via apps and the web, the tide is turning. Consumers are now more informed and able to make the choice as to whether they accept these terms, whether the value exchange for use of their data is worth it, and the resounding answer appears to be no. So where does that leave the world of audience targeting?
The data doesn’t lie: women are feeling confident and empowered when it comes to purchasing cars, but according to the latest research, the automotive marketing industry still has a long way to go to catch up.
Are Media has dug into the data from its inaugural HERpulse Auto survey to reveal that although the majority of women are the key decision-maker when it comes to buying a car for the family, many still feel patronised and unrepresented throughout the marketing and sales cycle.