Ford Disrupts Ad Industry, WPP Under Review

After working together for 75 years, Ford announced that it’s taking a look at its creative relationship with PR giant WPP by putting the firm under review.

Ford further confirmed the review and stated, “Ford is placing some portions of our advertising business up for bid with other agencies, including WPP, beginning in the coming weeks.”

WPP was responsible for Ford’s $4 billion ad budget, which is now among several budget lines undergoing Ford’s “financial fitness” initiative. This new initiative has Ford executives creatively rethinking its advertising strategies.

Under Review

While the decision to review WPP’s ad portfolio was brewing for some time, Ford underwent changes in leadership that accelerated the formal announcement. First, Jim Hackett joined Ford as CEO in May 2017. As former CEO and board member of Steelchase, the office furniture retailer, Hackett has no ties to the WPP relationship.

In addition, Ford appointed Kumar Galhotra to Chief Global Marketing Officer with the charge to, “shift investments towards product categories that play to Ford’s strengths, and develop more effective brand communications including digital services, emobility and autonomy.”

Further, the recent misconduct allegations of WPP CEO Martin Sorrell, which caused him to step down from his role in April, added fuel to the tense relationship between Ford and WPP. Ford insiders say that this was reason enough for Bill Ford, executive chairman, to give the review the go-ahead.

Ford is experiencing struggles of its own amidst the review. While its pick-up truck and SUV lines continue to generate sizeable profits, its passenger car lines are waning. Executive Vice President and President, Global Markets, Jim Farley has the solution.

A new approach

Farley suggests that, “having a cost problem makes it more important to be curious and find a better way.”

In an interview with the Wall Street Journal, Farley says that Ford’s decision to place WPP under review stems from rapid changes in the marketplace: “The digital platform to engage with customers is big enough and the targeting tools are precise enough now that we can make private offers to customers. So it was pretty clear that we needed a new model. The biggest change isn’t the agency, it’s us.”

Digital platforms are encouraging Ford to market to consumers in an entirely different way. For example, Ford is beginning to tailor its advertising to specific individuals. Ford will continue to use the NFL to target truck buyers, but will show Facebook ads for large SUVs to parents and families.

Per Farley, “People have to find the brand in the right places and the right ambience. Most important is when you’re talking to them, it’s personal and one-on-one.”

Further, Farley suggests that more customers are engaging with online video, which takes a different skill set than the traditional firms, i.e. WPP, who design 30-second TV ads or one-page print ads.

Disrupting an industry

By placing WPP under review, Ford is sending a message to the marketing world. No longer do companies need to rely on the expertise of age-old advertising firms. Advertising in the digital age requires a different set of skills.

Companies can do much of this work in-house by hiring talent in digital marketing, video production and social media management.

Strategies that match advertising with consumer behavior, i.e. going where the customers already are, will be the key to success in the evolving world of digital advertising.