Chrysler likely to use multiple ad agencies

According to sources inside the company, Chrysler will end its long-term partnership with Omnicom Group’s BBDO and work with multiple agencies. BBDO, which has been one of Chrysler’s ad agencies since World War II, has been the primary advertising and marketing support provider since the automaker consolidated its ad work in late 2000 under former senior marketing v-p Arthur “Bud” Liebler. Previously, the company had split its work between BBDO and True North Communications.

Chrysler has already begun assigning certain projects to other agencies, a trend that is likely to continue. Under Sergio Marchionne, CEO of both Chrysler Group and Fiat SpA, Fiat has spread its advertising over several agencies, including Publicis Groupe’s Leo Burnett and Dublin, Ireland-based WPP United. WPP is unlikely to be a finalist for the Chrysler work; one of its subsidiary companies is the lead agency for Ford which has already warned it not to seek the Chrysler account.

The relationship between Chrysler and BBDO has be come increasingly strained over the past year. Chrysler, which only accounts for about one percent of Omnicom’s total business, owed BBDO more than $58 million when it declared bankruptcy last spring. BBDO has already laid off about 25 percent of the employees handling the automaker’s account and cut back operations at its Troy, Michigan, office as Chrysler slashed its spending by more than 70 percent from $840 million in 2008 to $230 million this year. When Chrysler consolidated its work nine years ago, the account was worth $1.8 billion annually.

Chrysler’s current contract with BBDO expires in January 2010.