By Alexandra Bruell 

Ford Motor Co. has decided to put parts of its immense advertising account up for review in the coming weeks, dealing a blow to its incumbent agency, WPP PLC.

WPP's dedicated agency for Ford, called GTB, announced the decision on Friday in a memo to employees. Ford's decision means that agencies beyond WPP will be able to pitch for the portions of the auto maker's marketing business that are up for review.

"WPP will have an opportunity to compete with other firms to retain these portions of the business, and will remain Ford's agency of record in some other key areas," GTB said in its memo.

Ford confirmed that it will be seeking bids for some of its business.

The news is a setback for WPP, which counts Ford as a top client, and comes on the heels of the abrupt exit of WPP CEO Martin Sorrell less than a week ago. Ford began re-evaluating its marketing model months ago, including its relationship with WPP.

WPP, which has been working with Ford for decades, had created a dedicated agency group for the automotive giant, pulling in ad and marketing resources from its various agency groups. The Ford account generates more than $500 million in annual revenue for the holding company, according to people familiar with the matter.

"We are committed to driving greater marketing efficiency, effectiveness and customer insight, leveraging the latest tools and technology," a Ford spokesman said. "We are going to place some portions of our advertising business up for bid with other agencies, including WPP, beginning in the coming weeks. No decisions have been made."

"We value the talented and creative women and men at WPP," the spokesman added. "They are trusted partners and curators of the Ford brand."

"GTB/WPP has been informed that its creative business with Ford is up for review," a GTB spokesman said. "WPP/GTB is the most capable, passionate, informed and dedicated partner to build Ford's vision of the future. We will be enthusiastically responding to Ford's request for review in the days ahead."

Ford's account with WPP in China, as well as its U.S. dealer business and some other functions, aren't being put up for review and will be retained by WPP, according to the memo.

Ford spent $1.22 billion on U.S. media in 2017, not including spending with various social platforms, according to a Kantar Media estimate.

Jim Farley, president of global markets at Ford, said at an investor conference in January that the company was targeting $200 million a year in fixed marketing savings.

"We're moving to a digitally focused model, and we're going to target our advertising on a more individual basis using advanced analytics and the new digital platforms," he said at the time. "This will enable us to target the right customer with the right message, and that's going to drive efficiency."

WPP also is defending a few accounts that recently went up for review, while working to make up for account losses in the past couple of years, including AT&T, Volkswagen and American Express.

The advertising company has reported a series of disappointing financial results, sending its shares tumbling more than 30% in the past year. In March, the company told investors that it is setting budgets for 2018 on the assumption of no growth in revenue or net sales.

--Suzanne Vranica and Christina Rogers contributed to this article.

Write to Alexandra Bruell at alexandra.bruell@wsj.com

 

(END) Dow Jones Newswires

April 20, 2018 17:04 ET (21:04 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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