American Honda has just announced it will split its U.S. advertising business… (American Honda )
Rubin Postaer & Associates held on to its signature account -- American Honda Motor Co. -- but the agency lost a significant piece of business in one of the advertising industry's most-closely watched reviews.
Honda announced late Monday that it was dividing its advertising duties among three separate agencies. RPA, which was formed in 1986 to handle the Honda account, retained the creative work for the nation's fifth-largest auto seller.
Many of the Santa Monica agency's 500 employees have been nervous since Honda announced in December that it was putting the account up for review. RPA is the second-largest advertising agency in Los Angeles.
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Honda selected the Boston agency Mullen, which does work for Google and JetBlue, as its new agency for the luxury auto line Acura. RPA had handled the Acura advertising since 1999.
Honda also picked a new media buying firm, MediaVest, rather than continue to rely on RPA for that portion of their business.
Honda spends about $830 million a year in advertising.
“We are creating a new and highly collaborative path forward that will yield outstanding [commercials] and enable us to focus more of our marketing investment on communicating with our customers,” said Michael Accavitti, vice president of national marketing operations, said in a statement.
“We are confident that our new team of agencies will create dynamic marketing campaigns that connect and engage consumers with our products and our brands, while achieving an even higher level of efficiency and effectiveness,” Accavitti said.
Honda said each agency will have dedicated work space at American Honda headquarters in Torrance, "where agency personnel can better serve the needs of each brand by collaborating together and with the Honda and Acura teams."
Mullen and MediaVest made commitments to open or expand offices in Southern California to handle Honda's business.
RPA defied the odds but keeping a significant portion of the account. Advertising veterans said the odds are long for an incumbent to win back an account once a client puts an account in review.
“Losing this account would have catastrophic effects for this agency,” Kevin B. O’Neill, a veteran ad executive who now teaches at Syracuse University’s Newhouse School of Communications, said before Honda announced its decision.
American Honda Motor Co. was the fifth-largest seller of vehicles in the U.S. last year, trailing only the “Big Three” Detroit automakers and Toyota Motor Corp. Honda’s U.S. sales accelerated 24% to just over 1.4 million vehicles in 2012 as it rebounded from inventory and production problems caused by the Japanese earthquake and tsunami in 2011.
Honda and its Acura luxury brand account for about 1 out of every 10 cars sold in the U.S., according to research firm Autodata Corp.
Honda hopes to boost sales for its 2013 Civic and it plans to roll out a new Accord hybrid model later this year to better compete with similar vehicles from Toyota and Ford. Acura wants to showcase its RLX, its flagship luxury sedan to compete with Lexus and Mercedes Benz. The company also plans to launch a revamped Acura MDX sport utility vehicle.
“Advertising has always been very competitive and these account reviews are the 'High Noon' of the business, with agencies pulling together all of their firepower for these duels in the middle of the street,” O’Neill said. “It’s enormously satisfying when you win, and heart-breaking when you lose.”