Fiat to review European media

Ian Darby, Campaign 22-Apr-05, 14:44

The car company is set to put the work out to pitch now WPP has taken a stake in Fiat Media Centre.

Fiat is poised to review its estimated £150 million pan-European media account after WPP took a stake in the car manufacturer's Italian media agency.

Starcom holds the account outside Italy but Fiat is now expected to put the business up for pitch after WPP's Red Cell network took a 49 per cent stake in Fiat Media Centre. Red Cell already has a relationship with Fiat because it handles the creative account for Alfa Romeo.

Starcom's relationship with Fiat dates back to 1991, when Leo Burnett and DMB&B, the two agency networks that later launched the Starcom MediaVest global media network, were appointed the Fiat brand's two agencies.

WPP, which is reported to have fought off rival bids from Armando Testa and Carat for the stake in Fiat Media Centre, now has a strong Italian base from which to launch a bid for the European account.

Fiat began talking to its creative agencies about possible cost savings and consolidation across its Fiat, Alfa Romeo and Lancia marques as far back as 2002 and then renewed the process last year. Media for the separate brands is consolidated into Starcom, but the creative work is still divided between Leo Burnett, which handles Fiat outside Italy, Testa, which handles Fiat in Italy, and Red Cell on Alfa Romeo.

However, there are expected to be renewed attempts to consolidate the Fiat and Alfa Romeo agencies. Sources close to Fiat said the agencies working on the Fiat marque have already been pitching against each other for each major advertising project.

Red Cell currently has no other media interest but its involvement in Fiat Media Centre cements its relationship with the car manufacturer as Fiat considers its creative agency arrangements.

Fiat Auto made an operating loss of e 840 million in 2004 but is hoping to move back to profitability after the Fiat Group chief, Sergio Marchionne, took direct control of the motor division.

It was dealt a blow when General Motors, which owns a minority stake, backed out of a possible deal to buy the motor division outright. GM agreed to pay £1 billion for cancelling the agreement.

In 2004, UK car sales for the main Fiat marque were down 2.7 per cent to 72,825 and down 21.7 per cent for Alfa Romeo to 8,072.