Nissan’s new multicultural agency
If you haven’t heard yet, Nissan has selected a team of Omnicom agencies to handle their multicultural business, valued at over $35 million per year. If you have an AdAge account, you can read the story here.
I am really fascinated by the process and ultimately the decision Nissan made. Announced early in the year by Nissan as a search for a multicultural agency, they were eventually persuaded by some agency trade organizations and market realities (i.e. there is really only one ad agency with Hispanic, African American, and Asian capabilities under one roof, and they already have an auto account), to open the review to teams of agencies.
Then, Nissan made a requirement that the selected agency/agencies be minority-owned and certified, to help with their Supplier Diversity efforts.
Just a few days ago, they announced that a team of Dieste Harmel & Partners (Hispanic agency majority owned by Omnicom), Footsteps (African-American agency 49% owned by Ominicon) and Admerasia (independent Asian ad agency) were awarded the business under a lead, yet-to-be named minority-certified and owned agency (to be minority owned by Omnicom). Whew… still with me?
A couple of thoughts and questions that immediately came to me include:
- Kudos to the head of supplier diversity at Nissan for making minority-ownership a priority on this pitch
- Why isn’t there a mandate for some of the behemoth general market work to fall into the hands of minority-owned agencies?
- It’s amazing that there are still so few Asian ad agencies out there (illustrated by the fact that those that participated in the review were allowed to partner with multiple teams early on)
- Did / will Nissan achieve efficiencies by bundling the multicultural work into a team, versus selecting individual Hispanic, African American, and Asian agencies?
- How will this new lead agency, that is 51% minority-owned look? Who will own the 51%? Since Dieste is majority owned by Omnicom, will one of their principals get an equity stake in the new agency? How about the principals at the Admerasia and Footsteps? Will they get equal equity stakes (51% divided by 3) or will it be based on the rough budget percentages that the Nissan business represents to each ethnic segment?
- Will the need for a 4th “lead” multicultural agency over the 3 ethnic agencies create efficiencies or just another layer of cost?
- Since minority certification was a pre-requisite for selection, how was a yet-to-be named and formed minority-owned lead agency certified in time (it usually takes 60-90 days to get certified)? There is already some controversy around this.
No matter how you look at it, this innovative arrangement will generate a lot of questions and likely scrutiny. One thing is clear though, Omnicom will probably win out in the end.
I’d love to hear any thoughts on this