Hyundai mulls direct deal with Google on digital spend

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The search giant simply provides more transparency than "snobbish" agencies, says European CMO.

The move would cut out Hyundai and Kia’s media agencies in charge of digital spend. The brands’ media requirements are led by in-house arm Innocean, which works with agencies including Havas Media in Europe and Canvas in the US—a joint venture between Innocean and Horizon.

Hyundai’s European chief marketing officer, Jochen Sengpiehl, told Campaign the shift could happen next year. He said: "There is no reason why we should not think about making a global consolidation of our investment into Google."

The rationale is that digital media spend will be more efficient without intermediation. Sengpiehl would not confirm how much Hyundai spends with Google but said it was a top five automotive spender with YouTube. 

According to Nielsen, Hyundai and Kia’s adspend jointly came to $36.9 million in 2015, with Hyundai accounting for the bulk of spend. The pair has spent more than $37.8 million in 2016 so far.

Sengpiehl said Google gave the company greater transparency than its media agencies.

He added: "The agencies are hired to be a service provider, and they have to play the role of a solutions service provider. But they are still so snobbish."

In a blistering critique of media and advertising agencies, he added: "Classic, above-the-line driven advertising is so overwhelming. Many creatives are living in the eighties and nineties."

Brands becoming publishers

Sengpiehl’s comments cap a fraught year between media agencies and marketers. Alongside issues such as media rebates and complexity, marketers are looking to boost the efficiency of their spend.

In Hyundai’s case, that means shifting adspend from paid to earned and owned media. The car maker has launched its own newsroom and restructured its European marketing team to include digital and PR.

Earlier this year, Hyundai appointed Vice Media to launch its Ioniq hybrid and electric car in Europe. The publisher created a brand film designed to appeal to a younger, environmentally-conscious generation, in a shift away from conventional product-oriented ads.

 Vice Media will also launch the new i30 model in the UK early next year. 

"It’s data-driven storytelling," Sengpiehl said. "We should become a publisher house and a content platform—we could generate our own content, build event platforms and create brand content platforms.

"Marketing, PR, corporate communications and digital are all melting together."

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