Hyundai mulls direct deal with Google on digital spend

Hyundai and sister brand Kia are considering negotiating their global digital adspend directly with Google.

Hyundai mulls direct deal with Google on digital spend

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 £29.3m in 2015, with Hyundai accounting for the bulk of spend. The pair has spent more than £30m 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 its roster of agencies to help 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, along with Hyundai's other agencies, also be involved in the launch of 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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