THE AUTOEXTREMIST

September 28, 2011

Sergio’s marketing genius rides to the rescue of Fiat, but the brand may already be toast.

By Peter M. De Lorenzo

(Posted 9/26, 1:30 p.m.) Detroit. I planned on writing about something else this week, I really did. Any number of topics would have been worthy to talk about, such as, “Will success with the Chevy Cruze spoil GM?” or, “Will Sergio win by playing hardball with the UAW?” or, “The 3-0 Detroit Lions, what?” But in the end, this week’s subject matter just screamed at me, because Fiat-Chrysler’s resident marketing guru Olivier “I’m a genius just ask me” Francois came out swinging, suggesting that the problems with the Fiat launch were illusory and that there was no real issue with the marketing or advertising, just an “awareness” problem.

Speaking with AdAge reporter Rich Thomaselli in an exclusive last week, Olivier actually said the following: “I don’t think we have a car problem; people love the car. I think we have an awareness problem.”

Uh-oh.

Francois was speaking, of course, about the adorable little Fiat 500, which first-on-the-block consumers have (sort of) flocked to and was the subject of Fiat-Chrysler chief Sergio Marchionne’s strong-armed tactics with Chrysler dealers. It was Sergio who demanded that if Chrysler dealers wanted to be a part of “the next success story in the U.S. market,” that they should be willing to put up at least a $1 million or more to create a special showroom for the plethora of new Fiat and Alfa Romeo models that were just around the corner and that would propel the dealers to wealth and prosperity.

Needless to say, things haven’t worked out anywhere near what “The Great Sergio” promised and dealers are, to put it mildly, royally irked.

As I said last week, “Is it (the 500) a cute car? Absolutely. But in this market cute doesn’t count for much and for very long either. The 500 isn’t the kind of car Fiat dealers expected to wring profit out of. It was to be an introduction to the brand for U.S. consumers in preparation for the good stuff that was right around the corner from Fiat and more importantly Alfa Romeo. It’s no wonder then that there are legions of pissed-off Fiat dealers out there sitting in their $1 million+ showrooms wondering what the hell they’re going to do to sustain themselves with that “nice” little car because there are no new vehicles on the horizon to add to their showroom mix.”

The ugly reality for Fiat dealers is that there won’t be any new product to speak of (at least with any appreciable volume) until 2014. Make that late 2014.

And now, Olivier Francois enters the fray. The self-proclaimed brand marketing “guru” thrives on creating controversy with splashy, big-buck advertising plays, only up until recently he has stayed out of the Fiat launch, deferring to Laura Soave and her team. (Which was convenient, especially since they didn’t have the kind of budget that would interest Francois to begin with.)

But all of that is about to change as Sergio, feeling intense heat from the dealers over the looming Fiat fiasco, has brought Francois in to “fix” the debacle that currently defines Fiat marketing. And “The Genius” will be well and truly up against it right away, since he’s already knee-deep in the controversial “JLo” spot for the 500.

You know the spot, the one that has JLo looking horribly out of place driving a Fiat 500 – as if – while zombie-like dancers and neighborhood swells try to get at her. It’s so ill conceived and ill advised that it’s almost incomprehensible.

Well, Francois is refusing to back-pedal on the now infamous spot, telling Thomaselli that it was cut from a trailer for the new video for JLo’s single “Papi” and that it should not be viewed as a commercial. Really? It runs incessantly on Monday Night Football in one of the most egregious bits of boneheaded media placements in recent memory yet it’s not a commercial? How does that work, exactly? Maybe when you’re an ad guru you get to tell people that what they’re seeing really isn’t what they’re seeing, is that it? Please.

(At least he took credit for the train wreck and it’s apparent now that the former Fiat ad agency Impatto didn’t have anything to do with it, which salvages at least a shred of the small Michigan-based agency’s tainted reputation.)

It’s clear to me that Sergio’s plan for assuaging Fiat dealers by bringing in his personal ad guru is a recipe for disaster. Francois is a self-promoter who misses more than he hits and it’s clear that he doesn’t have a clue as to what to do with the Fiat brand here in the U.S. What evidence do I have of that? When he spews vague generalities to AdAge about how JLo, “…shares some characteristics of the car. She’s a fighter, a mover, a performer.” And, “I used to say (celebrity) endorsements are lazy when you have no idea. But that’s not the point – from time to time you have a magic association. I like to take a celebrity because the celebrity’s story fits with the story.”

Please tell me in what way, shape or fashion does JLo have anything to do with Fiat or the Fiat “story” again? Better yet, go back and read Francois’s explanation trying to link JLo with Fiat because he’s clearly making it up as he goes along. No, a more accurate explanation is that Francois loves hangin’ with celebrities, and his latest celebrity crush of the moment is JLo.

I’m sure all of the Fiat dealers out there are thrilled to hear about this “magic association” as well.

Why did I deem this subject to be worthy of a Round II this week? Because this business is still all about having an excellent or hopefully outstanding product, but beyond that it’s about knowing how to communicate the goodness of that product to consumers who are awash in great products and pitches for great products every day.

When a car company gets it right, it means having the financial wherewithal to live to fight another day and grow on its success. When a car company gets it wrong, it inevitably means an unmitigated disaster with far-reaching implications.

It’s clear to me that Marchionne took his eye off of the ball when it came to Fiat and it has absolutely killed the launch of the brand. Leaving the initial launch marketing for the Fiat 500 grossly underfunded and undermanned without the kind of experienced, savvy people who were needed was a crucial mistake.

And Sergio’s extreme management style didn’t do the launch any favors either. He had too many other things to micromanage, meaning that he simply let Fiat slip through the cracks for all intents and purposes, which I’m sure makes Fiat dealers here in the U.S. – who shelled out millions to align with Sergio’s “vision” – deeply regretting that decision at this very moment.

And Sergio’s instant solution is to have Olivier Francois ride to the rescue? That foppish star-sniffer who revels in star-laden, high-concept executions but who doesn’t know when it’s time to shut-up, roll up his sleeves, and get down to the nitty-gritty business of real marketing?

The automobile market here is still bursting with opportunity despite the daily dose of doom and gloom we receive. It’s also fraught with peril if you screw things up.

Right now, Sergio & Co. has screwed-up the launch of the Fiat 500 so badly that they have to start over.

But here’s the thing: This business allows for a very narrow window of opportunity, let’s call it for what it is - a sliver - to launch a new model or heaven forbid, a brand. The common rule of thumb used to be around 24 months to make a go of it, but that number has been whittled-down to 12-15 months. That’s it. If you can’t create momentum for a new product or brand in this time period it probably is not gonna happen. Ever.

And guess what? Sergio & Co. has been flailing away on the Fiat brand for going on 10 months now, and to say that time is running out for them doesn’t even begin to cover it.

Is that the stench of burnt Italian toast wafting over from Auburn Hills?

It could very well be.

And that’s the High-Octane Truth for this week.

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