Italy’s largest advertiser Fiat has warned that the recently announced restructuring of its diversified group will lead to massive cuts in its $200 million-plus (€202.64m; £127.89m) annual advertising budget.
Worst hit of Fiat’s many division is the automobile unit, beset by a crash in its market share which in September reached all-time low in its home market. Plans are afoot to lay off more than 6,700 workers resulting in nationwide protests. The company's share price has bottomed at an eight-year low and its bonds have been slashed to near-junk status.
According to Milan-based media buyer MediaItalia, Fiat was Italy's largest advertiser in 2001, with a budget of $204 million. In an unsuccessful attempt to drive sales for its new Stilo model, $122 million was spent in the first six months of this year, down 1% over the same period in 2001– and likely to further decimated in the months ahead.
Feeling the chill will be lead agencies BGS D’Arcy and Leo Burnett Worldwide which between them handle the Fiat brand across the globe. Also affected are Armando Testa (handling the Fiat-owned Lancia marque plus some advertising for the Stilo) and WPP’s Red Cell whose key account is Alfa Romeo.
Data sourced from: AdAgeGlobal.com; additional content by WARC staff