TVB President Chris Rohrs told Advertising Age his group has been talking to GM's Mark LaNeve for "well over a year" about its big move into online advertising. The auto giant's very public pronouncements on its move to digital led the TVB to analyze GM's media strategy and spending in the first half of 2008 vs. the nation's six other major automakers, he said. The TVB sent its analysis today to all 600 of its member stations.
Newspaper spending jumps
Mr. Rohrs said the TVB was "stunned" by data provided by TNS Media Intelligence that showed GM upped its newspaper spending to $120 million in the first six months of the year, $85 million more than the year-ago period. GM's newspaper spending represents 12% of its total measured media budget in the first half -- the highest among the top seven automakers. The bulk of GM's newspaper buyers are local papers, Mr. Rohrs said.
in spot TV
|% of total||First half
|% of total|
|GM||$69 million||7%||$120 million||12%|
|Toyota||$110 million||21%||$12 million||2%|
|Nissan||$113 million||32%||$15 million||4%|
|Honda||$127 million||32%||$9 million||2%|
|Ford||$53 million||11%||$26 million||5%|
|Chrysler||$149 million||40%||$17 million||5%|
|Hyundai/Kia||$29 million||12%||$6 million||2%|
During the same period, GM dropped its spot TV spending by $10 million to $69 million in the first half, or 7% of its total measured-media budget. All the other carmakers spent a larger percentage in spot TV. And GM spent 9% of its total budget in online advertising in the first half, while the other six carmakers averaged 6% of their entire budgets.
"We think GM has gone too far, too fast" switching into media that are reaching in-market new car buyers, Mr. Rohrs said. "GM is so fixated on media metrics, it has lost sight of car-sales metrics." He compared GM's strategy to a game show. "If you don't survive the awareness and consideration rounds, you don't get to play in the final round," meaning vehicle sales won't come if a company doesn't lay the groundwork for brand building.
More buyers for the buck
Mr. LaNeve, VP-vehicle sales, service and marketing at GM in North America, told Ad Age earlier this year the auto giant had moved nearly 25% of its media budget to digital (including search and customer relationship management) over the past three years. One of TV's weaknesses, he noted at the time, is that only about 3% of customers are in market at any given time, so 97% of your message is either wasted or in the long term is brand building. Online ads in auto shopping sites like Edmunds.com reach shoppers, he said.
Mr. LaNeve was unavailable to comment at press time. A GM spokeswoman said, "GM had not seen the report and would therefore not comment."
GM spent $922 million in the first half of 2008 vs. $1.043 billion in the first six months of 2007, according to TNS Media Intelligence. During those two periods GM cut its total TV budget to $487 million from $519 million, while increasing online ad spending to $88 million from $74 million.
In mid-July, GM Chairman Rick Wagoner said GM would make deeper cuts to its ad spending. Mr. LaNeve told Advertising Age last month that GM had already implemented more than half the extra ad spending cuts for the rest of 2008, saying they crossed all areas, including promotions, production, media, agencies, outsourcing contracts, structural costs and people.