GM has started 19 "shared creative" pilot programs in 10 markets. Like the old dealer marketing groups, each pilot lets dealers for a specific GM brand, like Chevrolet, pool their money with GM funds and buy TV commercial spots.
The pilots run through Dec. 31. Candace Robbins, GM director of dealer marketing, called them "test and learn" pilots. "These pilots will help us decide what happens next," she said. Ms. Robbins would only identify two of the pilot markets: Phoenix and Houston.
In early 1999, GM's five regional sales operations took control of about $500 million in local ad spending when the company eliminated 954 dealer-run marketing groups. Since then, dealers have complained that GM's local TV spots have been insufficient in many cities and poorly executed. Dealers say that in many cases, they don't know about the commercials until they run.
Ms. Robbins admits there has been a lack of communication between GM and dealers. She hopes the pilots give both sides a larger, coordinated marketing voice.
REACTING WITH A `CHUCKLE'
Although dealers are encouraged by the pilots, Ed Levy, co-owner of Golling Pontiac-GMC in Lake Orion, Mich., and a member of GM's national dealer council, said his first reaction to the pilots "was to chuckle a little bit."
"Isn't [this] what we just stopped doing two years ago?" he asked, referring to the dealer marketing groups.
Under the old system, GM typically took 1% of the invoice of each vehicle sold in a local market to fund local advertising by the dealer marketing groups and individual dealers. The groups' responsibilities included creating and placing newspaper ads and TV and radio spots.
GM and some dealers say the old system worked in some areas, but in other markets it was too disconnected with GM's national advertising. By axing the old system and consolidating the marketing groups' functions, GM believed it could also bring down costs using GM's buying power and could send more consistent brand messages.
Under the old system, "we didn't quite get the value of our dollar," said George DeMontrond, a Houston-based GM dealer and president of DeMontrond Automotive Group. DeMontrond's dealerships are participating in Oldsmobile and Buick pilots.
When it eliminated the marketing groups, GM created a co-op program where dealers can earmark up to 1% of a vehicle's invoice for marketing and GM matches 25% of that. However, that money can only be used for an individual dealership's marketing and advertising, and is rarely enough to buy TV spots.
Under the new pilots, dealers can volunteer up to another 1% of a vehicle's invoice to the local marketing fund. Here again, GM is matching 25% of dealer contributions.
EXPANSION TO PRINT, RADIO?
But unlike the co-op, the pilots pool the funds, which can be used by the groups to buy TV spots. Future programs could be expanded to include newspaper ads and radio spots, Ms. Robbins said.
GM requires that all spot TV buys be done by McCann-Erickson Worldwide's Local Communications, Warren, Mich., which already handles local buying for the automaker.
Although dealers have input into the commercials and final say on when and where the commercials are placed, GM and its national ad agencies still produce the commercials and negotiate airtime, she said.
Ms. Robbins said the pilots restore the best aspect of the old dealer marketing groups: monthly marketing meetings between local dealers and GM's field staff.
Mr. Miller is a reporter with Automotive News. Contributing: Jean Halliday.