General Motors Corp. is significantly cutting magazine spending this year in favor of TV, a move that is sending shockwaves through the publishing industry.
GM is the medium's largest advertiser, having spent well over $500 million in magazines last year. Its pullback in part reflects GM's concern that it is not using magazines as effectively as possible1and its unwillingness to keep pouring money into the medium until it has found a solution to that problem.
Several people with knowledge of GM's plans said the automaker will use more single pages in magazines and fewer spreads and multipage units. In addition, GM is seeking to raise the level of its magazine creative and will "send back to the drawing board" ads it doesn't deem as strong as its TV work.
SCHEDULES SLOWER, SMALLER
"Everyone is getting hit," said one magazine sales executive, who requested anonymity. "The schedules are slower and smaller than last year."
Philip Guarascio, VP-general man~ager, marketing and advertising for GM's North American Operations, declined comment, as did GM MediaWorks, Warren, Mich., the marketer's dedicated buying agency.
Separately, Chrysler Corp.'s Ply~mouth brand has also deeply cut magazine spending this year. Plymouth is said to have eliminated some titles from its schedule and shifted around buys with other publishers. Still, magazine reps are optimistic the carmaker will up spending in the second half of the year for its Jeep and Chrysler brands.
FOCUS ON CHRYSLER
Martin Levine, general manager of Chrysler, Plymouth and Jeep, said his focus now is on the Chry~sler brand, with three key cars being launched in a short window. "Plymouth uses different books than Chrysler, so it looks like there's less activity."
"Don't read anything into" changes in Plymouth's print schedule, he added, apparently referring to the carmaker's decision to eliminate its Eagle brand after slashing ad spending.
On the GM front, the automaker has yet to sign '98 contracts with many magazines, although the first quarter is nearly over and monthly magazine publishers are already working on June issues.
GM will still be a big spender in print. According to one estimate, its '98 magazine spending, while down from last year, could come in at '96 levels, when it spent $456 million in magazines, according to Competitive Media Report1ing.
"They'll still spend hundreds of millions of dollars in print," said one executive. But another media sales representative said, "It's enough of a shift that it's hurting some books. Print is the stepchild of TV."
MAGS TOPPED $500 MIL
Of the $1.6 billion GM spent in measured media in the first nine months of 1997, magazines ac~count~ed for $519 million, up from $446 million for the same period in '96, according to CMR.
Broad-based titles may be hit hardest by the pullback, since GM wants to be more targeted this year. Minivan ads, for example, are expected to appear in women's titles rather than general-interest magazines.
The carmaker is striving to use media more effectively and eff~icien~t~ly. GM has asked its car marketing divisions and agencies to defend the use of spreads and inserts as compared to page ads to determine wheth~er the multipage units so popular among car marketers are actually more effective.
GM also wants its marketing divisions and ad agencies to do more rigorous testing of print ads to improve creative and increase effectiveness.
"Print has to do more to prove its value," said one executive.
TIED TO CENTRALIZATION
The push for more print testing is tied to GM's centralization of so-called best practices. Under GM's 3-year-old brand management system, the carmaker is trying to find the most efficient ways of doing things, and then export that across all six car marketing divisions.M
Contributing: Ann Marie Kerwin, Scott Donaton
Copyright March 1998, Crain Communications Inc.