GM announces new regional ad system

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General Motors Corp., Detroit, today confirmed its national vehicle ad agencies will take over regional advertising under a new reorganization next year. About 60 smaller ad agencies that handle GM's regional dealer ad groups will lose a total of $500 million in billings. Five new regional general managers will determine how to spend ad dollars to boost sales and market share in their areas. The auto giant, on April 1, will consolidate local media buying at LCI, a McCann-Erickson Worldwide subsidiary. ``LCI can purchase media at 20-to-25 percent great cost efficiency than traditional buying methods,'' said Phil Guarascio, VP-general manage of advertising and marketing at GM.

GM will pay every dealer $4 for every car sold from Jan. 1, 1990 through Dec. 31, 1998. GM said today that's part of a settlement of a class action suit filed by dealers over mandatory regional ad fees. Dealers had wanted a federal court judge to order GM to refund to them the mandatory 1% of the manufacturer's suggested retail price of every vehicle they sold.

Copyright December 1998, Crain Communications Inc.

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