GM BOOSTS NEWSPAPER ADS TO DRIVE TRAFFIC, WIN SHARE: SPENDING TREND EXPECTED TO CONTINUE THROUGH 1999

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In an effort to generate more floor traffic and improve market share, General Motors Corp. is pumping up newspaper advertising, according to several dealers and two newspaper ad salespeople.

GM ad buys started to rise slightly early this year, said two ad salesmen from separate rep firms that handle several dozen local newspapers; and they have risen even more since April. Both salesmen, who asked for anonymity, said the trend will continue through 1999.

One said his rep firm's ad revenue for Buick rose 733% through May 1999, compared with last year.

The other newspaper space salesman said his company sold a record of more than 100,000 inches during the first two weeks of June vs. a prior peak of 50,000 inches per month-and GM was the driving force.

Several GM dealers confirmed they are seeing more GM newspaper advertising in their markets.

AIMING FOR MORE SHARE

GM is struggling to improve its U.S. market share. Its 1999 share was 29.6% through May, down from 31.4% for the same five months a year ago.

Newspaper ads can be used to react quicker to market conditions, noted a GM agency executive who asked not to be named.

A spokesman for Chevrolet, confirmed the regions are buying more newspaper ads.

"Our research has shown people consult newspapers very diligently during the last week or two before purchase," he said.

Newspapers provide more flexibility to react to competitors because of shorter lead times vs. TV, he added.

"When you've gotten as far behind as GM has, you really try to plug sales and go where the buyers are looking, and that's newspapers," said veteran auto ad executive John Slaven, now president of Slaven Marketing Services, Englewood Cliffs, N.J.

REGIONAL DECISIONS

Mike Sands, national ad director at Oldsmobile, said the regions can decide on their own what kind of media to buy.

"In such a hot market and with great incentives on our products, it's very smart to be in newspapers; and I would expect to see an increase in newspaper advertising," he said.

On April 1, GM terminated its regional dealer associations, which-through their 66 ad agencies-spent about $600 million annually in measured media. GM's five new regions now handle regional advertising via the national agencies for Buick, Cadillac, Chevrolet, GMC, Oldsmobile and Pontiac.

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