GM TO ENLIST SHOPS FOR BIGGER ROLE IN BRAND BUILDING

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General Motors Corp.'s agencies will play a bigger role in building the company's brands, and in turn some of their compensation will likely be tied to how well they accomplish the assignment.

That's the word from Philip Guarascio, VP and general manager-marketing and advertising for GM's North American Operations.

"Creating more value for the brand is what it's all about," said Mr. Guarascio, in an interview with Advertising Age. "We need to build more accountability into the relationships [with agencies], and I believe we need to address the issue of compensation from the view of involving more of a risk/reward piece to it."

He said there is no timetable for implementing compensation changes. GM agencies now are generally paid on a media commission basis, with its major agencies earning in the 9% range.

Hal Riney & Partners, San Francisco, has its pay connected to the success of GM's Saturn Corp. But risk/reward equations have always been part of the culture at Saturn, where the pay of all employees is related to meeting specified goals.

Negotiating with existing agencies will be a different matter, although the idea has been incorporated into at least one assignment with those shops.

Some compensation for GM Card agency McCann-Erickson Worldwide, New York, is tied to "quantitative as well as qualitative measures," Mr. Guarascio said.

In 1993, GM invested $1.5 billion on ad spending, according to Advertising Age estimates.

Overall, GM is showing renewed strength in the market. The company had its strongest August in four years, selling 412,783 units, a 16.8% increase from the same month a year ago.

This fall, GM is bringing out a slew of new or redesigned models, ranging from high-image vehicles like the Buick Riviera and Olds-mobile Aurora to high-volume sellers such as Chevrolet Cavalier and Pontiac Sunfire.

Devising a way to measure brand equity that can be applied across all the automaker's brands has become an important goal for Mr. Guarascio's staff. An agency compensation system will depend on how that issue is sorted out, along with some evaluation of just how much an agency's work ultimately contributes to the goal.

"Primarily, the brand equity [measurement] system is going to be diagnostic," Mr. Guarascio said.

More will be involved than just tracking ad awareness.

"We need to find a way to understand the totality of the marketing input on the brand," starting all the way back at the product development phase, he said.

GM's vehicle division agencies are McCann-Erickson Worldwide, Troy, Mich., for Buick; D'Arcy Masius Benton & Bowles, Bloomfield Hills, Mich., for Cadillac and Pontiac; Lintas Campbell-Ewald, Warren, Mich., for Chevrolet; Leo Burnett USA, Chicago, for Olds-mobile; and McCann/SAS, Troy, for GMC Truck.

The marketer's 1995 model year ad campaigns will reflect the emphasis on brands.

"It's definitely more differentiated, division to division," he said. "You're going to see advertising that relies more on ideas and less on production techniques."

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