GM EYES AD PRACTICES OF DEALERS TO CUT COSTS: AD PRODUCTION, MEDIA WOULD BE CONSOLIDATED ON REGIONAL BASIS

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In a further drive to cut costs, General Motors Corp. wants to consolidate ad production and media buying for its dealer associations by region.

The plan comes in the wake of a sweeping field-focused restructuring the auto giant announced last week; that restructuring had been expected (AA, May 11 and May 18).

General Motors' North American Operations arm wants the regional consolidation to happen, but needs to gain support from dealer groups. GM's newly named regional division marketing managers will meet with dealers in their areas, and then make recommendations to Ronald Zarrella, group VP-sales, service and marketing, NAO.

Under GM's new organization, there will be 30 regional division marketing managers -- one per nameplate for each of five regions.

AGENCIES NERVOUS

GM's consolidation strategy is causing nervousness among the several dozen agencies now handling regional dealer accounts. Under one scenario, a single agency could wind up handling media buying for dealer groups for all six nameplates in a specific region. Some agencies fear the consolidation could extend to the national level, with one agency handling media for all nameplates in all regions.

Several ad agency executives, who asked not to be named, said they were told last week that GM is assembling teams to study the regional ad system and changes will be made at the beginning of next year.

Regional dealer groups for Buick, Cadillac, Chevrolet, GMC, Oldsmobile and Pontiac spent $454.6 million last year in measured media, according to Competitive Media Reporting. GM's Saturn division isn't part of the reorganization.

All divisions except Cadillac have significantly trimmed their regional agency rosters in recent years to conform to GM's brand management system.

"For GM, this [planned consolidation] would be a quantum leap forward because we'd be able to crystallize and focus our energy so we can have the exposure and impressions we need, and the message will be consistent," said Frank Ursomarso, a Delaware Pontiac-GMC dealer who is a member of GM's Dealer Advisory Forum.

REGIONAL ROLE FOR GUARASCIO

Phil Guarascio, VP-general manager of marketing and advertising at GM's North American Operations, will manage and coordinate brand advertising in the regions along with his current national responsibilities. The marketing divisions now oversee regional dealer advertising.

Mr. Guarascio could not be reached for comment.

The move to cut ad production and media buying costs through consolidation is in addition to but follows GM's national strategy, which will save up to $300 million annually and eliminate at least 1,000 field jobs.

As part of GM's massive reorganization, marketing duties once handled by each division will move to a single multibrand organization under John Middlebrook, now general manager of Chevrolet. Reporting to him will be six division marketing general managers and brand managers.

Sales and service will form another group under Roy Roberts, now Pontiac-GMC general manager.

Mr. Zarrella said the national restructuring will also "facilitate the implementation of our regional marketing strategies, which have sometimes been out of balance. But he said the changes "have nothing to do with the organization moving to regional advertising."

Separately, GM Aug. 8 broke a national, multibrand TV campaign to let consumers know its strikes are over and GM's plants are running again; Buick agency McCann-Erickson Worldwide, Troy, Mich., handled the campaign.annually and eliminate at least 1,000 field jobs.

As part of GM's massive reorganization, marketing duties once handled by each division will move to a single multibrand organization under John Middlebrook, now general manager of Chevrolet. Reporting to him will be six division marketing general managers and brand managers.

Sales and service will form another group under Roy Roberts, now Pontiac-GMC general manager.

REFLECTS REGIONAL STRATEGIES

Mr. Zarrella said the national restructuring will also "facilitate the implementation of our regional marketing strategies, which have sometimes been out of balance." But he said the changes "have nothing to do with the organization moving to regional advertising."

Separately, GM Aug. 8 broke a national, multibrand TV campaign to let consumers know its strikes are over and GM's plants are running again; Buick agency McCann-Erickson Worldwide, Troy, Mich., handled the campaign.

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