Dollars and sense: Guarascio upped spending but not share

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Philip Guarascio, General Motors Corp.'s VP in charge of advertising and corporate marketing, retires May 1.

It says a lot about his power and prestige at GM that he's a VP at a time when the head of Chevrolet isn't. Times have changed.

During his 14 years at GM, Guarascio changed the way advertising is bought and used. There are many who say that he is the Ignacio Lopez of advertising.

Before Guarascio, advertising agencies were compensated with a healthy 15% commission on the advertising they purchased for GM. Now, compensation includes a much smaller commission and a performance factor.

Although consumer magazines used to have a rate card and stuck with it, Guarascio forced the major publishing houses to negotiate ad prices far below those prices.

He created tie-ins for the corporation, from Disneyland to the Olympics, although it was never clear whether General Motors really should be a brand, as opposed to the divisions that sold vehicles.

But Phil Guarascio made the world know that advertising was important. He was a vice president.

During those 14 years, the company's market share continued to drop year after year. Creative and massive media buying didn't seem to increase sales or even stop the slide during his long tenure.

There is an old saying in the automobile business: When cars don't sell, it's the advertising, and when they do, it's the product. It's sort of a no-win war for marketing.

Guarascio changed the way people thought about the ad dollars spent by GM. Spending climbed steadily during his 14 years. There's no question that he was able to buy more advertising space and time per GM dollar, but there was less discussion of whether GM was using those billions of dollars as effectively as possible. People talked about the amount and growth of GM's advertising, rather than questioning its effectiveness.

And now General Motors has brand managers. They are responsible for their models. Their real power is in advertising and marketing. But ever since General Motors abandoned the traditional vice president and general manager of each division and replaced them with regional sales offices and national brand managers, GM's market-share erosion has continued.

Phil Guarascio had a wonderful flair at a company that didn't allow anyone to have pizzazz. He was responsible for buying billions of dollars of advertising, and he shined a glamorous spotlight on the entire advertising business.

But no one seemed to worry about the quality of the advertising, only the quantity. Phil Guarascio made GM think about the dollars; now it's time for someone to start thinking about the sense of it.

Mr. Crain is publisher and editorial director of Automotive News and chairman of Crain Communications, publisher of Advertising Age.

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