GM, historically among the nation's top two advertisers, dropped to fourth last year with estimated measured and unmeasured ad spending of $3 billion, according to Ad Age estimates. Of that, $2 billion was measured media, including $197 million for online ads, according to TNS Media Intelligence.
The marketer's latest move into digital is an all-online effort for its certified-used vehicles. Last week, it unveiled a new website, usedcarambush.com, to entertain and educate people about the risks of buying a noncertified-used vehicle from a private seller. The site uses videos of car buyers shot with hidden cameras. GM will initially promote the site virally, followed by search and paid online media, said a spokesman for Mullen, Wenham, Mass., which created the campaign.
Bob Cosmai, an auto consultant who left Hyundai Motor America in 2006 after three years as president, said in tough times the internet is a more efficient way to reach in-market shoppers and generate showroom traffic. "Everyone is fine-tuning ad budgets now, and by paring back the ad budget, you can cut out millions in a minute," Mr. Cosmai said. GM, like other carmakers this year, is doing little brand-building advertising on TV because building showroom traffic is a bigger priority. "The market really dictates your spending."
Dan Gorrell, president of consultant AutoStratagem, called GM's push into digital "a double-edged sword." While the internet is a very effective medium, it doesn't cover everybody, since 34% of the U.S. industry's new-vehicle buyers do not use the internet when they shop, he said. Some 46% of buyers for GM's top-volume brand, Chevrolet, did not use the internet in the shopping process, he said.
TV 'horrifically inefficient'
Online auto advertising will reach $2.8 billion this year and is projected to hit $4 billion by 2010, said Steve Wilhite, a veteran auto marketer who is president of Jumpstart Automotive Media, a rep firm for online auto publishers and sites. "TV is horrifically inefficient," and the internet can better reach the roughly 11 million Americans shopping for a new or used car in any given month, he said. He recommended that car companies cut their TV spending in half and use it only for major product launches, limited-time sales or big news, such as GM's introduction of its beefed-up warranty in fall 2006. Of course, given his job, that's not a surprise.
Wes Brown, VP of Iceology, said he isn't convinced GM can get the same kind of return on investment it would from traditional advertising. That's because many online car shoppers already have a good idea which models they are considering and don't bother clicking on banner ads for competitive products. "Even with TV viewership down, and TV is expensive, you are still putting your brand in front of people, and you don't get that with digital," he said.