GM signals new marketing era

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GM is readying itself for the revolution.

The automaker's decision to shift its massive $3.5 billion media account to Starcom Mediavest wasn't just about cutting costs-it was about altering its marketing approach in a rapidly fragmenting and increasingly consumer-controlled media environment.

Expect to see more broadband plays from the country's largest advertiser, as well as more, bigger budget moves in branded entertainment, video on demand and even addressable TV trials. It also flags a continued step away from traditional network TV advertising.

In adding buying-formerly handled by Interpublic Group of Cos.' GM Mediaworks-to the planning duties already handled by Publicis' GM Planworks, the carmaker is hoping it will be able to move faster in a world where the dominance of the 30-second spot is fast fading. It is also counting on Starcom's savvy in these areas to help it better quantify campaigns in these emerging spaces.

Of course the need to save money was also on GM executives' minds given the automaker's financial woes-it reported a stunning $850 million first-quarter loss (AA, March, 21)-but executives close to the review said that while Starcom might have offered savings in terms of the consolidation of buying and planning offices, it pitched largely on its expertise and didn't "buy" the account.

Betsy Lazar, general director of GM advertising and media operations, wouldn't comment on the company's future plans. But a spokeswoman made it plain that the automaker is hungry for ideas on how to go to market.


"We think [Starcom] will be able to bring a lot of new ideas to the table," she said. "More innovation is the reason why the review took place. We are looking for new ways to address some issues and with new technologies."

One indicator of the importance new media is playing in GM's future plans is the fact that Curt Hecht, the senior VP-managing director overseeing Planworks' digital operations, played a key role in the pitch.

Dennis Donlin, president of Planworks and leader of the successful shootout against Interpublic, said combining buying and planning allows GM to design and execute media initiatives faster-something essential in the current environment. "The windows of opportunity to jump on things are compressing," he said. "In an Internet-based world, if you have a good idea someone's going to find out about it almost instantaneously."

The combination also will enable Planworks to come up with measurements to find out quickly what's working and what's not so GM can determine how to allocate resources. "You have to get new metrics in this environment," he said. Traditional measurements of awareness "are not dynamic."

If the past year is any indication of near-term marketing plans, GM will be looking to do more brand-integration programs like Pontiac's recent deal on NBC's "The Apprentice" and Chevrolet's expanded integrated pact with the Country Music Association. It's also stepped up interactive efforts, such as five-second films for Cadillac.

the numbers

The numbers tell the story: GM boosted online spending by nearly 50% to $66.1 million, or more than 2% of overall spending, according to figures from TNS Media Intelligence. While still its largest expenditure, network TV spending has slipped since 2000. In 2004 it represented 29% of GM's measured spending of $2.58 billion, down from 33% in 2000, TNS figures show.

"TV will still be a part of it," said an executive close to GM, "but they're heavily investing in experiential marketing and promotions and Web things and are open to new ideas and will find money for those things."

The decision to consolidate media buying and planning with GM Planworks was driven by factors from procurement to dissatisfaction with Interpublic's performance, said executives familiar with the review.

Contributing: Matthew Creamer

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