Snip-Snip: GM slashing $800M from marketing budget (yes, even Transformers)
Click above for high-res gallery of the Transformers cars from GM
When you're forced into a life-and-death situation like General Motors, a lot of tough calls have to be made – yet some are more obvious than others. In this case, The General has made it clear that it plans to slash its North American marketing spending – by some $800 million dollars.
That's an extra $200M on top of the $600M that already GM vowed it would cut by 2010 in a disclosure it made back in December. And it isn't just things like SuperBowl commercials, and print ads – vehicle incentives will also be impacted, something that will doubtlessly affect the already tough sledding that dealers are experiencing.
Another example: Transformers 2: Revenge of the Fallen. Despite early efforts to tie Chevrolet to the Shia LaBeouf/Megan Fox Paramount sequel with efforts like the Corvette Centennial Concept and "Jolt" Volt unveiling at the Chicago Auto Show, trade publication Advertising Age is reporting that GM will not spend much money to co-promote the movie.
For the initial 2007 Transformers movie, GM is said to have spent "tens of millions" of dollars in advertising-related initiatives, but not only can the financially-strapped automaker not afford to do so, it realizes it may also not be a good idea in light of the taxpayer bailout. AdAge is quoting one insider as saying:
"You're not going to see any TV media that I know of. Even though you can make a case for it from a marketing standpoint, it's the kind of thing that might get you roundly criticized in light of today's climate. It's viewed as too risky, sort of like Citibank's deal with the Mets. GM can't afford to do that.The message is clear: Bumblebee, Sideswipe, Jolt and Mudflap... you're on your own.
[Sources: Automotive News; Advertising Age]
Reader Comments (Page 1 of 1)
Gary 3:06PM (2/27/2009)
Advertising is a powerful thing. The general public is oblivious to auto choices out there. If there is no advertising or marketing of specific GM models, customers will not know what cars GM offers.
Look at Saturn's revamped lineup. Excellent cars, but sales haven't been that great. I've seen minimal advertising for them.
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Jim 4:01PM (2/27/2009)
GM (and dealers) need to keep up the marketing, but they can save money by doing it more intelligently. Newspapers are dieing, cut them. Magazines are also hurting, cut back there. TV can still make an impact, so be strategic there. But one place that needs more is online. All of the manufacturers needs to focus on marketing where they can measure results, and get a lot more bang for the buck. I'm shopping right now for a car and I'm doing everything online. the days of me doing my research in magazines is over. Show me a cool car that fits my needs on TV and I'll jump online and google it. I no longer get news from newspapers - I go directly to new websites or blogs (like Autoblog). Keep the value in the car (price it right) and pump up online marketing and they'll see results.
J.Crew 3:24PM (2/27/2009)
"Autobots...pull back!!"
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Steve 3:27PM (2/27/2009)
BumbleBee is not happy. He just slapped sideswipe, who slid against Jolt, and got electrocuted, and then fell on Mudflap, and got all dirty.
It was a sad scene folks... a very sad scene.
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UH2L 3:39PM (2/27/2009)
This is $800M that won't go to all the media companies and ad agencies all around the country, especially on the east and west coasts. Maybe people out there in those and supporting industries should consider this when they decide which vehicles to buy.
I still think that advertising is important, especially when your sales are down, but if they focus on on-line advertising, it may be cheaper but nearly as effective.
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71cuda 4:42PM (2/27/2009)
Are you saying they shouldn't buy GM cars because they aren't getting the $800M, or they should buy GM cars, so GM can afford the $800M in advertising?
Mazda FTW! 4:05PM (2/27/2009)
On-line advertising is important but the traditional media outlets are still quite popular among those looking for cars. They just need to find a good balance.
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b0nesc 4:18PM (2/27/2009)
You want cheap marketing? Put easily removable Autobot stickers on the outside of all new Camaros at the dealerships.
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BigTeebo 4:32PM (2/27/2009)
This means you will see car commercials every 45 seconds on TV, as opposed to every 25 seconds.
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Blacksabre 6:54PM (2/27/2009)
See? There's a silver lining to everything.
No more Transformers. The cars that wouldn't die...did.
I seriously doubt that GM sold one car as a direct result of their inclusion in these idiotic movies. Why? Because the average viewer age of these movies is about 9 years old, and that's not exactly a lotta market share.
Now if Ford just would dump Knight Rider...
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Derek 7:11PM (2/28/2009)
While Transformers did feel like a giant GM commercial I don't know a single guy in my age group (I'm 28) that did see the movie, and didn't want the new Camaro because of it. Seems a bit childish I'm sure, but its like the saying goes...
The only difference between the men and the boys is the price of their toys.
John McDonald 9:36AM (3/02/2009)
The $800M figure includes a significant amount of incentive spending
... which, if you've been watching sales volumes lately ... makes
sense because volumes are dramatically reduced. If you don't sell the
vehicles, you don't have to spend the incentive money, so you cut the
budget allocation. The $600M figure over multiple years was a subset
of that number because it just reflected reductions in advertising and other
promotional-type activities.
It's easy to get apples and oranges mixed up here ... and the
advertising media types sometimes look for sensational headlines that
don't always reflect the full story. We don't disclose specific
advertising budgets, regardless, but everyone should know that each
and every expenditure is reviewed very closely for appropriateness
and effectiveness in the context of today's environment. And that includes the amount we spend in marketing for incentives.
John McDonald
Spokesman
General Motors, Detroit
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Jeanne Marie Cloud 6:28PM (4/24/2009)
WAM, Morgan Chase. Merrill Lynch, Freddie Mac, Bear Tear, Morgan Stanley, Goldmeyer Sachs, Lehman Bros, Fannie Mae, AIG
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