Truth in GM's Advertising?

It's a statement that can be the bane of any marketer: "Truth in advertising." No, not because we like to lie, but because the very notion of truth -- or what constitutes misleading -- can be such a gray area that sometimes you need a bevy of lawyers to figure it out. Just this week, General Motors got a taste of what it's like to be on the wrong side of accusations of dishonesty. The Competitive Enterprise Institute, an advocacy group based in Washington, D.C., filed a complaint with the Federal Trade Commission accusing GM of deception in its most recent ad campaign.

You might have seen the ad in question. It shows GM's CEO Ed Whitacre in a clean and pristine factory, walking among the employees, talking (well, bragging) about the fact that GM has paid back its multi-billion-dollar government loan in full and ahead of schedule. I sure haven't seen that many more people driving Caddy's and Chevy's, though GM sales were up 33% in April (compared to an utterly abysmal April in 2009). But has the company really been moving enough metal to pay back that enormous loan? Well, it turns out the answer is both yes and no.

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GM did pay the loan back but they did it by using other government funds. The best quote I've seen on the issue said that GM paid off its MasterCard bill using its Visa card. There's nothing black or white about the situation, and the grayness that surrounds it is likely why GM's lawyers green-lighted the ad in the first place. So is the claim truthful? Yes. Is it misleading? Undoubtedly. My question to the GM executives is whether they slept well the night after they approved this ad?

I think this situation smacks of desperation -- and that's something I can certainly understand. When I was at DaimlerChrysler, there was often enormous pressure on the marketing team to increase short-term sales. Making claims was one of the tricks we used to get people excited about how tough, long lasting, or economical our products were. So we spent oodles of money testing our vehicles against the competition (and paying third-party companies to certify the results).

The vehicle that got most of this attention was the Dodge Ram. While Rams are great trucks, so too are Ford F-150's and Chevy Silverados (and even Toyota Tundras). We spent a lot of time crafting statements of superiority that our dealers could rally around, that we could shout about on TV, and that we could use for demonstrations at consumer events. But every now and then, we would make a claim like, say, "The Most Award Winning Line-Up of Trucks on the Planet," that would get the other manufacturers stirred up. Then we had to spend the money on legal fees to prove our point. Mostly we won, but sometimes we had to pull an ad and change our claim. This is pretty much standard operating procedure for the industry.

While angering your competition is one thing, it's another circumstance entirely when you run afoul of your customers. One of the situations I had to deal with at DaimlerChrysler was how to respond after 9/11. You probably remember GM's "Keep America Rolling" ad campaign that launched shortly after the 9/11 tragedy. Now I'm sure GM wanted to help our nation's long and emotional healing process and assist in the rescue and rebuilding efforts in New York and Washington, D.C. But this ad campaign was clearly designed to capitalize on the situation to sell more vehicles. We had many, many strategy sessions at DaimlerChrysler talking about whether or not follow the same path as GM. We decided against it because of the risk that many Americans would likely perceive the ads as crass. (Instead, we donated vehicles to some organizations that were involved in the ground zero efforts.) Alas, GM did very well with "Keep America Rolling," and our fears that the public would feel misled didn't materialize.

As I think back on it today, however, I don't regret our decision. My basic rule for ensuring "truth in advertising" is pretty simple: Would my mother be proud of me for this work?

There are real and unfortunate downsides for any advertiser that feels as though it can prey on the na?t?f the consumer. I think that's why we continue to see these reactions to GM's current ad campaign. Worse, this backlash also brings into question the decision making process at GM (in fact, after the ad ran, GM announced a new marketing boss with its appointment of Joel Ewanick). It's disturbing that there are people at GM who must have believed that the complete truth on this situation would not come out -- this despite the company being so closely scrutinized because of having received Federal assistance in the first place. Wouldn't it have been more compelling had GM waited until it actually paid back all of the money before it bragged about it?