GM’s $1.6 Billion Question

With Joel Ewanick, General Motors’ new VP-marketing, evaluating all four of the carmaker’s vehicle brand positions and messaging, this seems like a good time to also revisit media.
The “old” GM consolidated all of its media planning a decade ago at Publicis Groupe from its 17 different creative agencies to streamline things and to make better and faster decisions. The auto giant was then in a consolidating mood, breaking down the sales and marketing silos internally for its own vehicle divisions and relocating everyone in the Tubes’ world headquarters along the Detroit River.
In 2005, Publicis’ Starcom MediaVest Group won GM’s media buying account in a shootout against incumbent IPG. GM was then spending $3.5 billion annually on national and regional dealer group advertising. That fell to $2 billion in 2008 and $1.6 billion last year, says Nielsen.
The consolidated media move was supposed to insure that ads for different GM brands wouldn’t still show up in the same magazines or same TV shows. But that was still happening as recently as last fall when similar-looking “May the Best Car Win” spreads for two different GM brands showed up in the same issues of Newsweek and BusinessWeek. GM called it a “miscommunication in traffic instructions” at the time. But GM was just filling the ad holes Publicis bought.
Today the media set-up is broken for the leaner “new” General Motors Co., which will celebrate a year out of bankruptcy reorganization July 10. Starcom takes a shopping basket to buy media by the pound on the open market and then tries to parcel it out to the GM divisions. That system prevents GM from optimally reaching its target customers. The media agency will sometimes coerce a vehicle brand to expand a car’s target to find a home for already-purchased media inventory.
On a positive note, Starcom’s media buys for GM are very cost effective. But the buys don’t always align with the brand strategies.
No disrespect to Starcom, but planning should be returned to the creative agencies.
So, what do you think, Joel?
Time for a change?

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