Doomed GM Brands Spent $400 Million On Ads Last Year
Guess not all that offline ad money will be moving online.
The bulletpoint-version:
- Pontiac, Saab and Saturn account for 20.7% of GM's total measured-media spending and 16.5% of its sales.
- The three brands together had $286 million in measured spending through August and $400 million for full-year 2007.
- Pontiac -- handled by Publicis Groupe's Leo Burnett -- had measured spending of about $90 million through August.
- Saab's agency is Interpublic's McCann Erickson, Birmingham, Mich. According to TNS Media Intelligence, measured spending was $22 million through August.
- Saturn is handled by Interpublics's Deutsch and spent $174 million through August.
See Also:
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Put these guys out of their misery all ready...bailout Detroit and it's workers NOT GM
www.twitter.com/A_F
That line has fresh products, significant buzz, and a different pricing model.
It would be insane. Pontiac is a "performance" brand. Cadillac is ill-targeted. But why Saturn?
Weird.
There simply is not enough money to make these brands into very marketable and profitable cars. GM does a lot to make sure these vehicles are differentiated with body panels and that they are reliable but it is hard to sell them against the more superior Japanese Brands or Upscale German Brands... They made the HOT Pontiac Solstice (Convertible and the beautiful coupe is coming out in Jan) and the Saturn Sky... But Buick is going after Acura, Pontiac is supposed to be going after (sports oriented)BMW while Saturn is supposed to go after Toyota/Mazda/Honda.
It is a sad time for GM and their employees. If GM does not succeed, the U.S. will have alot more problems than "basic recession."
Plenty of this is paid for when new vehicles are sold. A fee is credited to an account at the region. The regional offices are often satellites for the parent agency head office.
How many dealers are going to do down with them? There are already plenty of ones on the brink...
GM, Ford and Chrysler have a saturated dealer networks causing too much competition resulting in low margin sales leaving dealers with no money to properly promote the products.
Having provided technology services to the automotive industry for online strategies, it dawned on me years ago that the current distribution model is built on an industrial-age philosophy.
For instance, whenever you drive by any new car lot you will see an ocean of tin rotting in the sun, rain and snow. Who owns those units? The manufacturer does as they are floor planned (typically 90 days before interest kicks on for the dealers) and only paid for after a sale is made. Every day closer to next years product sees a reduction in value requiring deep rebates from the manufacturers to stimulate consumption.
In addition, with all of the possible options, trim levels, colors, etc. it is almost as if no two cars are the same. This requires quite a breadth of selection to provide the right mix to be able to deliver what the consumer wants.
Plus the dealers want to make a nice profit which ends up with a system we all just love when we enter one of the "houses of horror" to select and buy one.
Unless the entire distribution chain is made more efficient with ease of selection, example models to test drive and "just-in-time" ordering and deliver in a boutique-like setting, they will continue to hemorrhage $25B a quarter especially considering the finance industry has done such a good job of cannibalizing the qualified consumer loan market lately.
The government money would be much better spent on enticing innovative, new start ups like Tesla and other without the industrial-age baggage rather than dumping the money down the black hole and trying to keep these dying dogs alive.