The advertising community has been grumbling for months, mainly about General Motors.
The automaker's North American Operations has ordered its car divisions to cut ad budgets, and magazines have felt most of the pain.
But more belt tightening is on the way.
GM can no longer afford to launch redesigned models and support each lavishly. During the last two years it did just that, and its advertising, marketing and promotions budget shot up by about $2 billion.
With 18 more redesigns in the next two years, GM cannot afford another $2 billion increase in ad spending - especially when market share rose only minimally with the last round of new products and increased ad spending.
GM also realizes it is just beginning brand campaigns at Buick and Pontiac. That means more ad spending, and it does not include promised brand campaigns at Cadillac, Chevrolet and Oldsmobile, or the big bucks GM will spend this year to launch the new full-sized pickup.
So GM is trying to constrain its spending now.
But there is more to it than GM trying to hold ad spending in check. Chrysler Corp. has served notice to the broadcast networks that it is tired, as an advertiser, of footing the bill for fat salaries to TV stars, fat production contracts to TV series and fat fees for the rights to broadcast professional sports.
What is more, Chrysler said while the cost of advertising on network TV has soared, there are no tools to measure the results. GM and Ford Motor Co. have echoed the complaint.
Bud Liebler, Chrysler's vice president of marketing, said the automaker is building a database that will enable it to target the right message to the right people: 'Something the networks could never do for us,' he said.
Meanwhile, Lincoln confirmed it is considering shifting its $52 million TV ad budget from the networks to cable, where demographic groups can be better targeted.
The auto industry is the largest mass-media advertiser. But soaring costs and unmeasurable results are leading automakers to rethink their strategy.
Frank S. Washington welcomes comments. Call him at (313) 446-0374, or send e-mail to [email protected]