General Motors is looking for a way to improve local advertising without resurrecting the dealer marketing groups it disbanded a year ago.
Mike O'Malley, general manager of GM's North Central Region, is heading the automaker's efforts to communicate better with dealers about local marketing.
O'Malley wants GM's market area managers to start meeting in March with local groups of dealers to discuss marketing strategy. Each local group would represent a single brand: Buick, Cadillac, Chevrolet, Oldsmobile, Pontiac or GMC.
But O'Malley and other GM officials emphasize that the dealer marketing groups as they once were will not return.
Whether that satisfies the majority of GM dealers is doubtful. Many want to regain direct control of the $600 million in annual advertising spending that the dealer marketing groups controlled until 10 months ago.
Some complain that the money that once came to their markets now is going to larger markets where GM wants to improve sales. And when GM does buy ads in their markets, dealers say, they are not told about them until it is too late for them to coordinate their efforts.
Lawsuits and complaints
The elimination of the dealer marketing groups last April, part of GM's decentralizing of its sales and marketing organization, added to a long list of dealer complaints in 1999.
Dealers in Chicago and the state of Indiana are suing GM to retake control of the advertising funds the company once provided the dealer groups.
GM spokeswoman Rebecca Harris would not comment on the lawsuits, saying only that GM is working to resolve them.
Other dealer marketing groups continue to meet in the hope that GM will change its mind. In the Los Angeles area, dealer John De l'Orme meets with fellow Southern California Buick dealers every three months, but they no longer use the meetings to plan media buys.
'We don't have any money to spend,' said De l'Orme of Thorson Motor Center (Buick-GMC).
In the Minneapolis-St. Paul area last month, seven Oldsmobile dealerships went a step further. They decided to pool their own money to buy local TV spots. Wally McCarthy, owner of four GM dealerships in Minnesota, is president of the group.
'This is not necessarily knocking what Oldsmobile or General Motors is doing, but they're lacking something' in their regional ads, McCarthy said. 'We're lacking the voice of the local dealer.'
GM has no problem with dealers setting up their own associations, O'Malley said last Wednesday, Feb. 9.
Regaining a voice
The old dealer marketing groups allowed dealers to get together, share ideas and align what they were doing with what was coming from the factory, O'Malley said last week. That no longer happens when GM market area managers meet with dealers one-on-one, he said.
'What we saw was there was an intangible in those dealer groups that you don't necessarily see on a hard-core business analysis,' he said.
O'Malley said GM wants to re-create that dealer marketing group atmosphere but without giving dealers direct control of local ad spending. That control will remain with GM's five regions.
'The key thing in my mind is communications,' he said, echoing the conciliatory speech delivered last month by GM Chairman Jack Smith to dealers at the National Automobile Dealers Association convention in Orlando, Fla.
But McCarthy and other dealers believe the advertising funds will be better spent if dealers are in charge. McCarthy said GM can take weeks to respond to a new opportunity or problem in a local market. A dealer marketing group can respond within two days, he said.
O'Malley disputes that. 'There's no credence to that claim whatsoever,' he said. 'We can turn around a program in 24 hours.'
