GM Planworks' Dennis Donlin: GM wants to carry out its media initiatives faster.
Here are some likely results of that change.
Brent Dewar, GM vice president of North American marketing and advertising, said this month that the nation's largest advertiser needs to do better at tailoring messages for GM vehicles and their targeted audiences. GM likely will make fewer huge bundled advertising buys, Dewar said.
GM shifted its ad-buying account from the GM Mediaworks unit of Interpublic Group of Companies to the GM Planworks unit of Publicis Groupe's Starcom MediaVest. GM Planworks already develops strategies for where GM advertising runs.
By making the change, GM hopes to move faster in a world where the dominance of the 30-second TV commercial is fading fast. It also seeks to quantify the effectiveness of advertising and marketing campaigns.
The need to save money was on GM executives' minds, given the company's financial woes. Executives close to GM's review of its media-buying account say Starcom offered savings through the consolidation of the buying and planning offices.
At the same time, the executives say, GM was dissatisfied with Interpublic's performance on the media-buying account.
Break with tradition
The consolidation "makes a statement that GM is spending more money in nontraditional media," says Linda Fidelman, CEO of ADvice & ADvisors, a media consulting firm in New York. "You need planners to buy nontraditional media."
Curt Hecht, a senior vice president of GM Planworks who oversees the company's digital operations, played a key role in the pitch. His presence suggests the importance GM places on new media, executives say.
GM Planworks President Dennis Donlin says combining buying and planning will allow GM to design and execute media initiatives faster.
"The windows of opportunity to jump on things are compressing," Donlin says. "In an Internet-based world, if you have a good idea, someone's going to find out about it almost instantaneously."
The combination also will enable Planworks to develop measurements to find out quickly what's working and what's not, Donlin says. That will help GM determine how to allocate resources, he adds.
"You have to get new metrics in this environment," Donlin says.
GM likely will pursue more brand-integration programs such as Pontiac's recent deal with NBC's "The Apprentice" and Chevrolet's sponsorship agreement with the Country Music Association. GM also has stepped up interactive efforts online.
GM spent nearly $60.0 million to advertise online last year, compared with $40.7 million in 2003. Online spending accounted for 2.4 percent of GM's total ad spending of $2.51 billion in 2004, according to TNS Media Intelligence.
Broadcast network TV remains GM's largest source of ad spending. But it has slipped as a percentage of overall spending, from about a third in 2000 to 28.6 percent last year, TNS reports.
GM is spending more on nontraditional marketing, including test
drives, special events and Internet activities. GM CFO John Devine said in March that GM would increase its ad spending this year but did not elaborate. GM's spending on magazine ads declined in the first quarter of 2005 from the year-ago period.
"TV will still be a part of it," says an executive close to GM. "But they're heavily investing in experiential marketing and promotions and Web things. They are open to new ideas and will find money for those things."