General Motors to Cut Media Spending, Drops Super Bowl
One of the big success stories of online advertising was General Motors' pledge to shift at least half of their ad spend over to online in the next year -- a total of $1.5 billion in new cash. Now it looks like that money is up in smoke, as the auto manufacturer, which lost $15 billion in the last quarter, is now saying it will cut back significantly on its digital ad spend. Even more surprising, the company has opted out of the biggest advertising event of the year, the Super Bowl. Ad Age reports:
General Motors Corp. plans to cut its digital-media budget after dramatically increasing it in the past few years, the automaker's North American marketing chief told Advertising Age.Auto ad spend has been one of the major drags in the ad industry as of late, as Nielsen reported last week. The news that GM has decided to bow out of the Super Bowl has to send even bigger shivers down the ad world's spine. The auto manufacturer says that the fact it won't have a new model to debut during the Super Bowl is the impetus behind its decision. While this may be true, the company did not seem to shy away from airing ads during for the 2007 Super Bowl, featuring an existing GM model in perhaps the most depressing Super Bowl ad in existence.In his first interview detailing wide-ranging cuts expected at the automaker, which lost $15 billion in the last quarter, Mark LaNeve, VP-vehicle sales, service and marketing, said GM "is going to pull back slightly in all media types" in 2009, noting that the company's U.S. media partners are helping it become more effective. In each of the last two years, he said, GM pulled back on TV spending and beefed up digital.
Within the United States, auto manufactures have always been the big spenders within the advertising market. Weak auto sales, high gasoline prices, and the news that auto companies plan to slash $3 billion from their ad spend this year mean that holding companies like WPP, with its significant ties to the auto industry, are in serious danger.