Chyrsler, Ford Cut Ad Spend; GM, ToMoCo Up the Ante
When the going gets tough, the tough amp-up the ads. As the Detroit News reports, that's certainly the philosophy behind GM and Toyota's increased ad spend. In the teeth of the perfect storm (or dead calm) afflicting new car and truck sales, the automakers upped their first quarter ad budget by 13 and 8.4 percent respectively. That's a not-inconsiderable additional $535m for The General and $291m for the world's largest automaker. On the uh-oh side, cash-strapped Chrysler decreased their ad spend by a full 42 percent (-$186 million) while Ford sliced their ad outlay by 31 percent (-$292m). Ford mouthpiece Jim Cain provided the necessary piercing glimpse into the obvious: "The economy and vehicle sales do affect total spending." However, the DetN points out that "Ad expenses also fluctuate depending on when the Dearborn, Michigan-based company is introducing new and redesigned models." So the fact that Ford's launching the Flex in the first quarter means… what? Meanwhile, once again, Chrysler says… nothing.
More by Robert Farago
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Bet Ford was saving their money for the 3rd qtr launches of the F150, Flex and MKS. Why beat dead horses? Oh, they did waste $millions on those damn Hybrid ads, though.
RF, you need to check the writing in this article. Those figures are not changes in spend, they are total spend. Ford is launching the Flex in Q2/Q3, not in Q1, so Ford's ad dollars would not have shown in Q1. More importantly, given that Ford and Toyota pretty much matched each other in sales, it looks like they are both more efficient with their dollars than GM (some of that is probably the Malibu launch). What I'm really interested to see is the effects of Ford's Drive One campaign (which launched just inside of Q2). Normally, I would have expected large increases in Ford spend, but with their new model of advertising, it may have actually been flat.
I'd hazard that, unless they're going to be spending a smaller ad budget in a smarter fashion, this is something that Ford really ought not to reduce. Product recognition is a real problem for them. GM, on the other hand, can turn down the bluster any time they like. Except for the Pontiac "IS CAR" videogame sport, which was genius.
GM has such a jumble of products and brands that no amount of extra spending is going to move the needle. Heck, they are paying Rush Limbaugh to pitch the Tahoe Hybrid and European Saturn Astra on his show. No lie, the actually pay Rush to call it a European Astra. Wow, talk about using the wrong pitchman to sell the wrong products. If they really must use Rush, they should be having him tell his listeners to prove they are Red Blooded Americans by buying the biggest, baddest GMC truck or Hummer than can afford. Those guys and gals in GM marketing are simply brain dead. Look how the big G6 give away on Oprah worked, or the placement of the Camaro in Transformers years before you can buy the car. Then there was the Malibu ad blitz before good supplies of the car were in dealerships. Freaking idiots, pure and simple.