By on May 21, 2012

Advertising Age, the industry rag read by Mad Men worldwide, found a simple reason for GM first unfriending Facebook, followed by a much bigger whopper, a “No thanks” to Super Bowl advertising. Ad Age says the decision is driven by the simple need to save money.

A while ago, we told you that there are two quick fixes if a car company wants to make its books look better: Cut marketing expenses, or cut R&D. Or, as in the case of GM, do both.

GM did cut about a quarter of the workers at its R&D facility at the Warren Technical Center in suburban Detroit.

Meanwhile on the marketing side, GM’s vhief marketing honcho Joel Ewanick “has been on a mission to wring $2 billion over five years out of marketing costs for the company’s flagship Chevrolet,” Ad Age says.

Ad Age also thinks that Ewanick is driving a hard bargain. Just like the Facebook announcement was timed to rain just a little bit onto Facebook’s IPO parade, the Super Bowl news was strategically placed at the start of the annual upfront marketplace, where ad buyers strike deals for commercial time in the coming TV season. CBS wanted to raise the price of a 2013 Super Bowl ad to $4 million, up from an average of $3.5 million for a 30-second spot NBC got this year.

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37 Comments on “Why Won’t GM Go To The Super Bowl? It Doesn’t Have The Money...”


  • avatar
    rpol35

    I don’t think cutting R&D expenditures is a very wise move, especially considering GM’s somewhat spotty record over the years with technical currency (and I am leaving the Volt out of the discussion). We are really into “game on” time right now as the bar has been raised on higher fuel mileage, alternate fuel sources, etc.

    As for marketing expenses, maybe so, or just employing “better” spending. I can remember cutting edge Super Bowl ads but I don’t think a single one ever motivated me to buy the product or service advertised. As for the cost of a 30 second Super Bowl spot, I don’t think that counts as “better” spending. GM is better off to “fuggetaboutit”.

  • avatar
    harshciygar

    I think GM is making a good move on both counts.

    As has already been widely noted, most people who grew up with the Internet have managed to “tune out” ads. I’ve literally never intentionally clicked on an advertisement from Facebook.

    Same deal with the Super Bowl; I sometimes enjoy the ad’s, but they’ve never moved me to buy a product.

    • 0 avatar
      LordDetroitofLondon

      Ever since AdBlockPlus for FF came out a few years = almost zero ads for me. The only time I see ads is when I have to browse using IE at work sometimes. Even then, I never click except by accident.

  • avatar
    gslippy

    Super Bowl ads may help sell product if you have something new and novel to offer. GM doesn’t, so it’s wise to not waste money on it.

    • 0 avatar
      tikki50

      You realize that you comment lacks any intellegent thought. Almost all OF GM’s line up has been changed over the past 2 years.

      • 0 avatar
        KixStart

        What do they have that’s new and novel?

        OK, the Volt.

        What do they have that’s new and novel which might actually sell and therefore rates a SuperBowl spot?

        Ford seems to be relatively happy with their FaceBook spend. Why? What’s Ford doing differently? Or is Ford deluding themselves?

      • 0 avatar
        CJinSD

        Ford knows social media marketing doesn’t work as surely as anyone does, having dead launched the Fiesta with the most elaborate SM campaign in memory. They made their facebook announcement to support the facebook IPO after GM shot holes in its premise. If we had a functioning government, they’d be investigating Mullaly’s facebook holdings. Did he use Ford shareholder money to protect his own poor investment?

      • 0 avatar
        Luke42

        “OK, the Volt.”

        But GM’s PR department is afraid of the Volt.

        Their NPR underwriting blurb says something like “Chevy Volt: Now with airbags!”

        Really?!?! I would never have guessed that a 2012-model year car would have airbags. Every car upmarket from the Tata Nano has airbags.

        Why don’t they talk about what’s unique and remarkable about the car? It *is* a remarkable vehicle — it’s not a perfect vehicle for everyone, but it is innovative and interesting. It is a triumph of big engineering, and American manufacturing, even if it is a niche vehicle. They had the gumption to build and sell something that Toyota has yet to match (in some respects, Toyota wins in other respects). Why not talk about that?

        “Chevy Volt: Now, with airbags!” strikes me as far worse than no marketing. What is this, 1995? The Volt is a freaking electric, and that’s all you can say about it? Maybe it needs airbags to be a better political punching bag? Or maybe they should mentionthe aspects of the product that make it worth talking about in the first place.

    • 0 avatar
      OldandSlow

      Gslippy you are are definitely slippin or not up on the truck market.

      GM is introducing their redesigned pick up line up next year. The audience for football and trucks go hand in hand where I live.

    • 0 avatar
      gslippy

      @tikki50, OldandSlow:

      I realize GM has changed their lineup, but most of it
      a)was advertised last year, or
      b) really isn’t new or novel.

      We’re talking about ads to be run next February. The Volt has already been paraded, as was the Cruze and Sonic – they were definitely new and novel. The 2013 Malibu will sell even without advertising it, and frankly, it’s not that great.

      Updating a pickup truck doesn’t qualify to me, unless it’s got something dramatically different about it – think 2011/2012 Hyundai Sonata and Kia Optima.

      GM will spend their advertising dollars more efficiently in other venues.

      • 0 avatar
        billfrombuckhead

        A new fullsize Chevy and GMC truck, always a contender for best selling vehicle. New Suburbans and Tahoes probably as well, 2 American icons that are well represented from the little league field to the White House to US embassies around the world.

        A new Impala, the best selling large car.

        2 new vastly more fuel efficient and modern Cadillacs.

        A new compact truck

        BTW, has anyone driven the new Malibu, it looks like it cost $10,000 more than a Camry.

        The Super Bowl advertising costs have got out of hand while the prestige of the NFL is collapsing with all the head injuries and poor sportsmanship.

        I predict GM is going to have a comeback that shocks all the armchair CEO’s and braindead pundocracy.

      • 0 avatar
        KixStart

        billfrombuckhead: “A new fullsize Chevy and GMC truck, always a contender for bestselling vehicle.”

        Hey, they could show it churning through the mud, or across the desert or through the forest, towing manly loads. Nobody’s ever done that for a SuperBowl commercial before.

        In other words… why bother?

        In fact, what’s new about the truck? I mean really *new*, not just an extra liter of displacement for another 32hp that nobody really needs…

        The way I see trucks being used every day, the best *new* thing would be sliding doors to keep the kids that bruiser is hauling around from dinging the other cars in the lot. Or a flip out tray with elevator mechanism for sacks of burgers comin’ up from the drive-through.

    • 0 avatar
      bd2

      Also applies to Facebook advertising.

      Waste of $$ if simply advertising what already out there and known to the public; but useful when launching a new product.

      As for SuperBowl advertising, it would depend if the game coincides with the timing of the roll-out of the new ATS, Impala, etc.

  • avatar
    Zackman

    Good for GM. I don’t watch the Super Bowl for the most part – just an excuse to have friends over and eat stuff wifey normally won’t allow me to have.

    The ads? I’m sorry, but putting out all that money to get eyeballs – many watch solely for the ads, not to buy the product, but simply to be entertained – I just don’t see it as a good investment. After all, I didn’t buy a new Jetta because of the cute kid dressed as Darth Vader.

    These days, the economy being as it is, all companies need to re-address how to best allocate their resources. Is this the right thing for GM to do? Time will tell, but I’m worried more about the future of GM – IF it has a future aside from just breaking it up and Chevy going it alone with Cadillac. The times, as the song goes, are a changin’.

  • avatar
    forraymond

    Didn’t I read that Government Motors has all our tax dollars? I’ll have to go back to a previous article and cut and paste that here.

    Lots of money or no money – I’m confused by the reporting.

  • avatar
    toxicroach

    I think the Superbowl thing is a bad move. The point of the Superbowl ads isn’t to move product as much as it is to gain or maintain position in the public consciousness.

    When you think about buying a truck, what are the options that spring to mind?

    Ford
    Chevy
    Dodge

    Toyota, Honda, and Nissan are not so obvious. While skipping the Superbowl won’t remove Chevy from that list, it’s not a great move. Not over 4 million bucks.

    It’s why Coke and Pepsi always spend so much on ads; its so people will think “I want a Coke” or “I want a Pepsi”.

    • 0 avatar
      Pch101

      “Not over 4 million bucks.”

      If Ad Age is to believed, GM is trying to use its power as a major advertiser to get better terms. The cost of these ads keeps spiraling upward, and it may not seem worth it.

      On the other hand, old media is shrinking, and the TV networks need to get their revenue whereever they can get it. My suspicion is that the network will shrug its shoulders and sell the spot to somebody else. Other advertisers will be interested in promoting their brands, not in forming an alliance with GM to hold the line on Super Bowl advertising costs.

  • avatar
    stevelovescars

    I think dropping The Superbowl ads are a smart move. I don’t think GM only bought one spot, so this is more like a $12 million savings.

    One reason advertisers spend so much on these spots is that I have to believe there are a nice bundle of game tickets negotiated into the deals. I could think of a lot of more cost-effective ways to reach prospective buyers (in market) than with these TV ads… And the corporate execs can just buy their own darned tickets to the Superbowl on their own.

  • avatar
    Lynn E.

    $3.5 million for a 30 second ad! Seems like sports is becoming a bubble in our economy. Lets go play softball with our fellow workers or go for a bike ride and stop channeling millions to team owners and entertainment companies because a minority want to sit on their ass watching large men run around a field grabbing each other.

  • avatar
    Botswana

    See, this is why I am a big fan of capitalism. Superbowl advertising has gone beyond ridiculous in terms of cost. Just getting the spot is expensive and the ads themselves are often costly to produce. If more companies say “nay” this year then the cost of advertising for the Superbowl will eventually go down.

    Though realistically I suspect someone will just fill in the GM gap and they’ll have no problem filling spots. Still, I figure the cost will continue to rise till it finally gets to the point where people question its worth.

    Also, from the last 2 superbowls what I remember is a lot of ads that didn’t really “sell” their products. I remember one with Kim Kardashian that I’m sure was supposed to be sexy and selling some kind of clothing but I was too busy rolling my eyes to remember. Maybe if they had toned it down, made it more about pure sex appeal and didn’t try so hard to Kardashianize it I might have actually remembered the product or not felt so put out.

    I digress, badly. I’m still waiting to see the new GM not act like the old GM and so far remain unconvinced that the bailout was a good idea. Spending billions of tax dollars to put off a bankruptcy that will happen eventually seems like a bad investment. I want GM to succeed only so that maybe it will have been worth it. Cutting R&D seems like a bad move but cutting Facebook ads seems smart. Cutting Superbowl ads? I don’t know, but it seems like Chevy doesn’t need to get their name out there so much.

  • avatar
    PaulVincent

    For some perspective, I just read that total U.S. advertising expenditures for 2011 were $144 billon and global ad spending was almost $500 billion.

  • avatar
    200k-min

    Cutting R&D = Stupid
    Cutting FB & Superbowl marketing = genius

    General Motors needs to build organic growth, i.e. build amazing vehicles that people rave about to their friends who then go out and buy the same vehicle on word of mouth. That’s how Honda and Toyota got to where they are today…not by pissing away cash on the Superbowl. People literally were telling their friends “I love my Camry, it has never given me any problems” and then their friends went out and bought one. Now…can Chevrolet make a car that people say that about outside of a pickup truck? Seems a long shot when the R&D staff is collecting unemployment. Wake up GM, my co-workers already are raving about the new Ford. You’re already behind the 8 ball.

    • 0 avatar
      jkross22

      +1

    • 0 avatar
      Pch101

      “Cutting R&D = Stupid”

      During 2011, GM spent $8.1 billion on R&D. That’s an amount similar to what was spent by Volkswagen AG, $2.8 billion more than Ford’s expenditures during 2011, and $1.5 billion more than what the old GM spent during 2006, prior to the financial crash.

      The TTAC story referred to 100 R&D jobs being cut at the Warren Tech Center, which houses 16,000 employees. Pretty much a drop in the bucket.

    • 0 avatar
      fredtal

      I’ve had more problems with my 1999 Silverado than my 2007 Audi A3 at the same milage, 65,000.

      • 0 avatar
        Landcrusher

        As a new Audi owner, and a skeptical GM looker, I have to call foul. Miles under 100k are not what generally bother modern cars. Years makes a lot more difference now.

  • avatar
    obbop

    Maybe you folks are not coerced into making a purchasing decision via a Superbowl ad but the linked-to ad compelled me to buy my own cat herd.

    SFW

    ww.youtube.com/watch?v=Pk7yqlTMvp8

    add a “W” to make the link work

  • avatar
    Landcrusher

    Is it just my prejudices, or does this simply conform to GM’s real mission as a job creation rather than profit or value creation company?

    • 0 avatar
      CJinSD

      More specifically, a union job retention mission. They’ve treated salaried workers like Kulaks from the start.

    • 0 avatar
      ExPatBrit

      It’s just your prejudices, the advertising folks who would have created these GM Facebook or Superbowl ads are people too.

      In year’s past I used to watch , but 4-6 hours for a one hour game is kind of ridiculous, and frankly somewhat tedious. I usually record it and watch later on my DVR.

      I’m not alone I don’t think a lot of people actually “watch” it, it’s mainly background noise.

      • 0 avatar
        Landcrusher

        Good point about the jobs, but aren’t GM jobs what they need to stay in business? They can point to GM jobs, or supplier jobs, but not really ad bureau or network jobs. People don’t care about the poor ad men and TV execs.

        Oh wait! Is the Super Bowl on Fox? Is that what this is really about? That would be hilarious.

      • 0 avatar
        ExPatBrit

        Easier to tweak external expenses than fixed costs. I am surprised they just didn’t reduce the number of ads.

        Based on rotation I think it’s on CBS. I agree that it would be amusing because of the “dust up” over the Volt bad mouthing editorials on Fox.

  • avatar
    Mullholland

    Finally, GM and I have something in common. They won’t be going to the Superbowl because they don’t have any money–and I won’t be going to the Superbowl for exactly the same reason. This is truly a sad day at GM. The party is over, in more ways than one. Where will all the hot-shot corporate marketing types, regional sales muck-kidy-mucks, gold-encrusted dealers and spray-tanned dealer wives go to escape the winter blues? The horror, the horror.

  • avatar
    "scarey"

    It would make sense if GM used the money to re-hire those R & D workers that they laid off/fired. GM NEEDS R & D more than most companies.

  • avatar
    doctor olds

    GM has over $30 Billion in cash and marketable securities, more than enough to buy many super bowl ADs. This decision is simply a business decision to discontinue AD expenditures which are not cost effective.

    • 0 avatar
      aristurtle

      Also, they get media coverage with “GM isn’t buying Super Bowl ads!” stories at the low low cost of $0. Hell, this is the second article on the subject on this site alone.


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