GM Asks The $3 Billion Question
GM spent $4.26 billion for advertising last year, globally. 67 percent, or $2.85 billion were spent in the U.S. A good chunk of this budget, around $3 billion, are up for review. Meaning: The agencies that handle it must come up with concepts and defend theirs against concepts of other agencies that want to handle the funds. Please note that this has nothing to do with creative ideas, or not in the true sense of it. We are talking media buying here, buying time on network, space in magazines, clicks on Google. It should be as interesting as deciding whether your accounting work will be done by Peat Marwick or by KPMG. (Loud howls of protest from the media agencies, who are as proud of the cleverness of their media plans as the CPA firms are pleased with their creative accounting.)
The adworld is abuzz about the move, $3 billion possibly changing to new handlers can shake up carefully cultivated relationships. The question everybody is asking: “Why?”
The answer most people are giving: “Money.”
After all, what else can a media buying agency bring to the table than a few more gross rating points for a few dollars less? It could also be that GM simply wants to reduce its ad spend, something that can be obscured while changing media agencies.
Former Chrysler marketing executive Julie Roehm, now a consultant, has different other suspicions. She is quoted by Automotive News [sub] as saying: “I don’t think it’s about cost cutting. It’s smoke and mirrors to hide bigger problems.”
She points towards Omnicom’s Goodby, Silverstein & Partners, an agency that was brought in by Chief Marketing Officer Joel Ewanick withouth a review. That agency has come under criticism for turning in unremarkable work, their “Chevy runs deep” slogan fails to resonate. Their godfather Ewanick recently tried to deflect criticism by giving Goodby Silverstein “B and C work” grades. That only lasts so long. Nothing however focuses the attention of upper management as much away as the decision of who will spend their $ 3 billion in the future.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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