Big Automakers Bet Heavily On Corporate-Image Work

GM admits past quality problems, as Ford hosts 100th birthday party

The two most ardent supporters of corporate image advertising in the car business are out in full force this summer. General Motors’ advertising mea culpa, breaking this week, and Ford Motor Co.’s ongoing celebration of its 100th birthday underscore both car makers’ belief in non-product-specific marketing.

Clients and analysts remain split about the effectiveness of image pitches for car companies. However, they say GM has nothing to lose. And while the timing isn’t ideal for Ford, which is still restructuring and is struggling on the product side, it has little choice but to exploit a once-in-a-century marketing opportunity.

The GM campaign launches with a print ad from Interpublic Group’s McCann-Erickson, Troy, Mich., that admits the car maker’s quality shortcomings in the past. Subsequent ads will put a positive spin on its pro-environment activities and the strides it has made in improving design. TV spots will break later in the year.

The GM work “is reminiscent of the ‘Have you driven a Ford lately?’ corporate tagline for everything we did in the ’80s,” said Tom Healey, partner at J.D. Power and Associates in Westlake Village, Calif., and a former top executive on the Ford division business at J. Walter Thompson in Detroit. “Basically, that effort was also an apology [for poor quality]. That’s what GM is saying, but it has to extend over all of their cars. It can be efficient if you put a stake in the ground and live up to it.”

Chris Cedergren, an analyst with Iceology in Los Angeles, isn’t so sure. “The investment needs to be placed into the product and into the brand,” he said. “If you do that, then you’re probably not going to need a lot of this corporate advertising.”

GM disagrees. “There is an important group of consumers who have stopped looking at us,” said Gary Cowger, president of GM North America. “We have to talk about incentives, but there also needs to be a longer-term message.”

David E. Cole, president of the Center for Automotive Research in Ann Arbor, Mich., said it would be a mistake for GM not to get out ahead with the message that it has improved. Research indicates that consumer loyalty is terrible, and the 40 percent of customers who say they won’t consider a GM are a “fickle bunch,” Cole said. “So it’s easy to both lose and gain customers. … This is an area that really requires experimental behavior, because it is so competitive.”

GM will spend an estimated $200 million on corporate advertising in 2003, up slightly from 2002, sources said.

Ford is also expected to hold its corporate-image spending level. In 2002, it was $180 million, per TNS Media Intelligence/CMR.

Not included in that budget, however, is the all-brands promotion touting Ford’s 100th anniversary, mainly through Ford division advertising via J. Walter Thompson, Detroit—the climax being five days of event marketing June 12-16 at the Dearborn, Mich., headquarters. The centennial-specific spend is difficult to estimate, a Ford rep claimed, since it is scattered across all Ford Motor Co. models.

Chrysler, meanwhile, largely avoids corporate horn blowing, spending only about $20 million annually on image ads (although it will spend $100 million on a four-month summer sales event beginning this week, funded out of individual Jeep, Chrysler and Dodge brand coffers).

“Customers won’t believe the current generation suddenly got dependable because we tell them about new processes and management,” said Jim Schroer, outgoing evp of global sales and marketing at Chrysler Group. “It requires a new generation of vehicles to get customers to value us the same way they do German or Japanese makes.”

Chrysler last year launched a brief corporate effort touting the “German-ness” of forthcoming vehicles like the Crossfire coupe, 38 percent of which comes from Stuttgart parts bins.

—with Karl Greenberg