DETROIT–General Motors Corp. is holding its massive U.S. advertising spending steady this year from last, despite increasing pressures to cut costs, but is shifting more of its budget to regional media from national television and print outlets, according to a top company official.
Overall spending this year will be “about the same,” said CJ Fraleigh,GM’s executive director of advertising and corporate marketing. “Because of the realities of the marketplace, we have shifted more dollars toward local spending.”
He declined to comment on how much GM is spending or how much money it has moved to local initiatives, other than to say the amount shifted is “measurable.” Industry estimates put GM’s annual ad spending as high as $4 billion, making it the biggest advertiser in the U.S.
Faced with increasing price competition in a shrinking market, GM and other automakers have stepped up discounts and other incentives for buyers. Mr. Fraleigh said local advertising is better suited to this kind of deal-driven pitch aimed at getting consumers into showrooms. National media, like television and magazines, are better suited for
general brand building and launches of new models. Mr. Fraleigh noted that GM continues to advertise heavily in national media, with major campaigns for new models from Buick, Chevrolet, and other divisions planned this year.
“We’re still a leading network advertiser,” he said. He said the shift doesn’t reflect any broad policy change but is “situational.”
The increase in local spending also comes as GM is expanding collaboration with dealers on local advertising through the creation of marketing groups in major markets.
Mr. Fraleigh joined GM earlier this year from Pepsico Inc. He said he aims to improve the quality of GM’s ads, citing the highly regarded “Like a Rock” campaigns from Chevrolet trucks as a model, and to ensure GM gets as much advertising power as it can from its huge spending.
“Our first opportunity is to make our existing advertising more effective,” he said. “There’s no indicator that says we are significantly overspending on advertising.”
Copyright (c) 2001 Dow Jones & Company, Inc.
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