GM Regional Setup Takes Shape

General Motors has moved more than halfway toward its goal in enlisting dealers for a new network of local marketing groups.

The automaker has signed up about 150 LMGs so far, with a goal of having groups for the five GM brands in each of the top 50 markets—or 250 LMGs—by fall.

The local marketing groups replace the old dealer marketing groups, which ran on contributions from dealers and hired their own agencies.

GM established its regional sales and marketing operations structure, dividing the country into five regions, and took control of the approximately $1 billion in local ad spending.

John Middlebrook, GM’s vice president and general manager, vehicle brand marketing and corporate advertising, said the tough retail market makes local advertising more important.

“As they do come together we tend to support them to get them off and going, and that does create some more local weight for us,” Middlebrook said.

Once 75 percent of the dealers in a given area agree to form an LMG, they can designate 1/2 percent to 2 percent of their sales to go toward local advertising. GM matches 25 percent and also picks up the cost of creative, production and media buying.

GM’s agencies have adapted to the LMG system, partnering with local retail agencies to work with the dealers.

Chevy shop Campbell-Ewald formed a group called CE Retail, led by managing directors Mark Bellissimo and Dan Fletcher. Fletcher was previously with J.W. Messner, which previously handled the majority of the Chevrolet DMGs.

Both McCann-Erickson, which handles Buick, and Lowe Lintas, which handles GMC, have set up partnerships with IPG sibling Jay Advertising, Rochester, N.Y. Jay previously handled a large amount of GM DMGs.

D’Arcy Masius Benton & Bowles, the agency for Cadillac and Pontiac, has established a partnership with Martin Advertising, Birmingham, Ala., which worked under the DMG system for the past 20 years.