General Motors said today it has dropped the curtain on advertising during the Academy Awards ceremony, and also confirmed it would pull out of the Emmys in September, as part of the company's efforts to slash its ad spending and marketing costs.
The decision to pull out of the Oscars, which will air in February on ABC and is considered one of TV's most prominent and best-watched events, is "not just about cost-cutting [but also] about best return on investment and spending on properties that work best for our objectives," GM rep Kelly Cusinato said.
"The Emmys [also on ABC] and Oscars are prestigious events, and the decision to release them was a difficult one, especially after over a decade of involvement," Cusinato said. "Timing is always an important consideration for events such as these that concentrate many commercials into one evening. When timing aligns with a major vehicle launch for one of our brands, they fit more naturally into the marketing plans. That isn't the case as we head into the next broadcast season, making it more difficult to justify the ROI."
General Motors spent $13.5 million on media for the 2008 Oscars on ABC, per TNS, and a total of more than $110 million over the past 11 years.
In July, General Motors said it would cut and consolidate its marketing and sales budget, and reconsider its investments in motor sports activity, including its sizable Nascar sponsorship. Instead, the focus would be on product launches and brand advertising.
According to Cusinato, General Motors would continue to spend on TV and will remain involved with the Golden Globes, the Grammys and the Country Music Awards in 2009. But "these actions are related to our overall effort to reduce and focus ad/promo spending, look critically at all our promotional efforts and continue with those that offer the best return on investment," said Cusinato.
General Motors sales are down 17.7% through July, per Autodata, Woodcliff Lake, N.J., and the brand is seeking to boost liquidity by $15 billion by 2009 via a mix of spending cutbacks and job cuts. Its losses reached $15.5 billion in Q2, the third-worst dip in its illustrious, 100-year history.
Pulling out of something with such esteem and exposure is not a sound move, said Peter DeLorenzo, a former Detroit auto ad exec and publisher of the blog autoextremist.com. "The big events on TV are the only events worth spending money on," DeLorenzo said. "For GM to pull back from something like this is puzzling because the positioning is so good. GM obviously feels it is not getting enough bang for its buck."
General Motors spent $2.3 billion on U.S. ads in 2006 (not including online) but cut back to just over $2 billion in 2007, per Nielsen Monitor-Plus. The company spent $871 million on ads January-May 2008.