DETROIT General Motors today said 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 skip the Oscars -- airing in February on ABC and considered one of TV's most prominent 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 representative Kelly Cusinato told Brandweek
"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."
GM spent $13.5 million on ads for the 2008 Oscars on ABC and more than $110 million over the past 11 years, per TNS Media Intelligence.
In July, GM said it would cut and consolidate its marketing and sales budget and reconsider its investments in motor sports activities, including its Nascar sponsorship. Instead, the focus would be on product launches and brand advertising.
According to Cusinato, GM would continue to spend on TV and remains 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.
GM sales are down almost 18 percent 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 and job cuts. Its losses reached $15.5 billion in Q2, the third-worst dip in its 100-year history.
Pulling out of an event 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."
GM spent $2.3 billion on ads in 2006, but cut back to just over $2 billion in 2007, per Nielsen Monitor-Plus. The company spent $870 million on ads January-May 2008.