The plan, according to agency executives familiar with it, is very close to formation, but will not put the entire assignment in the hands of just one of the shops that currently buys GM's media. Rather, a new entity, which will be staffed by executives plucked from the GM's current shops, will be formed. "There is a significant media consolidation coming, but as we (the agencies) understand it, it will come in stages," said a senior GM agency executive. "As one stage works, we will move to the next."
"They're going to do it soon," added a top-level exec at another GM shop. "But I don't know which way they're going to go or what their ground rules are."
While the world's largest car company has been mulling media consolidation since June, details still are vague. One media executive who does business with GM said the company is leaning toward a free-standing operation similar to PentaCom, the company BBDO created to handle all Chrysler's planning and buying. Another exec said a joint venture between Lintas and McCann-Erickson could be in the offing for GM, meaning that media buying would be consolidated at Interpublic.
Unlike PenraCom, though, GM's new entity is not likely to include media planning; which would be left to the individual sales divisions and their agencies.
Both execs added that if GM and its agencies form a separate media company, Lou Sehultz, executive vp/director of media services for Lintas:USA, is the current favorite to run the unit. Schultz also serves on GM's internal Media Council and is considered one of the most powerful media execs in GM's roster of agencies. Late last week Schultz could not be reached for comment.
Guarascio told a reporter recently to "stay tuned" when asked about a GM media consolidation. He added that "an organization's change has to be driven by strategic issues." Guarascio was not available for comment.
Mike Browner, the general director of media operations at GM has said in the past that "consolidated media buying has been a longstanding media practice at General Motors for many years. And, like all business practices at General Motors, that activity is constantly undergoing review and refinement."
Browner was referring to GM's Media Council, which, unlike PentaCom, does not handle all media negotiations and buys. The Media Council--for national TV deals--receives suggested plans from GM divisions and their agencies, makes sure those plans mesh with the company's overall media objectives, and assigns one of GM's AOR shops to handle the buy. The AOR lineup includes .Lintas on sports, cable and consumer magazines; Leo Burnerr on primetime and late night; and D'Arcy Masius Benton & Bowles on news.
As was the case with PentaCom, the chief benefits to GM are lowering costs--both in media buys and in personnel.
"Lowering costs and increasing profitability is everything at the corporation right now," said the GM agency head. "So even though the divisions may not like it, if the consolidation will save significant sums they will have little choice but to go along." Ironically, GM divisional bosses were in the dark about the consolidation last week. One divisional advertising head said he hasn't heard anything official on the topic. But he adds that "something is afoot."
He said the divisions wouldn't rebel against a consolidation, as long as the divisions and their agencies retain control of media planning.
"The planning is what we're concerned with," he said. "It really doesn't make a lot of difference as long as we get the programming we want."
Copyright Adweek L.P. (1993)