Q: Does GM's media agency consolidation signal a major shift in its approach to marketing?
A: No, but it is going to create some efficiencies and a better structure. A big part of the buying review addressed two areas of our media buying that we thought were less than optimal. One area was local broadcast buying. Our local buying unit services over 7,000 local dealers, and it involves thousands of local broadcast buys each quarter, so it's a huge operation. We had too many touch points with the dealers, and it just wasn't as streamlined as it could be.
What was the other key area?
The new media space. The nontraditional area has evolved and grown quickly, and we just had a great deal of overlap between our planning units and our buying units—and even some of our creative agencies as well, such as Digitas. Local television is also quickly venturing into new areas, particularly interactive capabilities, and our dealers want to be engaged in that new space. We want to facilitate that hopefully in a very turnkey way for them.
So having the planning and buying functions at separate shops was a problem?
It became an issue over time, because we had local marketing groups that were saying we've got planning people at Planworks, buyers at LCI [a unit of IPG's Universal McCann that handled GM's local buying] and client service people at Mediaworks—and what happened to the old days when I just had my media person take care of me? So the system became a bit cumbersome.
Any other consolidation benefits?
Yes, there will be a more direct link between local and national buying. National broadcast buyers will be colocated in New York with the local buyers, which is important because we want to drive better integration in our buying from national to local.
GM cut back on its spending in the upfront this spring. Why?
We shifted more dollars into the new-media space. Our overall spending was not dramatically off from last year.
OK, so spending is off a little, but primarily money is beng shifted from broadcast TV to new media?
New media and Olympic sponsorship.
How will GM's media mix change over the next couple of years?
We will continue to ramp up in all areas of new media, and I think the video-on-demand space is going to have the largest increase, because the scale of the VOD offerings from cable companies is going to grow enormously.
You've been testing VOD applications for a couple of years now. How will it evolve?
Very much like the third-party sites on the Internet, like Kelley Blue Book. In the early days, very few consumers used the Internet for vehicle shopping. Now most consumers go to the Internet before they go to a dealership. And I think in the future most customers will use VOD, because instead of sitting at a small desk with a small screen, they will be able sit in the family room with a large screen with big, bold shots of the vehicles they are researching.
So VOD will supplant the Internet as the core research vehicle for car shopping?
That's what we see happening, and we're seeing many of these third-party Internet suppliers rapidly trying to find their place in this new VOD space.
How quickly will VOD become a mature part of the media mix?
I'm guessing 18 to 24 months.
Will video in some form remain the core of your ad strategy?
All of the testing we have done suggests there is an advantage to sight, sound and motion. But video is no longer contained just in a television commercial. So we look at video as an asset that we can deploy over various platforms.
How translatable is the traditional 30-second spot to the newer media applications?
In many cases, less or more is better. The video-on-demand space is a great environment to take longer-form video. And car shoppers will engage longer-form content because it is such a considered purchase. With Cadillac, we're running some 5-second videos on the Web. In that environment, you don't want to distract consumers from their destination.
How important is branded entertainment in the GM media mix? Where have you achieved the greatest success in this area?
We think it is very important. The most successful to date was the Pontiac Solstice launch on The Apprentice this season. The Solstice had an Internet pre-order program, and they took 1,000 orders in 40 minutes.
Sight unseen and without a test drive?
Yes. At the end of the show was special creative offering consumers the opportunity to pre-order the vehicle before its actual availability. It's the first time we've sold that many cars sight unseen in such a short period of time. The Solstice will just start appearing at some dealerships this week.
What's the next big product integration?
You will see our brands on the new The Apprentice: Martha Stewart this fall. Buick will appear in one episode. We'll continue to work on other product integrations that I can't talk about right now.
How worrisome are ad-skipping devices like TiVo? Have you tried to measure how many viewers actually watch the ads you put on TV?
I don't want to quote the numbers from our own research, but what we have learned is there are certain types of programs that consumers are very likely to TiVo, such as weekly dramas and sitcoms. Other types of shows, such as live sports and events like the Academy Awards, are ones that consumers want to watch as they happen. So we're trying to understand where consumers are finding value in traditional television.
So you'll be buying fewer spots in the more highly TiVo-ed shows like dramas and sitcoms?
Yes, it makes sense for us to balance our schedules in ways that are less likely to have our commercials avoided when we're running in traditional commercial television.
So part of the solution is more live programming. Is cross-platform advertising more effective in getting messages across?
Yes, and it's still evolving. We sponsor many large events like the Olympics, the Grammys, the Academy Awards, ESPYs and Emmys. We think that's a good thing given our earlier discussion on TiVo. It used to be that we'd buy six units on TV and that was our sponsorship. Now we will sponsor day-of, day-prior or day-after applications across the Web. There will be wireless applications. We take the video assets and re-deploy them among different platforms.
A recent Association of National Advertisers study concluded that most companies don't have adequate tools in place to properly measure the effectiveness of their ad spending. How does GM define and measure ROI, and are you there yet?
We're not there yet. And I don't think you'll find any company who is completely satisfied with where they are, but we're putting a lot of time and energy into this ROI work, and I've got to tell you, it is extremely difficult in this category.
Unlike a packaged-goods company that can advertise this week and measure grocery store sales next week, we don't have that luxury because of the length of the purchase decision cycle. If we run an ad this week, we're affecting people who are in the market next week, but also people who are six months from purchase. That makes it much more difficult to get at that ROI question.
Starcom made a groundbreaking upfront deal with Court TV, which not only guaranteed reach and frequency levels, but engagement levels as well. Will that become the standard?
It's going to take some time because of questions about the quality of the ratings information and about how many people are watching television at the time the commercials run. To take that to the next level and get a read on engagement is where all marketers would like to get, but it will be a challenge.