GM betting on bump in advertising dollars
Bloomberg News. Tribune auto reporter Jim Mateja contributed to this story
Published May 14, 2005
DETROIT -- General Motors Corp. said Friday that it will "significantly" increase advertising spending this year as it tries to revive flagging U.S. sales.
Spending will rise 10 percent or more on new-model advertising, and GM will triple the number of months it runs commercials for the Hummer H3 sport-utility vehicle, a redesigned Chevrolet Impala sedan and other vehicles when they are introduced this year, said Mark LaNeve, GM's new head of North American sales and marketing.
LaNeve wouldn't give specific spending amounts. GM spent about $2.8 billion in advertising last year, an 18 percent increase from 2003, according to TNS Media Intelligence, which estimates ad spending by U.S. companies.
TNS said GM is the nation's second-largest corporate advertiser, behind Procter & Gamble Co.
"A big part of our business is momentum, and right now we're trying to seek momentum," said LaNeve.
While spokesman Tom Kowaleski said GM doesn't reveal the amount of money it spends on advertising, the automaker also will increase its budget to promote the Chevrolet Suburban and similar large SUVs, after sales of those models fell last year and in the first four months of 2005.
U.S. sales fell 4.9 percent through April, and GM's market share dropped 1.7 points, to 25.6 percent.
"How much further can they go in terms of pricing?" said Frank Ursomarso, a Wilmington, Del., Pontiac GMC dealer who has known LaNeve for 20 years. "The basic issue is, customers are voting with their feet, and they're buying imported rather than domestic vehicles."
As the year progresses, and the company introduces more new models, such as the Chevrolet HHR SUV and Cadillac DTS sedan, GM plans to shift more to advertising that promotes the lower prices and the content of the vehicles, with less emphasis on incentives.
In a recent interview, Brent Dewar, vice president of advertising for GM, told the Tribune that the automaker will try to move away from promoting incentives to promoting vehicle features.
"When you sell incentives, your advertising spends the time explaining the incentive," Dewar said. "The features of the vehicle, such as power adjustable pedals, are lost in your message. It's time to tell the product story rather than only selling the deal."
GM also will do more to directly challenge Toyota in its marketing.
Kowaleski said GM will boost advertising spending "in markets where we are currently underperforming and our market share is less than what we feel it should be, such as Los Angeles, New York and Miami, because our voice hasn't been loud enough."
"When we feel our vehicles have advantages over the competition, we will be very open and point the advantages out, whether its versus Toyota or another brand," he said.
For example, a recent TV commercial that aired in South Bend, Ind., and other areas of the U.S. for a GMC Sierra pickup compares engine power, fuel economy and towing power with the performance of the Toyota Tundra pickup. GM typically compares its vehicles with Ford Motor Co. or DaimlerChrysler AG's Dodge brands.
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