var json_comments = new Array("
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vincedia
June 23, 2009 5:33 PM
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Advertising is NOT a waste of money! It is the only way to keep business rolling in, and as much as I don't like GM and would prefer not to see their ads anymore, they need to keep what business they can if you want them to pull out of bankruptcy.

Cutting advertising when trying to survive a rough patch only leads to a larger rough patch.

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21 replies
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Uncle Billy Time!
June 23, 2009 10:57 PM
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@vincedia:
I like how so many of the replies here defend both GM and the advertising industry - as if both of these are great industries, with sensible business practices, who are just suffering from some generalized \"rough patch\" and should just soldier on the way they've always done to get through it.

GM (like much of the American auto industry) has done many things really, really wrong - why so many cars with crappy mileage, bloated dimensions, hideous designs. Why do they depend on planned obsolescence and constant turnover among car buyers, instaed of building great vehicles that last a good long time?

And don't even get me started on ad agencies. Sheesh. What a bunch of high-maintenance assholes. (I work in the industry, so I know what I'm talking about.)

Both GM and the \"suffering\" ad industry deserve a lot of what they're experiencing, so I don't really think they need any defending here.

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trixrabbit
June 23, 2009 10:06 PM
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@vincedia: @vincedia: shouldn't the hordes of gm cars disabled on the side of the road be enough advertising?!?

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IfThenElvis
June 23, 2009 10:14 PM
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@trixrabbit: The service departments at my Honda, Toyota, and Nissan dealers are always busy. Got any pix of these hordes of GMs disabled at the side of the road?

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trixrabbit
June 26, 2009 1:10 AM
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@IfThenElvis: i have no idea why i am replying to your cooment. i really don't care.


want pictures of both of my & my wife's disabled UNDER WARRANTY GM vehicles? BOTH have been in the shop at least (checking paperwork) 15 times within the past 12 month period for an issue (for 1-2 weeks at a time). we got FUCKED purchasing GM w/a warranty. we want vehciles that work; not some bullshit that someone is practicing their enginnering on. if that's the case, sell me the car for $3k. not $30k.


and by the way, douche, i said GM. not toyota, honda, and nissan.


and if you think that our dealerships here suck, come here and fix the problems. otherwise, shut the fuck up.

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WaywardSoul
June 23, 2009 7:46 PM
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@vincedia: Agreed, I think. I often complain about the rediculous advertising budgets of companies and question the true effectiveness of it. In this case, GM sold roughly 3 Million autos in 2008, and at 40 Million per month in advertising that works out to about 160 dollars per vehicle. That's a relatively insignificant portion of the cost of a vehicle, so I'm inclined to say advertise away (while doing a better job of designing and building future autos of course). Are those numbers correct though? Yes, the dollar figures are, but in reality how many purchasers were swayed to buy GM vehicles because of the advertising? One in two, in five, in ten? If even one in five and certainly if one in ten, GM could have gained more sales by using the marketing budget to build better, more reliable, more desirable autos.

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YOXIM
June 23, 2009 9:59 PM
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@WaywardSoul: Your math is making my head hurt. How does $40 million per month ($480 mil per year) divided by 3 million cars = $160 per vehicle? It's more like $160 MILLION per vehicle. Unless they're selling 3 million vehicles a month ,(which they aren't, their global total for 2008 was 8.35 million cars), I think something is very wrong.

So let's do some new math here. In 2008, GM sold 8.35 million cars WORLDWIDE. Then they went and spent $3 billion on advertising. So when you divide that, you get a total of just under $360 million per car sold

Those cars could be made of gold and they still wouldn't have brought in that kind of money. But I guess with the new advertising budget, they're doing a lot better.

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Oddfool
June 24, 2009 7:26 PM
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@YOXIM: 'So let's do some new math here. In 2008, GM sold 8.35 million cars WORLDWIDE. Then they went and spent $3 billion on advertising. So when you divide that, you get a total of just under $360 million per car sold'

Actually, that comes out to approximately $360.00 in advertising per car sold. (provided those are somewhat accurate numbers in the statistics)

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YOXIM
June 23, 2009 10:19 PM
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@YOXIM: I would like to take this opportunity to apologize to the commenter above me. It's MY math that makes my head hurt. I don't know what was wrong with me. Sorry :)

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dragonfire81
June 23, 2009 10:42 PM
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@YOXIM: You have to factor in that GM largely goes the traditional advertising route and sticks to newspapers, magazines, radio and Television primarily and doesn't think twice about dropping $2 million or whatever for a spot on the Super Bowl, the Academy Awards, you name it.

I don't know about anyone else out there but there are so many car ads on TV, I pretty much tune them all out. The point I am making here is that the effectiveness of the ads counts for a lot.

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IfThenElvis
June 23, 2009 10:08 PM
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@YOXIM:
Check your math. You are a little bit off - but only by a million.

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YOXIM
June 24, 2009 11:56 AM
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@IfThenElvis: More like a factor of a million :)


I don't know what the hell was wrong with me when I wrote that. I'm sitting there thinking \"there's no way this can be real, but the numbers don't lie\". I guess they did. I guess that's why everyone wasn't up in arms about GM dropping $160 million in advertising per car sold. Because they weren't. :)

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Radi0logy
June 23, 2009 7:59 PM
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@WaywardSoul: I guess I don't understand where the 40-50 million comes from in the article. The article above says \"$2 billion annually for the last few years\", that works out to 166 million per month, not 40 million per month. So are they cutting their advertising budget back to 40-50 million a month? Or are they continuing to spend 40-50 million per month, with the 2 billion a year figure including spending in addition to advertising?

@HiPwr: Never said that. But 2 billion a year will pay a lot of salaries... about 67000 employee's at $30,000 per year... Just think about in perspective how much cash they are blowing. Think about how much food it will put on regular folks' tables.

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Michael Belisle
June 24, 2009 1:28 AM
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@Radi0logy: Yup. I think the Consumerist is a bit confused about that. I didn't have to buy a subscription to get to a key quote:

Late last week, the fallen auto maker said it will maintain an ad budget between $40 million and $50 million a month while in bankruptcy proceedings -- much less than in years past, but about the same as in the months leading up to its June 1 bankruptcy filing.

So, yes, they did cut back. By 90%, in fact. I voted no on the survey, but every one should be satisfied that they've cut back enough.

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HiPwr
June 23, 2009 8:20 PM
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@Radi0logy: Where do you think that $2 billion went? We worried so much about the ripple effect of GM going under, what about the people whose salalries depend on GM advertising?

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Radi0logy
June 23, 2009 6:53 PM
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@vincedia: So true, at least thats what the folks in the advertising department, with their Italian leather chairs and $400 a day coke habits keep telling me.

Its funny actually - I would like to see what the advertising budget is for Google. Then re-present your argument with that fact to back it up.

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HiPwr
June 23, 2009 7:12 PM
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@Radi0logy: Comparing Google to GM is an apples to umbrellas comparison. Automobile manufacturers continuesly update their models and produce new ones. They have to get the word out to the public about their products.

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hi
June 23, 2009 7:16 PM
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@HiPwr: Google also updates their products and produces new ones.... try again.

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From the cubicle of PGibbons
June 25, 2009 9:04 PM
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@hi: Google owns a \"printing press\" and uses viral advertising too.

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Traveshamockery
June 23, 2009 7:36 PM
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@hi: Google spends all kinds of money on advertising. Google Maps, Street View, GMail, GCal, and every service they develop is a paid investment to get customers to use their \"free\" services, so they can sell their product (advertising, ironically).

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Radi0logy
June 23, 2009 7:15 PM
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@HiPwr: Yeah I keep hearing that from the advertising department. Tying yourself down in order to prevent innovation is a sure way to guarantee stagnation and bankru... er.. wait heh oops! Didn't see you there, GM.

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HiPwr
June 23, 2009 7:34 PM
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@Radi0logy: If you think GM's advertising budget drove them into bankruptcy, you are sorely mistaken.


@hi: I'm not too familiar with Google's newest features (if that is an indication of something), but it is not a fair comparison to use a search engine feature versus the new Chevy Camaro. By showing people the Camaro, people get excited about it and want to buy it.

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TouchMyMonkey
June 23, 2009 6:33 PM
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@vincedia: THIS. It's basic Marketing 101 stuff. You advertise, or people forget you exist.

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BigFoot_Pete
June 23, 2009 8:28 PM
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@HurtsSoGood:
False.

Starbucks does not and never has advertised (their pre-packaged drinks with their label are done through a different company, and you occasionally see those; ie. double shot ads) and while their business is down, it is certainly not over. They invest every dollar that would go into advertising into capital projects, like new locations. Fairly remarkable given how wide-spread they are as a company.

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From the cubicle of PGibbons
June 25, 2009 9:15 PM
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@BigFoot_Pete: Starbucks model has been to come into an area and blanket it like crazy all at once. Essentially, their store signs serve as billboards, you can't get away from them. And if people still don't get the message, they buy up and destroy better quality chains (R.I.P. Torrefazione Italia), turning their carcasses into lousy Starbucks locations too.

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Stephmo
June 23, 2009 11:08 PM
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@BigFoot_Pete: Starbucks officially sponsors a morning news show now! Not all advertising is a 30-second spot.

Not to mention the Starbucks cup was in the hands of characters on television and in movies - you think that happens for free? And do you really think that celebrities in magazines are \"accidentally\" photographed with name-brand anything? Oh, Starbucks advertises plenty.

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From the cubicle of PGibbons
June 25, 2009 9:19 PM
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@Stephmo: Morning *news* show? Hmmm, I thought they sponsored Charles Joseph \"Joe\" Scarborough's show on MSNBC.

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angelzero
June 23, 2009 9:38 PM
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@BigFoot_Pete: you're on drugs if you think Starbucks doesn't advertise. They're all over print media.

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vincedia
June 23, 2009 7:49 PM
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@HurtsSoGood:

Thank you :)

Lest we forget a article from only a few hours earlier about consumers not being loyal to brands....

[consumerist.com]

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AirIntake
June 23, 2009 6:19 PM
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@vincedia: I haven't seen a add for Heinz ketchup in years yet I still buy it. I haven't seen an add for Fancy Feast in years yet my cat still eats it. I haven't seen an add for Barq's rootbeer in years yet I still drink it. Many products stop advertising without seriously hurting their sales, because they're already well known. Everybody knows GM exists, so if they don't have something new to advertise, they shouldn't bother, especially considering they're using your money to tell you to buy them this time.

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Firethorn
June 24, 2009 5:04 PM
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@AirIntake:


Just because YOU are still buying those products doesn't mean that business won't decrease even if you retain 100% customer loyalty, just from people dying if you don't advertise enough to attract new customers.

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Hobz
June 23, 2009 7:35 PM
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@AirIntake: Heinz ketchup hasn't changed in 50 years (not forgetting the color change). If you have something new (Chevy Volt) you need to spread the word so that people know about it, so that people talk about it. Think of some of your more iconic products out there. They are usually remembered not because of the quality or value but because of some very clever advertising.

Two all beef patties, special sauce, lettuce, cheese... I didn't even Google that!

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From the cubicle of PGibbons
June 25, 2009 9:07 PM
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@Hobz: They switched from sugar to HFCS within that time. Tastes much crappier than it once did. They still manufacture ketchup in other countries that uses sugar, HUGE difference in taste.

For the price they charge, it's amazing they'd save a few fractions of a cent per bottle by making it taste much less desirable.

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B
June 23, 2009 6:29 PM
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@AirIntake: People know GM exists, but GM still needs to change their image. Building better cars can only go so far, they need to advertise to get the word out that they have cars worth purchasing.

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CompyPaq
June 23, 2009 7:39 PM
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@B: I am going to point out that one of the reasons why Ford didn't need a bail-out was because of their \"Drive One\" ad campaign. People knew Ford existed, but everyone ignored them while looking for cars. The ad campaigns brought people back into dealerships.

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Applekid
June 23, 2009 5:49 PM
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@vincedia: Surely there's some diminishing returns somewhere between $1 million and $50 million, aren't there? If it was so effective they wouldn't be in their current mess.

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HIV 2 Elway
June 23, 2009 5:53 PM
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@Applekid: You're trying to blame their current condition on one isolated variable. Rarely are things that simple.

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Applekid
June 23, 2009 7:22 PM
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@HIV 2 Elway: But, third largest advertiser behind P&G and Verizon? Is that really necessary? More advertising than CocaCola and McDonalds and Yum Brands? More than Johnson & Johnson and Disney and Walmart? More than Kraft and Anheuser-Bush and Sony?

Of course their problems aren't just too much spent on advertising, but do they really need advertising at saturation level above and beyond other huge massive advertisers just to stay viable?

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HIV 2 Elway
June 23, 2009 5:40 PM
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@vincedia: This guy knows the score. The business that quits advertising is the business that quit all together.

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redskull
June 23, 2009 5:56 PM
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@HIV 2 Elway: Yep, unless the name of your company is Coke or Microsoft, you need to keep reminding people that you're still out there.

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Xerloq
June 24, 2009 1:26 PM
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@redskull: They still advertise. Everywhere.
@AirIntake: They haven't stopped. Either 1) they advertise in media you don't consume (likely) or 2) you're so used to their ads you don't recognize them when you see them (more likely). You're exposed to thousands of ads a day, but just because you don't remember them all doesn't mean those companies aren't advertising.

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TheWillow
June 23, 2009 8:16 PM
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@redskull: Dude do you know how much money Coke spends on advertising?

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From the cubicle of PGibbons
June 25, 2009 9:10 PM
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@TheWillow:
2006: $2.6 billion
2005: $2.5 billion
2004: $2.2 billion
2003: $1.8 billion
2002: $1.7 billion
2001: $2.0 billion
2000: $1.7 billion
1999: $1.7 billion
1998: $1.6 billion
1997: $1.6 billion
1996: $1.4 billion
1995: $1.3 billion
1994: $1.1 billion
1993: $1.0 billion

...seems they could cut out a couple superbowl ads and dump HFCS.

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Triterion
June 23, 2009 5:35 PM
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@vincedia: This argument for/against advertising while a company is going under seems really familiar...

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hi
June 23, 2009 5:38 PM
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They should not be getting any money in the first place.


+ Watch video



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varro
June 23, 2009 7:54 PM
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@hi: Michele \"Cuckoo Bananas\" Bachmann shouldn't be getting any money...

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hi
June 24, 2009 2:22 PM
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@varro: @veg-o-matic:


You're posting an entertainment video VS my video of a speech on the floor of congress. Those \"so-called\" news shows are nothing more than entertainment and use \"setup questions\" which they ask a question and then give only two choices ... their view and then the crazy view. They go out of their way to make someone look crazy. If you did any research at all you would know why they do this. They do it because she is standing up to them and they want to discredit her. And unfortunatly their trick works on weak minds.

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From the cubicle of PGibbons
June 25, 2009 9:21 PM
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@hi: \"The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly - it must confine itself to a few points and repeat them over and over\"

-Joseph Goebbels

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veg-o-matic
June 25, 2009 12:46 AM
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@hi: So you're denying that Michele Bachmann said, of her own free will, that investigations should be made into whether or not members of Congress are \"Anti-American\" ...?

I just want to get this straight.

She said it. She also said this, in front of a very friendly audience:

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xthexlanternx
June 23, 2009 5:34 PM
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I want a company that I am a part owner of (as a taxpayer) to advertise so that they don't lose even more market share. Asking them to stop advertising because they went into bankruptcy is like asking someone with a broken leg to not bother going to the hospital-- both will cripple in the long run of things.

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sonneillon
June 23, 2009 7:33 PM
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@xthexlanternx: Agreed. Perhaps they could do more effective advertising but I am ok with them using money for advertising.

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BluePlastic
June 23, 2009 8:45 PM
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@sonneillon: Yeah, I'm not sure how effective this current round of advertising is. Basically it's hey, we're still here, just because we went bankrupt doesn't mean we're gone or that you shouldn't buy a car from us. C'mon back!

Nothing about any improvements in their products or anything like that. Just, hey, we went bankrupt but we're still here!

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alexcassidy
June 23, 2009 9:55 PM
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@BluePlastic: That they're bankrupt has NOTHING to do with why I'll never buy a car from them. It's the fact that I'm an unwilling part owner in their company- how 'bout they address that concern?

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JohnDeere
June 23, 2009 5:36 PM
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you gotta spend money to make money. i would be worried if they slipped another spot or two.

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calquist
June 23, 2009 5:40 PM
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If anything advertising is needed now more than ever because even I wouldn't want to buy a GM car right now.

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smartmuffin
June 23, 2009 5:42 PM
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Now that they're an official arm of the government, why should they even have to pay for advertising? Can't we get some special legislation that allows government owned industries to advertise for free? How dare those greedy capitalist media outlets put profits over the good of the nation!

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billy
June 24, 2009 7:12 PM
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@smartmuffin: Even the military pays for advertising. Mandated government advertising seems like it would violate the First Amendment.

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HiPwr
June 23, 2009 7:14 PM
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@smartmuffin: Maybe the government can just declare the advertising industry \"too big to fail\" and take it over.

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Jim Topoleski
June 23, 2009 5:47 PM
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@smartmuffin: You know in your first sentence you invalidated anything you ever have to say by uttering such rhetorical stupidity.

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Con Seannery's G1
June 23, 2009 6:32 PM
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@Jim Topoleski: You know in your first sentence you invalidated anything you ever have to say by uttering such obvious denial.

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Jim Topoleski
June 23, 2009 7:41 PM
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@Con Seannery's G1: That GM is a ARM of the government? Of course I dont have to deny it, its not even remotely true.

But I have come to expect utter republican garbage from you these days do this is just par for the course isnt it.

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Con Seannery's G1
June 24, 2009 2:35 AM
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@Jim Topoleski: It is a government owned entity. It might not be an ARM, exactly, but it's at least a fingernail.

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Trulymadlyme
June 23, 2009 5:43 PM
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Advertising is part and parcel of selling cars. But making less shitty cars should probably be the end goal of the bankruptcy.

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From the cubicle of PGibbons
June 25, 2009 9:24 PM
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@Trulymadlyme: From the level of SUVs, Hummers and trucks GM was pumping out, maybe they should start with learning how to MAKE a car.

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TheGuinnessTooth
June 23, 2009 8:38 PM
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@Trulymadlyme: They've already succeed in making less shitty cars, their new goals is making people forget about all the shitty cars they made in the past.

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Chmeeee
June 23, 2009 6:01 PM
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@Trulymadlyme: Actually their latest crop of cars are pretty damn good. See all Cadillacs, Pontiac G8, Chevy Malibu, Saturn Sky, etc etc.

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gqcarrick
June 23, 2009 5:45 PM
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The more I see GM advertising the more I think of all the money that we as taxpayers are flushing down the drain to support them. The only GM cars I would ever buy would be a Cadillac or a Corvette, and even then thats pretty iffy.

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Unsolicited Advice
June 23, 2009 5:46 PM
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They should advertise. And they should evaluate the efficacy and necessity of the nation's second-largest ad budget.

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3 replies
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craptastico
June 23, 2009 6:03 PM
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@Unsolicited Advice: i was reading this and my first thought was that i can't come up with the names of any new GM models that've come out over the last few years. I know they relaunched the Camaro, but that's about it. Maybe GM should learn to advertise more effectively.

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Unsolicited Advice
June 23, 2009 6:26 PM
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@craptastico:


What's amazing to me is that the context is always \"should they or shouldn't they spend this?!\" Advertising isn't evil. It can be stupid, but it isn't evil. GM has been inarguably stupid with its advertising expenditures - a real company evaluates the effectiveness of its behaviors.

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HiPwr
June 23, 2009 9:03 PM
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@Unsolicited Advice: I also think the wording of the poll is a little weird. They are advertising to reassure us?

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PsiCop
June 23, 2009 5:50 PM
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I'm not sure they have much choice. At the moment there are probably people who think that GM is not just working through a government-guided bankruptcy, but is going out of business. Having been a ubiquitous advertiser in the past, if their ads were to disappear completely, it would only add to the appearance that GM is vanishing.

If they want to keep getting business, and if they want to have a company after the bankruptcy is over, given these factors, they almost have no choice but to keep advertising.

Granted, I'd like them to pare down their ad buying — by a lot — but for them to \"run silent\" is just not a great idea. It certainly would not help them in the long run ... it might force them to come back, and beg for more government funding.

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hypnotik_jello
June 23, 2009 5:51 PM
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@vincedia: really? what happened to building a quality product?

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MaytagRepairman
June 23, 2009 5:55 PM
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My last 3 cars have been Hondas but I've been seeing photos of the new 2010 Buick Lacrosse and it looks really good. I would be advertising that car like mad.

An another front, the 2010 Ford Taurus looks really good too (once again have only seen photos).

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Jim Topoleski
June 23, 2009 7:42 PM
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@MaytagRepairman: Just think, that LaCrosse was a Saturn too before GM decided to sell them off and take all of the cars they where to get.

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Cant_stop_the_rock
June 23, 2009 6:06 PM
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@MaytagRepairman:
Buicks also have reliability stats up there with Toyota and Honda. Buicks have the stigma of being cars for old people, but I'd buy a Buick.

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Con Seannery's G1
June 23, 2009 6:34 PM
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@Cant_stop_the_rock: I drive a Buick...entering its second decade of service, still running strong.

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Radi0logy
June 23, 2009 6:56 PM
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@Con Seannery's G1: How many new engines has it needed to \"still run strong\"?

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CommanderLogjam
June 23, 2009 6:02 PM
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I think continuing to advertise is the right thing to do.

I remember back 20+ years ago when Lee Iacocca played a prominent role in Chrysler and Dodge commercials at a time when the auto industry was struggling. I found his message to be very reassuring.

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From the cubicle of PGibbons
June 25, 2009 9:26 PM
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@CommanderLogjam: I found those K-cars that resulted to be royal crap. The only reason people and government bought them was because we were all now stockholders. There's a reason that seeing even one of them on the road now is an extreme rarity, while 1970's and 1980's Toyotas and Hondas are still fairly commonplace.

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bobpence
June 23, 2009 6:02 PM
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They should be advertising and focusing on selling cars, not selling the bailout.


I worked for a store chain that eventually went bankrupt, but before they did cut way back on their advertising. It was like a patient who is bleeding to death pulling out an IV blood line because the needle represented a point of blood loss.

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BigFoot_Pete
June 23, 2009 6:04 PM
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Does this mean that GM can restructure its contract with the UAW? I would think that would help costs quite a bit.

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bobert
June 23, 2009 6:05 PM
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If GM were to stop advertising, the probability it would fold rather than recover is 100%.

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bmorg003
June 23, 2009 6:25 PM
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@bobert: I don't think an inadequate advertising budget got them in this mess, and simply more advertising will not get them out of it. Talk is cheap! Build a good, affordable, reliable, energy efficient vehicle (something that might give car buyers reason to think you've actually changed your image) and then worry about the advertising budget.

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Mr4Runner
June 23, 2009 6:07 PM
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You never cut your ad budget during tough times.

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IfThenElvis
June 23, 2009 6:08 PM
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Advertising is essential to sales and getting GM back on it's feet. If GM is not allowed to advertise then they are dead in the water. Chapter 11 lets them continue to operate - including advertising - while they try to dig themselves out of the hole and become a viable operation.

I'm more optimistic than most and doubt that we will lose the GM & Chrysler names.

I was in both Honda and Chrysler showrooms this week. Surprisingly both were very busy with customers. Due to a factory shutdown earlier this year Chrysler dealers are depleting their inventory and have few options in stock for customers to choose from - until the 2010 models come out at the end of the summer.

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JonThomasDesigns
June 23, 2009 6:10 PM
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I hate to say .. but i think it is to late .. American Car companies have put out for the most part, a boring product my entire life .. And anything i would want is way out of my range (Ford GT , Corvette ZR1 etc..) Not saying i can afford a foreign supercar but i can get a pretty sweet Japanese car for a decent price ..

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kepler11
June 23, 2009 6:12 PM
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They don't need any more advertising that trumpets the old failed taglines. They need advertising that makes people believe they make better cars. Better than Toyota or Honda. Because given two equally well made cars by GM and Toyota, I will buy the Toyota. Only a better car made by GM will get my money. An equal car will not.

Why?

It would be helpful if

1) they didn't make cars where the dashboard looks like it was designed by a kindergartener. That has been my main criticism, regardless of how good their engines/bodies have been -- the dashboard feels plasticky and cheap. Just copy BMW if you can't design it yourself, at least.
2) how about an accelerator response that doesn't feel like a wet paper bag? You know the difference between a German pedal and a US one. Floppy, floppy, floppy. and the sound is completely different. It doesn't just look cheap, it feels cheap.

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HiPwr
June 23, 2009 8:37 PM
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@kepler11: Maybe their next series of TV advertisements should feature nothing more than the dashboards of their newest models to lure you into their showrooms.

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Thor Johnson
June 24, 2009 2:52 PM
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@HiPwr: You know... that might be a helpful change from \"we make cars.\"; similar to Ford's \"Drive One\" campaign.


The Camaro, Truck, Malibu (err... if that's \"the [only] standard of quality\"), and Corvette, I don't know what's out there.


Lots of \"Coming\" stuff, but...

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tailstoo
June 23, 2009 6:15 PM
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Advertising is important, but how about making non-crappy ads? Chapter One, really??? Who cares about that. Tell people why they should buy your product. None of this feel good nonsense. People don't care about getting down to business - they want to know why they should buy a GM over the Hondas, Toyotas, Fords, etc.

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From the cubicle of PGibbons
June 25, 2009 9:31 PM
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@tailstoo: Makes you wonder about all those joint ventures that the American automakers did with the Japanese ones back in the '80s. Seems the only wisdom the American companies learned was to play with their paint colors. Why not make their engineers DRIVE the better competition and make some notes about what they could improve? Hire away a few Japanese and European engineers. Why can't American car companies build anything that doesn't feel and drive like a tugboat - and also approximate the size?

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44 in a Row
June 23, 2009 6:20 PM
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There was an article on a very similar topic a couple months ago in The New Yorker.

[www.newyorker.com]

For those who don't want to read the whole thing:

Numerous studies have shown that companies that keep spending on acquisition, advertising, and R. & D. during recessions do significantly better than those which make big cuts. In 1927, the economist Roland Vaile found that firms that kept ad spending stable or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn't. A study of advertising during the 1981-82 recession found that sales at firms that increased advertising or held steady grew precipitously in the next three years, compared with only slight increases at firms that had slashed their budgets. And a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D., and ad budgets, while companies at the bottom of the pile had reduced them.

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Quake 'n' Shake
June 23, 2009 7:50 PM
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@44 in a Row: Thanks for the link. Seems fairly obvious that if a company needs to sell more product, advertising is a way to achieve that. When in bankruptcy, without intending to liquidate, doing things that will diminish sales isn't a sound strategy.

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angelzero
June 23, 2009 7:20 PM
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@44 in a Row: keeping ad budgets steady or even increasing them while your competition is pulling back and cutting costs is a good way to get on top of the pile.

Seems pretty common sense, to be honest. Glad there was a study done to back it up, though.

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BeerManMike
June 23, 2009 6:20 PM
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Yea, because i shop at amazon.com and newegg.com because they advertise SO much. Not because of their steller service, outstanding prices, fast shipping. Hell, i got a 2010 camaro in my driveway because i saw that GM commercial... i mean transformers 2 trailer.. now im just waiting for megan fox to come over and \"do me\" cause i bought one.

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Eyebrows McGee (now with more baby!)
June 23, 2009 6:22 PM
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\"GM had been our nation's second-largest advertiser - behind only Procter & Gamble.\"

Wow -- WHY? P&G advertises thousands of products, many of which are bought on a monthly basis. GM advertises far fewer, people buy them only every few years, and GM is like, \"Here's a car. Here's another car. Here's a car ad you're going to want to stab your television over when you see it the 5,000th time.\"

That blows my mind that they were SECOND in advertising.

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Michael Belisle
June 24, 2009 1:21 AM
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@Eyebrows McGee (now with more baby!): GM was in the top 5 (probably, I did spot check) of the Fortune 500 for over 50 years, right up until 2009, when they dropped to #6. You think being one of the largest companies in the country for at least half a century had nothing to do with also having one of the largest advertising budgets of any company?

In a market like cars where, yes, they are under constant attack from other companies foreign and domestic, mindshare is key.

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Eyebrows McGee (now with more baby!)
June 24, 2009 2:10 PM
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@Michael Belisle: But their ads suck, they have no mindshare. I can hardly think of half their brands, I can't think of any models of theirs, and I pay ATTENTION to car crap because my husband is a car guy.

So, yes, it BLOWS MY MIND that they had a #2 ad budget when their advertising was craptastic.

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vastrightwing
June 23, 2009 6:54 PM
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@Eyebrows McGee (now with more baby!): I think they had to spend more because the hype was much better than reality. Ever notice that people and companies start yelling how great and wonderful they are when reality is the opposite? The more I hear how great something is, the more suspicious I get.


If something is really great, you don't have to advertise that much.

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Jim Topoleski
June 23, 2009 7:49 PM
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@vastrightwing: hogwash. You know nothing about advertising.

The more expensive a \"luxury\" item is, the MORE you have to advertise.

New cars are luxury items, they require a LOT of though for people to commit to. Because of this they require a LOT of money to sell people on their virtues.

And not for nothing, but GMs product was good, and often significantly cheaper to buy, maintain, and repair than Honda or Toyota.

But its amazing what happens when you have people outright lie about something being bad enough. The dumb public believes it.

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Eyebrows McGee (now with more baby!)
June 23, 2009 8:11 PM
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@Jim Topoleski: \"The more expensive a \"luxury\" item is, the MORE you have to advertise.\"

Only if it's a fake luxury item. How often do you see Ferrari adverts? True luxury items DON'T advertise; they're too exclusive to dilute their cache that way. The stuff that's advertised is \"aspirational,\" not luxury.

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Jim Topoleski
June 23, 2009 9:51 PM
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@Eyebrows McGee (now with more baby!): Oh trust me Ferrari advertises, just not to the lowly peons. And they spend a awful lot more for the few ads they buy.

But unlike a near lux car they do more than ads. Its not uncommon to if your income is high enough be invited to exclusive dinners to show off a Ferrari or like car.

But also take into account that up until recently GM was HUGE, bigger than any other car manufacturer in the world. EACH brand gets ad money, and its that money lumped together thats GMs ad budget.

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Jim Topoleski
June 23, 2009 9:53 PM
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@Jim Topoleski: and yes I am speaking from experience, though my income is no where near high enough to be personally invited to one of these dinners.

But I HAVE been to one hosted by Maybach.

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B
June 23, 2009 6:47 PM
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@Eyebrows McGee (now with more baby!): People (hopefully) spend a lot more time thinking about a car purchase than a toothpaste purchase, so on a per unit basis, GM requires a lot more advertising than P&G.

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Saboth
June 23, 2009 6:25 PM
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I went to my local GM dealer's website today to see if they had any deals on cars I would want to purchase. Nope. No deals, and no cars I'd want to purchase. Well maybe a corvette or caddy, but I'm in the market for under 20k.

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Trulymadlyme
June 23, 2009 9:42 PM
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@Saboth: Get a camry. I got a brand new '09 for 17200 plus taxes and tages. There are some killer rebates out there.

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sir_pantsalot
June 23, 2009 6:30 PM
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If they are going to advertise then they should advertise with short inexpensive commercials or other cheap media. They should tell consumers in their advertisements that they will no longer have cars made of parts that contain cheap plastic components at crucial locations. If I knew that I would not have to spend $250+ to replace a single part just because some tiny piece of plastic broke then I might someday in the future visit a GM dealer.

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vastrightwing
June 23, 2009 6:49 PM
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If GM is trying to advertise cars, then the ads are all wrong. GM is actually in the stock price market. GM is like the old .COM companies: there was nothing but hype and an implied promise. The ads should be directed towards the investors trying to pump up the stock price. Forget the cars. My bet is that GM is not going to change anything except try to pretend they're in the car business with more vigor.

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webwbr
June 23, 2009 6:59 PM
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Don't advertise until you make a product that people actually might want to buy. Until you've got that, your wasting your (er, I mean our) money.

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Saboth
June 23, 2009 7:09 PM
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@webwbr: I'm firmly convinced the only people that buy cars like GM's (Aveo in particular) are people with absolutely no clue about cars, or perhaps people that stay with a brand of car all of their lives. There are numerous cars for the same price that offers 2x the performance, reliability and resale value (Honda Fit, Ford Focus, Mazda 3, Hyundai...the list goes on and on).

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S-the-K
June 23, 2009 7:03 PM
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I agree with Chairman O. If AIG can't spend money to drum up business then neither should Government Motors (GM). We shouldn't let AIG and GM, use taxpayer money to try to drum up business so they can pay back the taxpayer. Once they take taxpayer money, advertising should stop and their business be run into the ground due to reduced business so they can't pay back the taxpayer. Sheesh! You'd think we were investing in a business and not locking people on the welfare plantation.

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carlos_the_dwarf
June 23, 2009 7:11 PM
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@S-the-K:

Um, they're never going to pay back the taxpayer. The $50 billion in loans floated to these bloated dinosaurs in late '08 and 09 have already been forgiven and will never be repaid. Just like anyone with an ounce of sense knew they wouldn't.

GM, Chrysler and the UAW can go to hell.

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H3ion
June 23, 2009 7:08 PM
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If they were liquidating under Chapter 7, then I agree that spending money on advertising (other than a going out of business sale) is a waste of money. But the fact is that they're in a Chapter 11 which means that they intend to get back into regular business. Since advertising is such a critical part of automobile marketing, I'd expect them to maintain their advertising budget. BTW, GM and other car companies tend to do very expensive advertising buys, such as the Super Bowl, because that's where their market is. That's probably a factor in the amount they're reported to spend.

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twerp
June 23, 2009 7:23 PM
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there is a way of advertising that doesn't cost a small fortune. Keep it simple and lower the bling factor.

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Baccus83
June 23, 2009 7:23 PM
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I know several people working on GM ads. If GM stopped advertising, they'd be out of work. So in short - no, I don't think GM should stop advertising.

If anything, they need to advertise more. If you have a brand image problem, you need to do everything in your power to help yourself out. Advertising is the most immediate way to help yourself out.

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Saboth
June 23, 2009 7:42 PM
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@Gene Gemperline:

Well that and making cars that aren't junk. Just have to look at JD Powers, Consumer Reports and word of mouth to realize besides Malibu, GM doesn't make anything worth buying. (Well honestly if they cut prices about 25%, I'd consider them, but currently their prices come too close to better made foreign cars that actually hold their resale value). I don't envy your friends that have to try and come up with ads to convince consumers that GM is anything but dead last in the car wars.

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Traveshamockery
June 23, 2009 7:24 PM
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It's so cute to watch people insist that they're not affected by advertising, and that advertising isn't required for companies to survive and thrive.

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varro
June 23, 2009 7:54 PM
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Yes - GM should be advertising as much as before, and possibly more, although they should tailor their ad campaign to focus on weaknesses in their reputation.

Example: the Malibu is a *great* car, as reliable as an Accord or Camry, but no one knows it.

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I Love New Jersey
June 23, 2009 8:00 PM
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Well they are help bailing out the ad industry.

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veg-o-matic
June 23, 2009 8:02 PM
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@hi: Uhh.. using her to make your point is.. less than effective.

She's crazy, you know.

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vastrightwing
June 23, 2009 8:08 PM
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Their ad spending is too big to fail ...I mean it would wreck the ad industry if they cut back spending.

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Squeezer99
June 23, 2009 8:42 PM
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i think GM should change their name to Generic Motors or Government Motors. because they use a few engines across so many product lines (generic) or because they are mostly government owned now.

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IfThenElvis
June 23, 2009 9:31 PM
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@Squeezer99: \"i think GM should change their name to Generic Motors or Government Motors. because they use a few engines across so many product lines \"

Japanese car companies do the same thing - share engines across product lines. Honda's V6 J35 engine was used in the Odyssey, Pilot, Ridgeline, MDX, Acura RL, 2007 Acura TL Type-S, and Saturn Vue. Toyota's AR engine is used in the RAV4, Highlander, Venza, and Camry.

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Thor Johnson
June 24, 2009 3:04 PM
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@IfThenElvis:
I friggin agree... the LS / LT series are great engines. Now if only they would stop doing stupid things like putting tees in their radiator lines (causing a radiator hose to go from $30 to $150)...


I thought they were beginning to do something right when they started differentiating brands (Pontiac=RWD, sports / GMC = Trucks / Caddy=Luxury), but they blew a gasket and blended everything together again.


Really, for advertising, you couldn't have beaten what Saturn was doing at its inception. I haven't seen devotion like that except from Harley riders. But they blew the grassroots stuff and devoted everything to \"professional\" advertisers that make things that no one remembers.... how much would a \"Roving BBQ / Autocross\" that goes from dealership to dealership cost?

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axiomatic
June 23, 2009 9:09 PM
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I'm not saying that they should stop advertising. But damn... build a car that is WORTH MARKETING before doing said marketing.

I think there is a \"lipstick on a pig\" comment in there somewhere... talk amongst yourselves...

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JiminyChristmas
June 23, 2009 10:42 PM
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Cutting ad budgets, and marketing efforts in general for that matter, does not make a great deal of business sense in this economy. The same number of car makers is chasing a much smaller pool of car buyers. The sellers need advertising to attract and retain customers no less than they ever did.


It's really no different in other sectors of the economy. In my own line of work not only is there less business in general, but we are facing more competition as other firms look for work outside their traditional client base. I see it from other sides as well. Jobs where we used to have trouble attracting three bidders are now getting eight or more. So, it goes without saying, we haven't cut our marketing department one bit.


Likewise, companies that can get through the economic slump without going into absolute survival mode are going to be very well positioned to grow quickly again once the economy comes back. Once you've lost market share or clients they are very difficult to get back.

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Sollus
June 23, 2009 11:45 PM
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No, you don't cut back on advertising while the economy is in a recession. It's stupid business sense not to and it's irrelevant that they are in bankruptcy when considering this issue. That's Economics/marketing 101.

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AlisaTurco
June 24, 2009 2:31 AM
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I work on their advertising. That batch of ads they did early this year with just the cars lined up in a warehouse...YEAH, THE AD EXECS DIDNT KNOW WHAT TO DO. They literally sat behind our artist and AFTER they had shot the cars, were trying to sort out the dialogue to sell the cars. They have no clue what they're doing. They're shooting footage, and demanding the ad be on air within 48 hours because they're scrambling. And if they're spending $40-50 million a month on advertising, I'll let my boss know we should be charging more!!!!

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Baccus83
June 24, 2009 2:53 AM
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It's all well and good for people to say \"just invest in making better automobiles.\" Well of COURSE they're doing that now! But to suggest that they should be spending less on advertising is borderline idiotic. GM has an image problem right now, and the best thing you can do in the short term is to advertise like there's no tomorrow. You have to get people's faith in you back. It's going to take GM some time to create a better product, and I'm sure they're trying. But in the meantime they can't just drop off the face of the earth. That's why their latest ad campaign is centered around \"Reinvention.\" They need to reassure people that they're changing.

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jamar0303
June 24, 2009 3:05 AM
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I should also note that among other things, GM is going to have their own beepin' pavilion at the World Expo. Yeah, they have better places to spend their money than that.

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zibby
June 24, 2009 11:51 AM
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Yeah, sure, stop advertising. You know how they could save even more money? By not making vehicles of any sort.

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MinorAnnoyance
June 24, 2009 3:48 PM
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Our advertising industry=the classic example of the tail wagging the dog.

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PLATTWORX
June 24, 2009 4:01 PM
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If they want to stay in business and compete against Honda, Ford, Toyota, etc. cutting back or stopping advertising would be a DISASTER.


A recent survey by Ad-ology Research showed \"More than 48% of US adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates that the business is likely struggling.\"


Can the Consumerist keep that in mind when bashing a struggling company for running ads with their money?

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mnicolson
June 24, 2009 5:04 PM
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General Motors advertising is like most of their products - unimaginative and boring.

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Steven Dale Schmitt
June 25, 2009 3:33 PM
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quality products sell themselves. marketing = advertising, and is most often used to persuade and influence using emotional tactics rather that make the buyer aware of the factual costs, risks and benefits of one product over another.

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