• by Paul Gough , June 24, 2003

The head of GM's advertising said Tuesday afternoon that it was "absolute absurdity" to think big advertisers are going to continue to pay steep increases in television's upfront for declining audiences.

C.J. Fraleigh, executive director of advertising and corporate marketing at GM, told about 400 agency and content providers at Ad Watch: Outlook 2003 that the old ways aren't going to work much longer.

While he understood the motives, Fraleigh said the networks were reaping short-term gains that ultimately won't help their clients or, eventually, themselves. "They're not providing business solutions like they used to," he said. Fraleigh outlined the history of GM, which found unparalleled success for more than three decades of turning out cars. But with so much success came "myopia" and a downward spiral from which the company took years to recover.

"Myopia happens when companies are more concerned the short-term than satisfying your ultimate customers," Fraleigh said. "Believe me, we know that once you lose customers, it's awfully hard to get them back."

Fraleigh, whose company spends $3 billion on advertising annually and another $17 billion a year in incentive programs, said that ad agencies and media outlets were risking the same fate as GM in the 1970s. He said that they had strayed far from the creative and innovative days of big ad giants like David Ogilvy and Bill Berenbach, who created innovative ideas for brands that caught fire.

"We've got billions of dollars to spend [on advertising]," Fraleigh said. "We're lacking enough great ideas."

For those companies who aren't innovative, Fraleigh counseled: "You've got to get there. You have to get there soon."

Raleigh pointed to some of GM's recent initiatives, including the Auto Show in Motion that drew 10,000 non-GM customers who compared automobiles in a non-pressure atmosphere, and the Test Drive program that allows shoppers to bring home a GM car overnight. The Test Drive program had a $15 million advertising component that went to media outlets like CBS, Fox, A&E and print. But Fraleigh noted: "That $15 million was significantly dwarfed by all the other components" of the marketing plan. He said GM was moving several hundred million dollars of incremental marketing funds to things other than traditional advertising and agencies and outlets are losing out if they don't start coming up with innovative plans.

"And we're just one client," Fraleigh said, noting that other big advertisers were following the same path as GM. "There are a lot of people out there looking for attractive alternatives."

As examples, he drew from both GM and its competitors. He pointed to BMW Films, the Mini Cooper print ads with cutouts and pop-ups as well as recent Hummer advertising and Cadillac's placement in the Matrix Reloaded.