Commentary

The General Faces Promotion

What do you call it when one of the world’s largest advertisers announces that it will decrease ads for media, including TV and print and reallocate the dollars? This is no joke, and there’s no punch line. At least not yet.

General Motors – one of the top-ranking brands in the world, with one of the truly behemoth ad budgets – just announced a reallocation of dollars from their TV and print advertising budgets. This is to allow them to ramp up their new strategy of spending in “grass roots” and “relationship” areas such as Internet, sponsorships and direct mail.

And why not? As big as they are, as much money as they’ve spent over the years, it’s finally hit home that what’s good for General Motors may be good for America – so long as it’s not advertising as usual. Back in 1955 when Charlie Wilson, then Chairman of GM, linked his company’s fortune with America’s, it was fairly easy to satisfy even the skeptics that GM was getting something for their ad dollars. Consumers were made aware of the brands if nothing else. About a third of them bought GM products in those days.

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But today, coddling skeptics (and shareholders) has become much more difficult, especially the part about justifying billions of dollars in advertising expenditures. People have this funny habit of asking questions. They want to know things. Well, what does GM know? Really know? They know they paid for ads to be produced. They know they paid for them to be printed or aired someplace on the hundreds of possible magazines, TV or cable channels.

That’s what they know, and that's all they really know.

But what did they really get? They presently have no way of being sure. They know they got the time or space they paid for – which presumably delivered some pre-defined audience. They have no proof that anyone actually read or saw the ad. They know they got the media invoices and affidavits of performance. But those don’t come with any guarantee that viewers didn't zap the commercial; that readers didn’t flip past their “well-placed” ad. They have no affirmation that the audience will remember them, think well of their brand or put GM cars on their “shopping list” when it’s time to buy.

So there’s a scary chance that those billions they spent returned next to nothing – certainly no provable likelihood that customers will buy what GM is selling!

If you were GM, wouldn’t you want at least some degree of accountability? I would, and I guess GM is beginning to as well, because they’re not alone in this priority shift. Another automotive giant, Toyota, has stated that the profusion of added models means “more money for marketing, less for advertising.” Translation into New Market Speak: Marketing = $$$, Advertising = ???

Traditional media aren’t the only casualties. GM is apparently turning an increasingly jaundiced eye to their incentive spending, estimated at $3.5B last year. There’s some question as to how well their 0% interest blitz boosted sales. So GM giveth and GM taketh away. They’ve taken away funds that were usually committed to traditional media.

We have often noted that ad folks typically view media vehicles as static entities, like so many statues in a museum. Media planners know the age and weight of each piece (demographics); how many visitors might wander by (reach); how many may come back again (frequency) … and are happy to leave it at that.

But they overlook the reality that any given media vehicle is vibrant, animated, a kind of life form of its own. Media vehicles are created by humans. They are developed and maintained by humans. So their values change as human values change. If advertisers spent some time actually assessing those values, they would end up with some valuable insights, and even some ROI metrics that they could take to their shareholders.

What is interesting is that niche or targeted magazines and sponsorships and direct mail seem to be the beneficiaries of the inability of traditional media to provide real ROI metrics because they possess more easily recognized and consonant values. Values that GM can apparently more easily relate to, or have their brands relate to, since they have identified them as being more akin to “relationship” building efforts than running an ad on the Super Bowl. And they are right. Well, sort of right. Because it’s not just the niche vehicles that have values they could more profitably leverage. They could do it with all vehicles – if they just had a way to identify the appropriate ones.

Advertisers could maximize their brand’s advertising effectiveness by aligning their brand’s values with any given media vehicle’s values. And here’s the gorgeous secret: it’s not even that difficult! Just add one new step into the media planning, a step that can accurately measure value dimensions that are typically left unexplored by traditional media research models. You’ll set the stage for a new era: one where you actually know what your advertising is accomplishing for you.

And even better, you’ll know the joke isn’t on you.

Robert Passikoff is founder of Brand Keys Inc. (New York), a brand and customer loyalty consultancy. He can be reached at 212-532-6028, x12, or robertp@brandkeys.com.

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