• by Karl Greenberg , December 11, 2008

Every one of the top ten automakers has cut advertising spend in the first nine months of this year, in an effort to reef sails in the current economic storm. The exception--ironically--is General Motors, one of the three Detroit automakers looking to secure a bridge loan from Congress ASAP.

The New York-based firm says that General Motors is, in fact, the only automaker among the top-ten list of ad spenders. Toyota and Ford are number 11 and 12, respectively. Per TNS, GM hiked ad spending by 15.7% to $1.6 billion, and reallocated budgets away from light trucks and toward passenger cars.

By contrast, Ford's ad spend dropped 33% in the first nine months; Toyota's dropped 7%; Chrysler cut its media spend by 33%; and Nissan cut its ad spend by 12%. Only Honda increased spending, by 4%.

General Motors has been running promotions since August to boost sales--including employees pricing and 0% loans--and held an early launch for its year-end "Red Tag Sale" program, introduced in 2005.

The company has also run corporate campaigns this year such as "Dear Oil," dealing with oil prices and the fuel efficiency of GM vehicles, a multi-tiered fuel-efficiency campaign for Chevrolet.

A GM spokesperson says that spend also reflects GM's sponsorship of the summer Olympics, and to a lesser extent the launch of the new Chevy Traverse crossover. "We never comment on TNS numbers except to say they are often off from our actual spending and easily swayed by launch products, retail campaigns, etc., that fall within a particular time of year. Overall, our marketing/ad budget has been reduced--we announced cuts in July and have made further reductions since then. Some of these spending cuts impacted in 2008 and others continue into 2009," she says.

Although GM did see a boost in October sales and market share when it introduced a Red Tag deal, it has done nothing else. After getting traction in October, when few other automakers were offering deals, November saw sales drop by 41%. Year-to-date, sales are off about 22%. Ford's sales were off 30% last month and 19.7% year-to-date. Chrysler LLC sales were off 47% in the most recent month and 28% year-to-date.

George Magliano, head of auto industry analysis at Global Insight, says GM has no choice. "I don't know how it looks to Congress, but you have to sell the cars and trucks, and you have to sell them one way or the other," he says. "The business has to go on, and you have to do things to keep it rolling."

Says the spokesperson: "We do still need to advertise our products in order to sell them--especially in the current and very challenging business environment, but we are carefully evaluating where we spend our money to ensure we reduce spending and get the best ROI for the cost of any media buy."

TNS says the top 10 advertisers spent $12.83 billion in the first nine months, a 0.2% decrease versus the period last year. Among the top 50 companies representing a third of total ad outlay, spending fell by 2.1%.

The largest advertiser, Procter & Gamble reduced spend by 5.9% to around $2.3 billion in the first three quarters this year.