GM’s Marketing Woes Worsen

A recent Ad Age article likens marketing at General Motors to stuffing towels into the bow of the Titanic.

Last week the troubled automaker reduced its marketing and communications staff 20% -- an estimated 60 to 80 people -- as part of a wider 1,600-person reduction, and Automotive News is reporting that GM will announce this week that it's going to close Pontiac. Another brand slated for disposal, Saturn, is spending what appears to be millions on regional ads themed "We're still here," yet sales for the brand sunk 62% in the first quarter, and it seems unlikely consumers are putting too much store by Saturn's reassurances, given that everyone is anticipating the marque's demise.

According to GM, its similarly consumer-soothing "Total Confidence" campaign, which protects consumers for up to nine car payments up to $500 monthly in case of job loss, has raised traffic to dealerships. But so far, it hasn't converted that traffic into sales.

On top of all that, while GM intends to participate in the network TV upfront next month, when marketers reserve ad time for the upcoming season, it may be forced to do so on a "cash-only" basis.

The government is requiring GM to reach acceptable agreements with creditors by June 1 in order to avoid bankruptcy, and that deadline is fast approaching. It's also far from fortuitous for the media world, given that it occurs a month after the TV upfront. GM spent some $2 billion in total measured media last year, and media sellers worry that the marketer -- not to mention Chrysler, which spent $700 million last year -- won't be able to pay for time it corrals in the upfront.