How will changes at GM, Chrysler affect ad spend?; Recommendations

GM ChryslerWith all of the hard choices and forced decision-making going on in Detroit from the Obama Administration’s auto panel, we asked a few experts what impact all of this could have on ad spend and the upcoming TV upfront.

Just before going on the air yesterday morning, Julie Roehm, Fox Business News analyst and former Director of Marketing Communications for Chrysler Group Marketing, spoke to RBR/TVBR: “I’m sure that it is impacting their advertising dollars in total—TV and otherwise—because they are being scrutinized not only by their own management and shareholders, but by the government. So anything you do is watched and looked at. I would guess they are going to be more cautious and therefore probably spend less. Even though, I think that probably the time right now is to be much more aggressive with their messaging than they have in the past. Because more than ever, they need America to know what they’re doing and how they’re doing it. I think America need to feel a lot more involved in the process than they have so far. All they know is a lot of their taxpayer dollars are going to them, but they don’t really know what the plan is—other than what Congress tells them. So I think there is a much bigger opportunity for them that they haven’t really captured.”

What about Ford?
“Ford, in particular, hasn’t taken the TARP money, but I don’t think they’ve taken advantage of the fact that they haven’t—and that they have a plan. And I don’t think we’ve seen enough of a difference, really, from them. I think it’s a missed opportunity. My hope is that they come out a bit more aggressively with the message.

I think that more than anything, America needs to see a message. They need to see what’s going on and they need to find a reason to come back to the showroom and buy. In general it’s tough for people to buy anything these days, but they need to hear more about why they should come there, and what’s going on. I think they need to feel as though they as Americans are part of the solution.”

A major media buyer had more advice for the industry, off the record:
“I think in the case of Chrysler, they’ve got to keep spending some money because they’ve got to look like an ongoing and solvent business proposition. I think the best thing GM could do is the same—they can’t just pull in their horns because they have to demonstrate viability to the marketplace and to the government…that some of this proposal that they’ve put up will actually work.

Remember, people don’t buy cars, dealers buy cars. And that’s when the funds are generated. So if the dealers are not buying the product that creates a business model that looks pretty toxic to the government. So you’ve got to keep that demand going in some way, shape or form.”

But they are going to have to get approval from the auto panel to authorize ad spend.
“Right, no question of that. And the more the government gets involved in that piece of it, the more it might turn into government work than marketing and advertising. Anytime you get the government involved in decision-making, someone will say, ‘Why are we spending this money on advertising? That doesn’t make any sense.’ These guys have done nothing to promote the upper part of the funnel of purchase. I mean who thinks of Buick as an experiential product? You’ve got to get out in front of the public.”

I’d love to hear what the rest of you are thinking?

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