General Motors will increase spending this year on Internet marketing, direct mail and customer relationship management, and decrease spending on traditional brand advertising, Automotive News reported yesterday.
“Traditional marketing has been coming down as we increase the Internet,” said John Middlebrook, GM's general manager of vehicle brand marketing and corporate advertising. “We're going to do more with CRM and direct mail. Traditional marketing will continue to go down.”
However, Internet ad spending would have to rise astronomically to account for more than a pittance of GM's budget, according to Competitive Media Reporting. GM spent $1.86 billion on television, magazine, newspaper, outdoor and radio advertising in 2002 through October, according to CMR. GM spent $3.2 million on online advertising, CMR claims.
Even so, news of GM's budget shift is in line with a recent study by the London Business School for French marketing agency Havas SA claiming that companies plan to shift more resources to direct mail and online marketing, especially in the United States and United Kingdom. Companies in the study cited accountability and the ability to target as reasons for the shift.
Likewise, Automotive News cited targeting and measurability as reasons for GM's shift.
As more evidence that GM is bolstering its direct marketing, the automaker is reportedly shifting dollars from broadcast network television to cable, and mass magazines to vertical titles.
“There are some magazines you can run the same ad, and it's got a lot more effect than another ad because of how people consume that magazine, and the same is true for a Web site and a TV program,” said CJ Fraleigh, GM's executive director of corporate advertising and marketing.
Traditional media currently accounts for 60 percent of GM's ad budget, excluding incentive marketing such as dealer and sales rep bonuses. This is reportedly down from 75 percent five years ago.