GM throws marketing muscle into crucial makeover
Day 2 of General Motors Corp's bankruptcy, and the public makeover of the largest U.S. automaker is off and running.
Just hours after filing for bankruptcy, GM launched a crucial advertising campaign with a web video promising it would emerge leaner, better, stronger and smarter than it was before.
"Let's be completely honest, no company wants to go through this," an announcer says in the advertisement, as images of a rising sun, blooming plants and proud factory worker roll by.
"We're not witnessing the end of the American car. We're witnessing the rebirth of the American car," he says. "General Motors needs to start over in order to get stronger."
The one-minute video, posted at www.gmreinvention.com, is the carmaker's first stab at convincing customers that it is still alive and kicking, even if stuck in bankruptcy court.
It's not an easy message to sell. GM must be straight about its problems, advertising experts say, without appearing to be too down-and-out. It must be confident, but not cocky; derailed but not defeated.
"The hard part is credibility," said Tim Calkins, a marketing professor at the Kellogg School of Management. "If you look at the new spot, it's good and direct, but I don't know if anyone would believe it. Why would they believe it?"
It appears that the work of rebuilding GM's reputation will fall to Interpublic Group of Co Inc and Publicis Groupe SA, whose agencies handle most of GM's advertising and media buying in the United States. Last year, GM spent $2.3 billion on advertising, according to TNS Media Intelligence, remaining one of the country's biggest marketers despite its financial problems.
How much GM will be allowed to spend on image rehab as it works through bankruptcy remains to be seen. In the case of Chrysler, the bankruptcy court listed advertising company Omnicom Group Inc as a critical vendor -- a designation that makes it easier to pay the bills.
"I think it's pretty clear that, in order to sell cars, you have to advertise," IPG Chief Executive Michael Roth said at a conference late last month. "Our responsibility in working very closely with General Motors is to help them move their existing inventory as well as launch some new exciting brands in cars."
At the moment, according to court papers, GM still has bills to pay for its advertising work. It owes more than $160 million to Publicis and IPG, making them top creditors.
In a statement on Tuesday, IPG said "today marks an important step toward a strong and vital GM and that we look forward to playing our part in that future success."
Selling The Brand
Assuming GM can fund the advertising, executives will be tasked with finding the right approach to appeal to consumers. Advertising experts gave its first effort mixed reviews, with most agreeing GM should only focus on the image of the corporate parent for a brief period.
"How much does GM focus on the GM brand and how much does it focus on the individual brand?" Calkins said. "Right now GM is spending a lot of effort on the GM brand itself, and I'm not sure that's the right approach for them. People buy Chevrolet and Cadillac and Buick. They don't buy GM."
Dennis Ryan, chief creative officer of advertising agency Element 79, cautioned that GM cannot rely too much on flashy slogans and promises.
"I'd consider sharing whatever their most exciting designs are that fit a new mission with the public at a far earlier stage than normal, encouraging a sense of participation in the process," he said.
Others said that GM may be able to use the bankruptcy filing -- the third-largest in U.S. history and the largest ever in U.S. manufacturing -- to its benefit.
The Obama administration's plan for GM is for a quick sale process that would allow a much smaller company to emerge from court protection in as little as 60-90 days, with the government holding a key stake.
When it comes to marketing, GM may be wise to trumpet the government's role rather than downplay it, said Tom Denari, president of ad agency Young & Laramore.
"In the past, you've had marketing built around Buy American. Now you'd really be buying American, because now we own the company," said Denari. "You can play to the idea that this is our car company, and, like it or not, we're in it together."
[Source: By Paul Thomasch, Reuters, New York, 02jun09]
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