Automotive News - October 27, 2008 - (Page 20) 20 • OCTOBER 27, 2008 LaNeve: GM marketing budget faces ’09 hit Tough times end Web spending spree STRATEGY 2009: MARK LANEVE G eneral Motors will cut its 2009 marketing budget for all media — including digital — says Mark LaNeve, GM’s vice president of North American sales, service and marketing. GM is reducing costs and getting smarter about how to market digitally, LaNeve says, adding that the company’s acceleration of digital marketing spending has peaked. LaNeve, 49, discussed GM’s marketing plans with staff reporters Mary Connelly and Amy Wilson. What will happen to your marketing budget in 2009? Our spending will be reduced. It is part of overall cost-reduction initiatives across the whole company. We are attacking historic legacy costs, consolidating certain activities and getting much better efficiency on our in-market spend. We certainly want to protect our key launches, and we still want an aggressive share of voice in the market. How big will the reduction be? I won’t reveal that. It is significant. We have fewer models to market than we did a few years ago. We’ve done a lot of work to eliminate redundant models and get real brand-specific offerings. Our marketing spend for each of our nameplates will continue to be relatively consistent, as it has been over the last few years. Will your digital spending continue to rise? The reductions we take next year will be felt across all media types. Our media spend, in terms of percentages for print, TV and digital, will remain relatively stable from 2008 to 2009. The escalation we have had in digital as a percentage of spend — we won’t be escalating next year. Why is that? When a lot of the digital technology was new, all marketers were learning. As you learn, you get more efficient and you spend less money to get the same results, the same impact, the same reach in the marketplace. That is why I am comfortable with some of the cuts we are making. We are a whole lot better at search, at digital, at working with our third-party partners like Edmunds.com. It’s a weak economy in general. Media companies are under a lot of pressure, so a media dollar and a sponsorship dollar today goes further than it did in 2007 and 2006. In many cases, you can get the same level of sponsorship or level of reach for less money than a few years ago. Will next year’s marketing budget be big enough to support all your brands and nameplates properly? I feel comfortable that we are going to have enough resources to more than adequately attack the marketplace and work on achieving our sales and revenue targets. We prioritize the launches. The key launches are the Chevrolet Traverse, Camaro and Equinox. Cadillac has the CTS wagon, CTS-V series and CTS coupe on the horizon. And the Buick The decline is now over a threeyear period. It really started with Hurricane Katrina. The industry stopped growing and started declining. That has put a lot of pressure on dealer profitability in the whole industry. It is felt differently depending on the brand and region. Texas has held up relatively well. Florida and California have struggled because of their severe housing problems. There are more dealers looking to consolidate, to sell their property and free up the capital. The pressure on profitability accelerates, to some extent, the consolidation activity. But not dramatically so — not like you would think. Our strategy has remained the same. We don’t have a blanket program. We try to match up buyers and sellers. How has your dealership count changed this year? Our rooftop count is down 250 from the beginning of the year. I imagine it will be 350 to 400. Maybe more to the 400 side than the 350. It is tough to predict. We don’t work toward a target. A lot of dealers are well-capitalized with paid-off property. A lot of dealers are still making very good money. But if people were somewhat marginal heading into the downturn, they are really struggling now. You’re wrapping up a 90-day fuel economy advertising campaign. What will replace it? All the divisions are still going to have fuel economy messages. Even with fuel prices dropping, it is still top of mind with consumers. We are doing “Financing That Fits.” We’ll keep it going at some level if we think we need to. We are going to be moving into the Red Tag year-end event, probably starting in early November. Normally we would start mid-November. Next year, depending on how the market shapes up, you will see a pretty strong tactical focus. We will be leveraging incentive offers, combined with a fuel message or a quality message. We will make sure we are pounding that month in and month out. That would be a consistent message in addition to any launch or national advertising that the divisions are doing. GM has pulled its sponsorship of the Oscars. Are there more major sponsorships you will be withdrawing from? No. We have gotten out of a lot and on other ones scaled back. I am not going to cite any specifics. We were able to stay in some at very reduced rates. Did GM get its bang for the buck from your Olympics sponsorship this year? It exceeded my expectations — the buzz, the ratings, our presence. Michael Phelps lit up the whole world of sports. We saw a lot of improvement in awareness of fuel economy, Chevy fuel solutions. One of the reasons we did so well in market share in August and September was the Olympics. It gave us a great platform to launch employee discount. c JOE WILSSENS When GM announced its liquidity plan in July, marketing was targeted to be cut. Has that cut gotten deeper and bigger? We are looking to reach deeper in terms of how efficient we can get and how much we can reduce our overall structural costs. We have profitability targets we are attempting to meet. LaCrosse and GMC Terrain are two big launches. Saturn spending will be down from a couple of years ago, when they launched four products. They will still have adequate spending, but their spending will be down from the intensive launch mode. How much are showroom traffic and sales off in October? It started slow. Unless their job has been impacted, people want to feel good and spend money. That is kind of the American way. I really believe there is some pent-up demand. But consumer confidence needs to shore up. A lot of people don’t even think they can get credit. We broke an ad campaign, “Financing That Fits,” just to let people know there are banks out there loaning money. How much are the more restrictive lending policies at GMAC contributing to lower sales? We did very little penetration with GMAC in September and had our best share month of the year. There are plenty of banks financing. GMAC is still financing. We’ve got great incentives. The overall size of the market will be a much bigger factor in our sales performance. Are the current economy and tight capital accelerating GM’s dealership consolidation plan? The overall market and GM’s commensurate share of that smaller market is a much bigger issue for dealer profitability. http://www.Edmunds.com
Table of Contents Feed for the Digital Edition of Automotive News - October 27, 2008 Chrysler dealers under GM? States would rule Survey: Worried dealers flee GMAC Va. dealers turn to local credit unions Anxiety over Chrysler: Deal or no deal? Ford, GM execs join panels looking at eco-friendly options Big pickups, SUVs gain share Chrysler will cut 4,300 salaried jobs by year end BMW seeks joint vehicle electronics effort Runkle: Give tiny suppliers a chance VW goal: 80% N.A. content for Tenn. plant April Wortham China's BYD plans U.S. hybrids Lucky Icahn lost Lear Mahindra's U.S. launch to get $60 million ad drive Toyota may renew no-interest loans Hesterberg, Thomson will address congress Desperate industry begs feds for help Hyundai dealers want ads to pitch favorable loans Toyota, GM top global r&d spending After Detroit 3 take back design, supplier sitting pretty Germany's Preh supplies F-150 ventilation part Buehler is Volt supplier Freescale: New infotainment chip Are they too big to fail? A goal for GM: Buy back full control of GMAC Tax credit would move domestic cars GMAC loan bonus is a bad idea Take a good look: Toyota is losing its halo What flexibility is and what it isn't Toshiba joins battery battle Personnel Hyundai slows Ala. output of Sonata, Santa Fe Picture this LaNeve: GM marketing budget faces '09 hit Hyundai counts on luxury, hybrid hopes Keogh: Audi belongs with top luxury brands Dealers Court overturns class-action status in Blue Oval suit 2 major lemon-law lawyers lose right to practice in Md. Auctions offer more online for just-in-time dealers Used-truck prices higher in September Lack of used Minis limits certified program Wood trim maker expects to avoid worst of woes VW: U.S. may get Scirocco after all Ford's new F-150 is built for jobs, not jaunts Think of it as GPS for tools Feds look at China-made valves on Ford tires Shareholder value tumbles in 3rd quarter Shareholder value tumbles in 3rd quarter Ford truck marketing exec: Hybrid pickup 'publicity stunt' Survey: Ford Motor reliability improves Chrysler heir: Get back to basics Farley has bright idea to boost auction action Kerkorian speeds away from autos Names familiar? NADA leadership is a family affair Mitsubishi bucks trend on profits New trade debate in the works? Beware the 'vital' deal Automotive News - October 27, 2008 Automotive News - October 27, 2008 - (Page Intro) Automotive News - October 27, 2008 - (Page Bellyband1) Automotive News - October 27, 2008 - (Page Bellyband2) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 1) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 2) Automotive News - October 27, 2008 - Chrysler will cut 4,300 salaried jobs by year end (Page 3) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 4) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 5) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 6) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 7) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 8) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 9) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 10) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 11) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 12) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 13) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 14) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 15) Automotive News - October 27, 2008 - Hyundai slows Ala. output of Sonata, Santa Fe (Page 16) Automotive News - October 27, 2008 - Picture this (Page 17) Automotive News - October 27, 2008 - Picture this (Page 18) Automotive News - October 27, 2008 - Picture this (Page 19) Automotive News - October 27, 2008 - LaNeve: GM marketing budget faces '09 hit (Page 20) Automotive News - October 27, 2008 - Hyundai counts on luxury, hybrid hopes (Page 21) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 22) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 23) Automotive News - October 27, 2008 - Dealers (Page 24) Automotive News - October 27, 2008 - 2 major lemon-law lawyers lose right to practice in Md. (Page 25) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 26) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 27) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 28) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 29) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 30) Automotive News - October 27, 2008 - VW: U.S. may get Scirocco after all (Page 31) Automotive News - October 27, 2008 - Feds look at China-made valves on Ford tires (Page 32) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 33) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 34) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 35) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 36) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 37) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 38) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 39) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 40)
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