SBD/May 21, 2012/Marketing and Sponsorship

GM Will Forgo Advertising In Super Bowl On CBS This Year, Calling Ads "Too Expensive"

Ewanick manages GM's global marketing, which spent $4.7B on ads last year
General Motors said that it will “forgo advertising in the next Super Bowl rather than swallow a price hike, a surprising reversal of strategy that comes as the auto maker overhauls its global marketing operations,” according to Terlep & Vranica of the WALL STREET JOURNAL. Media buyers estimate that ads for Super Bowl XLVII on CBS “are up about 9%," with 30-second spots selling for $3.8M. GM Global CMO Joel Ewanick on Friday said, "It's just getting too expensive. And we're not just going to do the same thing every year." Terlep & Vranica wrote pulling out of the next Super Bowl is “an unexpected move” for Ewanick, who has been “a big believer in the value of advertising for the event but is known for unorthodox moves.” Ewanick is “racing to make over GM's massive global marketing operations," which last year spent $4.7B on ads. Part of that overhaul “includes emphasizing markets outside of the U.S., where GM is either struggling or angling to expand in up-and-coming markets.” Data from Kantar Media noted GM is the “third largest Super Bowl advertiser," following A-B InBev and PepsiCo. The company has spent an estimated $82M on Super Bowl ad time from '02-11. GM in ’09 pulled out of the Super Bowl “amid the company's financial crisis and returned two years later." GM's retreat comes “amid intensifying concerns within the TV industry about the rising cost of sports programming” (WALL STREET JOURNAL, 5/19). Data from Kantar Media also noted GM from '02-11 was among a group of five companies that accounted for 37% of all Super Bowl advertising in the time frame. The company aired four 30-second spots during Super Bowl XLVI on NBC last year (THE DAILY).

BUCKING A TREND: In Detroit, Alisa Priddle noted GM’s decision is the “second major advertising move GM made” last week, after the automaker said earlier in the week that it “would halt advertising on Facebook” (DETROIT FREE PRESS, 5/19). Horizon Media Senior VP & Dir of Research Brad Adgate said, "It's an opportunity for others. I would venture a guess that someone would pick up the slack and see this as an opportunity" (REUTERS, 5/18). In N.Y., Stuart Elliott wrote GM is “not pulling out of the game, because it had not already agreed to buy any spots; rather, it has decided against a buy.” The company is “a mainstay Super Bowl sponsor, but not a continuous one” like A-B InBev. The auto category is “usually the largest in a Super Bowl game, but the number varies each year based on the economy and other factors” (NYTIMES.com, 5/18). AUTOMOTIVE NEWS’ Brian Steinberg wrote GM would “probably like its actions to spur a debate on the price of advertising and the ad efficiency of specific media outlets,” but the company’s move is “not likely to have an effect on Super Bowl advertising.” A GM spokesperson Tom Henderson said that “despite its colorful actions, GM isn't going to be spending less on advertising going forward” (AUTONEWS.com, 5/19).

HYUNDAI RE-UPS: The AP's Tom Krisher cited a source on Friday as saying that CBS “wants 25-to-30-percent more for air time than NBC charged during this year's game.” Krisher noted companies spent an average of $3.5M for a 30-second spot in last season's Super Bowl. Hyundai Senior VP/Marketing Steve Shannon, whose company had five spots before and during Super Bowl XLVI on NBC, said that the automaker is “willing to pay the price increase for next year's game.” Shannon declined to reveal how much the company will spend but said, "We still think it's a terrific value. We're happy to be back next year" (AP, 5/18). Shannon in an e-mail said, "The Super Bowl is a perfect venue for a brand like Hyundai. We are extremely pleased to be an advertiser on the 2013 Super Bowl” (USATODAY.com, 5/19).
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