Thursday, May 11, 2006

GM hopes to spiff up image with retrospective ads

GM hopes to spiff up image with retrospective ads
Updated 5/11/2006 3:24 AM ET

By Theresa Howard, USA TODAY
NEW YORK — General Motors (GM) on Thursday begins airing the second in a series of corporate image ads scheduled to run through the summer that aim to restore some shine to a reputation that crashed head-on into bad news in recent months.
The company hopes its Then and Now campaign can get Wall Street, its employees and consumers to think of GM for its cars and not its losses, layoffs and plant closures.

"This is about elevating the image of GM and putting up a mirror and showing the company the way it is," says Bob Kraut, director of GM brand marketing. "The main objective is to give them something that's enjoyable to watch, open their minds and have them appreciate the company."

The effort got a boost from some good news on Monday when it posted restated first-quarter earnings, swinging to a quarterly profit of $445 million rather than a loss of $323 million.

But there was also news out of bankruptcy court that Delphi, the former parts unit GM spun off, may be a step closer to a major strike that could halt GM production lines.

The upbeat Then and Now ads feature images of past GM cars and other period icons, such as bell-bottom pants and eight-track tape players, interspersed with images of some of today's models. The soundtrack is the song AM Radio by Everclear.

One segment, for instance, shows a dance scene with the word "swing" compared with the Hummer and today's "bling."

Whether these ads can boost sales as well as GM's image is a key question for a company with retail sales of cars and light trucks down nearly 7% this year vs. this time last year — while the industry overall is flat, according to industry sales tracker Autodata.

In its heyday in 1962, GM's market share topped 50%; today, it is 25%, Autodata says.

Auto expert Gordon Wangers thinks the image ads waste money.

"You don't go to a GM showroom. You go to a Chevy showroom," says Wangers, CEO of auto- marketing consulting firm AMCI.

"It's been a massive corporate ego stroke doing these corporate ads vs. doing good marketing that moves iron."

GM advertising spending overall — corporate and individual brand ads — is up 16% to $451 million in the first two months of the year compared with the same period last year, according to tracker TNS Media Intelligence. Rivals' spending, meanwhile, is flat or even reduced.

Jim Hall, vice president of industry consulting firm AutoPacific, says the image ads are not a waste if they can get any "GM skeptics" to add a GM vehicle to their shopping lists.

"If it changes the consideration for just a few people, then it's effective, because they will talk to other people, and it spreads like a virus," Hall says.

"The truth is it's better to have advocates out there rather than skeptics."

Posted 5/10/2006 10:30 PM ET
Updated 5/11/2006 3:24 AM ET


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