Over the past week, General Motors confirmed significant changes in its advertising strategy that seem to fly in the face of today's conventional wisdom.
First, virtually on the eve of Facebook going public with its IPO, GM pulled an estimated $10-million (US) in advertising from the social media site, saying such ads were ineffective.
Then the company announced it has decided not to advertise on TV coverage of next year's Superbowl, saying it was too expensive to do so. GM ran four ad spots during the 2012 game.
The cost for such advertising is reportedly in the range of $3-5-to-4.0-million for a 30-second spot – and that's just for air-time, with cost of production potentially many times that amount.
"We understand the reach the Super Bowl provides, but with the significant increase in price, we simply can't justify the expense," Joel Ewanick, GM's global chief marketing officer, said in a statement.
The change in advertising direction comes after GM consolidated its global advertising buying with just one agency, Carat, which is part of Aegis Media. Previously, that task was spread over approximately 50 different agencies.
With respect to Facebook, GM continues to maintain a marketing presence there with fan pages and other social media initiatives – but no advertising.
Ford responded to GM's Facebook move not only by affirming that it found its own ads on the site to be effective but by increasing its ad spend there. Chrysler also continues to advertise on Facebook.
As for the Superbowl, Ford pulled out of TV ads for the game this year, although in many opinions the company actually benefitted from GM's own ads, which not-too-subtly attacked Ford's trucks and their owners. The backlash against what was widely seen to be "playing dirty," created a favourable spin for Ford.
Chrysler's Superbowl ads over the past two years have not only won critical acclaim, they have been cited as a major factor in turning around public perception of the company.
Whether GM's strategy proves to be ahead of the curve or well behind it remains to be seen. But it will be interesting to see how it plays out.