Thursday, November 20, 2008

GM's troubles ripple through sports and TV

General Motors is being forced to cut back, and some of its cuts are causing pain far beyond Detroit and far outside its circle of suppliers and workers. Like, for instance, in sports and sports TV. GM has in the past been by far the #1 advertiser in TV sports, but now they are reducing their spot buys and sponsorships considerably:
G.M. has been scaling back its sports presence for at least a year. Cadillac, a G.M. brand, withdrew its sponsorship of the Masters golf tournament in January, and this summer, G.M. ended its relationships with two Nascar racetracks: Bristol Motor Speedway in Tennessee and New Hampshire Motor Speedway. The company is not renewing its longstanding partnership with the United States Olympic Committee when their contract expires at the end of this year. In one of the most dramatic examples of the company’s diminishing sports profile, G.M. said recently that it would not buy television commercials in this season’s Super Bowl broadcast.
GM had eleven spots in last year's Super Bowl. The company recently reported that it plans to cut advertising 20% and promotional spending 25%.

Much of sports advertising and (especially) sponsorships is image-related and intended to have long-term brand-building effects. That's not easy to justify when you're close to bankruptcy and every expenditure is looked at in terms of immediate benefits.

They might be wiser to put their money into dealer advertising, where it can do double duty in producing immediate sales and in helping out the dealers, many of whom are themselves teetering on the edge.

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