Gm Starts Disassembling The Advertising Structure Its Fired Cmo Built Up
One of the biggest advertising and marketing stories of 2012 was GM’s precipitous and unceremonious firing of Joel Ewanick, the worldwide chief marketing officer it had brought on board with great fanfare.
In an August 2 conference call to analysts and reporters, CFO Dan Ammann stated, “The fundamental approach is, no change” in the wake of Ewanick’s abrupt dismissal. “The consolidation of agency spend, all the things we did with our media buy, those are all very real drivers of efficiencies and we’re absolutely going to continue with those.”
Like a politician’s promise, that statement came with an expiration date – namely, today.
Actions speak louder than words
One of the major themes of Ewanick’s tenure was cost retrenchment. To this end, he announced GM was cancelling a $10 million Facebook advertising buy on the eve of its IPO and tried to achieve economies of scale by consolidating GM’s advertising agency roster into an entity called Commonwealth – a hybrid comprising teams from Omnicom- and Interpublic-owned agencies, with Ewanick’s favorite, Goodby Silverstein & Partners, taking the lead on Chevrolet.
Today, Advertising Age reports, GM took a chunk out of Commonwealth and handed it over to former GM agency Leo Burnett.
So much for consolidation and economies of scale.
No big deal
According to GM director of product and brand communications Pat Morrissey, taking all Chevrolet Silverado truck advertising from Commonwealth wasn’t a repudiation or anything, but just a simple workload adjustment.
“Chevrolet will launch more than 20 products globally in 2013. That is an incredible amount of work for any advertising agency, especially a newly formed entity that is responsible for global campaigns in 140 markets,” he said. “Therefore, Chevrolet will leverage General Motors’ existing agency network to support the 2014 Silverado launch next year.”
In other words, no big deal.
But a statement from the new Silverado agency said otherwise:
Leo Burnett is thrilled to…take on responsibility for the very important Chevrolet Silverado brand and build our highly awarded and proven Detroit office. Although our relationship with GM dates all the way back to 1967, this day will certainly go down in the history of this very important partnership.
In other words, very big deal.
Especially when you consider that these two truck nameplates are GM’s highest-volume products and, with an estimated $12,000 margin built into each truck, its most profitable ones.
‘Great synergies’ to the rescue
“We believe having Leo Burnett work on both Silverado and Sierra will provide great synergies and result in creative campaigns that clearly differentiate the brands and engage truck customers,” Morrissey said. But will that be enough?
This year’s Super Bowl Silverado commercial cost the brand a 25% drop in showroom traffic while generating a 26% increase for rival Ford F-150 (which was mentioned by brand name in the spot).
While Silverado enjoyed a 42.2 percent share of the full-size pickup truck market in 2002, its share’s only 35.7 percent ten years later.
In November, when all light truck sales rose 14 percent and full-size pickup sales ten percent, Sierra sales were up an anemic four percent and Silverado sales were flat.
No wonder December 1 saw GM with a 139-day inventory of Silverados on hand – 64 percent more than targeted. And no wonder some dealers are offering $10,000 discounts – most of the $12,000-per-truck profit – just to move them off the lot.
So we wish the new Silverado and Sierra agency the best of luck.
They’re certainly going to need it.