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Advertising Landscape Changes: GM Sells Mediaworks General Motor's radical response to advertising landscape changes. If proof was needed that the world of marketing is in flux, it arrived on March 14, 2005. General Motors Corp.'s announcement that it has put its advertising division – worth an estimated $2.8 billion – to tender is one piece of anecdotal evidence no market observers can ignore. Spokeswoman Peg Holmes confirmed that a rapidly changing media landscape forced the decision for GM, the nation's biggest-spending advertiser in 2003."The media landscape has changed so much, so quickly," she explained in announcing the sale. "With all the volume we buy, we just thought it was time to take a fresh look at the entire operation. We're as interested in new ideas as we are in cost efficiencies." Indeed, it seems that upping spending is no failsafe route to improved revenue. While pumping in the region of $3 billion annually into its advertising, GM has been losing its U.S. market share to foreign competitors led by Toyota. Its sales for the first two months of 2005 were disappointing, down thirteen percent in February alone, and market shares for the two months have hit historic lows. GM Mediaworks bought advertising from national, local, print and nontraditional media, which includes Internet and radio. LCI purchased advertising in coordination with GM's dealers. The growing volume of advertising done in coordination with GM's dealers was one of the reasons for the review, Holmes said. Before GM formed GM Mediaworks in the mid-1990s, GM's advertising had not been centrally planned and purchased. "It used to be bought by each division for themselves," Holmes said. "Then we set up GM Mediaworks to leverage our buying power." The event, believed to be one of the largest advertising contracts ever put up for bid, is evidence of rapidly shifting currents in today's "media landscape," as it's frequently being identified. Some of the world's biggest advertisers have spoken on key challenges and potential solutions in today's rapidly changing media environment. New patterns of media consumption mean marketing must adapt and develop systems to benefit both companies and consumer. An explosion of channels and a rise in niche media have created consequent need to tailor messages to a re-defined consumer. Holistic messages, breakthrough connections established with the consumer and industry collaboration will be called for as the broad picture alters. As information channels multiply, the experts suggest, industry cooperation can help companies sort through the volume of information systems. Harmonized, they can better identify and meet consumer needs, allowing them to create new opportunities in business. Back To Mature Market News → Go To The GenerationTarget.com Mature Market Bookstore → |
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