In the news: General Motors, the country's second-largest advertiser was reported to cut its ad spending by more than $600 million last year which according to TNS Media Intelligence is a great loss to mass media marketing.

GM's cut in its ad figures suggest an enormous falloff that is greater than the total spending of companies like Nike or Volkswagen. The automaker disputes the figures given by TNS Media Intelligence saying that it cut its ad spending by only 10% or a reduction of nearly $300 million which is far from the reported $2.65 billion in '05 to $2.03 billion in '06 by TNS. But despite the claim of GM, TNS is steadfast in its statement saying that it will not change what it has reported.

It really doesn't matter whether the cut was as large as the 23.6% reported by TNS or just 10% as claimed by GM the fact still remains that the country's second-largest advertiser is shifting to other marketing channels that are as effective but not as expensive like for instance direct marketing, web sites, online video, event marketing, branded entertainment and internet advertising. Although it is true that the mentioned marketing methods are inexpensive but it could have major effects not only for the old media companies that needs to shift to digital platforms but also to the other ad agencies whose direct and digital siblings have outstrip them in revenue.

According to Mark LaNeve, GM's VP-sales and marketing in North America, "We weren't down that much," stating further that the drop was only 10% and adding that 2007 spending is going to be flat. He also said that the drop in corporate ad spending was expected since it was part of the automaker's successful move last year to abandon multi-vehicle discounts that caused steep sales peaks and valleys and reduced profit margins.

TNS reported that the $303.3 million of the $627.4 million cut is the result of the corporate advertising while the rest came from nameplate spending. Betsy Lazar, Executive Director-Advertising and Media Operations said through a spokeswoman that General Motors will continue to employ online advertising and also stated that the TNS underreports that automaker's digital spending.

GM for its Pontiac brand has taken an unusual strategy of launching its G5 sport coupe with an all-online campaign last summer. It was a "radical experiment" according to Pontiac Marketing Director Mark-Hans Richer. The G5 ads were spread to hundreds of sites ranging from the biggies such as Yahoo Music, Google and MySpace up to small music and car-related sites. Mr. Richer however declines to comment on the figures spent for the said online ads but he said that the outlays were 60% to 70% lower than what Pontiac would have spent for traditional media.

TNS has reported that Pontiac's media spending plunged by $84.4 million to $137 million through November 2006 compared with 2005 but John Larson, General Manager, Pontiac said "I don't recognize that level of decline."

General Motors is also exploring buzz-building events to create relationships with consumers according to Jim Sanfilippo, exec VP of auto consultant AMCI. Example of which is the "Livin' Large" competition for communications college students which Chevrolet held last year wherein an Aveo was given as a prize.

Saturn another GM brand has also staged a "Have a Nice Gig" which is a nine-market battle-of-the-bands competition last summer. The winner will have the chance to do the opening act for the Bon Jovi Tour. The said program has generated nearly 10,000 leads and at the same time was able to introduced Saturn's expanded lineup to a great number of young prospective customers.

General Motors is also planning to employ online advertising to the rest of its products and that includes its array of auto parts such as GM axle assembly, GM ball joint, and many more. 639