GLOBAL BRIEF: Why GM is cutting its adspend - Mairi Clark reports on the impact of GM’s plan to cut budgets for US magazines

The announcement last week from General Motors that it is to slash its adspend in US magazines because of doubts over the medium’s effectiveness came as a shock to magazine publishers.

The announcement last week from General Motors that it is to slash

its adspend in US magazines because of doubts over the medium’s

effectiveness came as a shock to magazine publishers.



The car company is the medium’s largest advertiser; it spent more than

dollars 500 million in magazines last year. So why the cuts? Sources say

General Motors fears that it has not been using print advertising as

effectively as TV. Until it finds a solution, the company plans to put

more money into its TV schedule.



General Motors will continue to be a big spender in the magazine

market.



But it is now unlikely that its spend in 1998 will top the figure it

spent in 1997.



What is more worrying for the magazine market is that other car giants

are beginning to think along similar lines. In a separate move, the

rival car company, Chrysler, has also cut magazine spend for its

Plymouth marque.



Mike Smallwood, the managing director of Western International Media,

General Motors’ UK media agency for the Vauxhall brand, is adamant that

the move won’t affect the car manufacturer’s print budgets in the UK.

’There’s no link between what we do here and what they do in the US,’ he

says. ’If we thought a medium wasn’t proving as effective as we hoped it

would be, we’d cut the budget.’



Vauxhall will spend around pounds 70 million on advertising in 1998 and

Smallwood estimates that between pounds 25 and pounds 30 million will be

spent on print advertising.



The media market in the US, he points out, is different from that in the

UK. He adds: ’There seems to be much more client liaison and

involvement.



Every client looks at the efficiency of the medium it advertises in.

There will be no immediate repercussions on the UK situation.’



It is unclear what evidence GM has that print advertising is

in-effective, but it has asked its car marketing divisions and agencies

for more rigorous testing of print ads in a bid to improve creativity

and increase effectiveness.