Chrysler to Slash $100m-plus from Ad Budget

15 January 2002

In an attempt to return to profitability, DaimlerChrysler is to slash the marketing budget for its Chrysler Group arm by at least $100 million over the coming year.

Speaking last week, executive vp–sales and marketing Jim Schroer said adspend would be reduced to a level sufficient simply to hang on to its market share from Q4 2001, adding: "We owe it to our shareholders to get back into the black."

Chrysler assigned $860 million to marketing over the first three quarters of last year – itself a 15% drop on the equivalent period in 2000. Its lead ad shop is PentaMark, part of Omnicom Group.

The focus of the cuts will be a scaling back of the production of ads. In addition, Chrysler intends to reduce its activity during the upfront media buying season in the hope that it can pick up spots later on at lower prices, while changes to its internet strategy are also in the pipeline.

Marketing this year will focus on the group’s individual brands, all of which, said Schroer, "need to add value." There are no plans for corporate-wide advertising, an approach the sales and marketing boss dismissed as a "brand salad" that just confused the other messages.

Chrysler is not alone in continuing adspend cuts this year – General Motors expects its own marketing budget to slip by a single-figure percentage. GM's advertising expenditure sank from $1.9 billion in the first three quarters of 2000 to $1.2bn a year later.

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