GM Tightens Grip on US Media Buying, European Dealer Network

22 May 2002

General Motors has moved to take greater control in two key marketing sectors: US local broadcast buying and the European dealer network for its premium Saab marque.

On the US front, GM is set to switch over $800 million (€866.79m; £547.46m) of broadcast media billings out of Universal McCann offshoot Local Communications and into MediaWorks, its dedicated buying unit. All three shops, including the ‘inhouse’ operation, are run by Interpublic Group.

The shift, scheduled for June, is the work of GM executive director of media and marketing operations, Michael Browner abetted by IPG chairman John Dooner and former Initiative Media boss Lou Schultz, a Detroit ad veteran who continues to advise IPG on media matters.

The given reason for the change, according to Browner, is the “explosive growth” of local broadcast spending in the past year – up from $300m – due to the creation of GM dealer groups.

Meantime, across the herring pond, GM is to invest between $117m-$135m in the European dealer network for Saab Automobile, revamping this in line with its plan to hike sales volumes on the continent by almost 50%.

Reversing the traditional one-way route, GM plans to emulate Japanese carmakers, led by Honda, which have axed dealer contracts in Germany (Europe’s largest car market) to create a smaller, dedicated network. It is thought that the new dealer structure will serve as a template for the rest of Europe and for other GM brands.

Says Jonathan Browning, vp sales and marketing for General Motors Europe : “It's clear that in the new block exemption environment [the upcoming removal by the European Commission of the auto industry’s anti-competition exemption] we will see multiple changes in the market place. Saab, as a smaller organisation, growing quickly, is a good test bed for seeing how different formats work.”

Data sourced from multiple publications; additional content by WARC staff