Just as I applauded Captain's Quarters for their AdScam coverage here, as a businessman having worked for two of the world's largest corporations, I'd politely suggest they are missing the real story here.
After a number of poor editorial decisions, including running North Korean propaganda as a front-page news article last month, the Los Angeles Times not only has lost subscribers but now a major advertiser has cancelled its account at the paper. General Motors announced today that it will no longer buy advertising in Los Angeles' only major broadsheet due to the editorial incompetence shown by the newspaper
And judging by the links, a number of other blogs may be, as well.
While it would be nice to think that an industry behemoth like GM is showing some muscle, and not just muscle cars in response to what is, in the view of some, editorial incompetence - GM doesn't care a whit about the editorial competence of any publication in which it advertises. They are not in the newspaper business; they are in the automotive industry. And this decision, just like every decision GM makes, has to do with GM and automobiles - not news print.
Having met and had the pleasure of working with, as well as for a few Fortune 100 CEO's, I'll quickly sketch out what I believe likely happened.
We know that GM had already decided to shake up its advertising programs back before March when they announced:
Interpublic Group of Companies reportedly has said it would defend its advertising account with General Motors, which has put its ad business, estimated to be worth at least $2.8 billion, up for review.
That's just one of many shots across a few different bows GM will need to unleash because they are in a struggle right now, and struggle in American business at the level of a GM is at least somewhat akin to war. Trust me, they are playing to win their current battles, not make grand statements, or battle an unruly press.
More dynamics than one can imagine went into the GM decision to give the LA Times a slight smack on the wrist. And it is no more than that, as individual dealers - which spend the vast majority of newspaper automotive advertising dollars, will still be advertising. GM did NOT say it was stopping its dealer subsidization programs, only its Corporate spending. Their dealers would revolt if that happened.
This was a loud shot with great public relations effect but really very little bang. The LA Times knows that, though there is also something of a message being sent to an audience far larger than the Times advertising department. Yes, automotive reviewers around the Nation will pause and think, feeling the eyes of their advertising sales department burning a hole into their backs for the moment - and that's likely all GM can hope to get them to do.
More importantly, the only thing GM has been associated with in the news of late is its declining stock prices and reduced earnings projections. If you can't change the books, you can at least change the subject.
General Motors Corp.'s latest efforts to fix its crucial North American car and truck business have been pummeled again by competitors with hotter brands.
That's why the automaker announced Wednesday that it expects to lose money in the first quarter -- and the reason its stock fell to its lowest level in more than eight years.
GM sells more high-profit pickups and SUVs in the United States than any other automaker.
That last sentence is crucial, as it both reveals GM's brands and hints at their obvious branding strategy. Hummer, Pick Up, Trail Blazer, Cadillac, Buick - sorry, but with a line like that, offending the Susan Estrich wing of the LA Times Op-Ed page doesn't really risk much in terms of potential consequences for them. And their Saturn mostly brands independently of the larger GM family.
Huge corporations are not speed boats, they do not make sharp turns or too bold moves - they calculate factors and variables to a level the average person, even an average business person might find it hard to comprehend. It's times like these that people can show what an MBA degree is all about. Mostly, it's about strategy, not tactics.
And don't think the brand manager of their pick up line whose sales come from all those mostly Red States isn't loving every God fearing minute of the muscle car maker showing some muscle to the boys in the press - and especially the LA press.
The cost to GM of pulling a few ads from the major liberal newspaper in a relatively green state? Next to nothing.
The value of changing the headlines around your brand in bad times, putting a smile on many a good old boy's face - and causing the automotive press to wonder if, indeed, they haven't been a bit too harsh on old GM? That's truly priceless.
This post also available at Blogger News.
GM machines are garbage. Bought them for years, screwed too many times, never bought another. That GM would manage to change the subject, so to speak, is consistent with its approach to marketing automobiles.
Instead of actually manufacturing a quality product, they're still producing Vegas, small and large, dressed up to look like something else.
The long and sorry decline of this corporation is the stuff of drama, because there is no bad decision since 1970 that hasn't been taken, and no villain like a GM Board villain. We can also thank this gang of thugs and idiots for Michael Moore.
Posted by: Rhod | Saturday, April 09, 2005 at 08:17 AM