According to a report from AdAge, General Motors is employing uncompromising negotiation tactics with the major television networks in purchasing ad spots. After making a widely-publicized decision to drop its paid Facebook advertisements as well as to not buy ads in next year’s Super Bowl telecast, the automaker is demanding that each of the networks cut their ad rates for the upfront period, which is the time frame that ad buyers make the bulk of their purchases.
In addition, the publication cited one ad-buying executive within General Motors as saying that The General is looking for cuts of as much as 20 percent and that the networks are declining any kind of negotiations.
The GM Authority Take
General Motors is the third-largest ad buyer in the U.S., behind Procter & Gamble and AT&T, so to say that it carries just a slight amount of weight when it comes to advertising may be an understatement. Interestingly, The General’s clout in the matter could result in an industry-wide ripple effect throughout the marketing and advertising industry, and — according to AdAge — one ad-buying exec said that fear is growing among media outlets “that if one TV network deals with GM, the others will have to capitulate.”
Ultimately, it seems that someone at GM (Joel Ewanick?) is on a mission to get the marketing end of the business on a tight leash and perhaps even pay the networks a fair (as opposed to an inflated) price for its products. Kudos goes out to GM for that.