$4B in marketing does little to lift GM sales

8/1/2012

DETROIT -- General Motors Co.'s ads just aren't getting the job done.

Since the company left bankruptcy three years ago, its ads have not boosted sales much. The company's biggest campaign, "Chevy Runs Deep," has failed to generate buzz.

Now GM has forced out its star marketing chief as it launches two key vehicles.

The lackluster ads and the loss of marketing head Joel Ewanick raise doubts about GM's ability to improve sales longer term. Experts say that, although it is making better cars and trucks, advertising has failed to get the message across. Despite spending upward of $4 billion a year on marketing, GM has not been able to dent the perception that other brands are better.

"GM continues to have an image problem, which really isn't fair because their products are vastly improved," said Rebecca Lindland, an analyst with IHS Automotive, an industry consulting firm.

GM's U.S. sales rose just 4 percent in the first half of the year, lagging the 15 percent gain for the industry overall. GM's share of the U.S. market has dropped almost 2 points in the past year to 18.1 percent.

GM's July sales, due out today, are expected to be stagnant. Analysts predict its second-quarter earnings will show a decline when they are announced on Thursday.

The results are not what GM expected when it poached the industry's hottest marketer from Nissan Motor Co. in 2010. Mr. Ewanick burnished his reputation during a brilliant stint at Hyundai. That company's U.S. market share leaped to 4.4 percent from 2.7 percent in his three years there.

During the peak of the financial crisis in 2009, he rolled out a program that allowed buyers to return their cars if they lost their jobs.

For months, everyone at GM waited for Mr. Ewanick to bring the same magic to GM. But the big idea never came. Instead, "Chevy Runs Deep," the campaign that tied Chevrolet to a century of American history, failed to catch on.

Instead of flashbacks to vintage Chevys and sentimental stories about soldiers returning home, the ads should have emphasized GM's improved cars and trucks, said Charles R. Taylor, a marketing professor at Villanova University's school of business.

"The idea that many consumers are going to buy it simply based on the heritage is misguided," he said. "You really need to give the consumer a reason to buy the product beyond just long-term brand loyalty."

The campaign's tagline never matched the buzz created by Chevy campaigns going back to the 1950s, such as "See the USA in your Chevrolet," sung by Dinah Shore, or more recently Bob Seger's "Like a Rock," which expressed the ruggedness of Chevy pickups.

Mr. Ewanick would not comment on Tuesday.

Now GM is looking for its fifth marketing chief in a little over three years as it launches new versions of two top-selling vehicles -- the Chevrolet Malibu midsize sedan this summer and the Silverado pickup truck next year.