GM Changes Game, Puts $1.5 Billion Online

GM, in what could signal a no-look-back shift to digital marketing, will dedicate half of its $3 billion budget to digital and one-to-one marketing in the next three years.

As the country’s third largest advertiser, GM’s switch may be the online marketing shot heard round the automotive world. GM, which spent nearly $10 billion on advertising last year, will use several online methods including gaming, search, mobile and a broad array of interactive applications.

Consumers looking to buy new vehicles were among the first to embrace online research to support buying decisions. And while television and print still have a place in product launches and awareness, many dealers now accept that the purchase process starts - and sometimes ends - online.

The news is not good for traditional media and may be exacerbated by a directive from GM’s Brent Dewar, vp-field sales, service and parts in North America. Dewar told Ad Age late last year that the auto maker will try to persuade its regional dealer ad groups “to shift their focus to digital vs. spot TV” starting this spring after the dealer co-ops, which spend $500 million annually, are revamped.

Other car makers are also upping online buys; Hyundai will double its online spending in 2008 over 2007.

Auto dealers are increasingly shifting their spend to online, with a particular focus on customer ratings and reviews and online video. 59 percent of dealers say they plan to use video on their own websites within the next 12 months, up from the current 33 percent, while the proportion of auto dealers using customer ratings and reviews will have risen from 29 percent to 43 percent, according to a new study by The Kelsey Group (via MarketingCharts). The proportion of those using social-networking sites will go from 15 percent to 33 percent, according to the surveyed dealers.