For GM, online marketing should be job one

April 2, 2009 – 10:52 am by Al DiGuido

If you can look past all of the jokes and editorial cartoons surrounding this past week’s decision by the White House to take greater control over General Motors, there are great lessons to be learned by all marketing types. Over the years, General Motors marketing budget ballooned to over $3 Billion dollars! That’s $3,000,000,000 dollars. This made the automaker one of the advertising industry’s biggest spenders.

In all of the days that led up to the ouster of Wagoner and the assignment of Fritz Henderson, did anyone inside this organization ever wonder… did anyone ever put pencil to paper and do the math? We are spending $3 billion dollars in raising awareness amongst the universe of prospective customers who are in the market to purchase cars and trucks…what’s our return on that multi-billion dollar investment? Did anyone in Detroit realize that General Motors didn’t really have a brand awareness problem? Their problem from a sales standpoint was that folks that were in market to buy cars… didn’t prefer their makes, models and brands. Geez…I know that the finance folks in many other organizations would have been asking that ROI question long before the budget got to $3 billion dollars. What happened ? Were the finance guys all on vacation?

I remember on one of my trips to Detroit… hearing from several senior execs inside of one of the major automakers… a very telling statistic. 70% of folks who will buy or lease a new car this year…have already purchased that brand of car from the automaker. Really? The “Brooklyn” in me wondered why automakers would spend as much of their marketing dollars in broadcast anything when over two-thirds of their prospective customers had already understood their brand and, in fact, had acted on their knowledge and purchased a car. Surely…there would be no need to spend a significant amount of those billions of dollars against a horde of the already converted. Now the math even makes less sense. If there are only 30% of active buyers in play…heck…let’s be generous… if there are 50% of buyers who are undecided….then our marketing dollars should be delivered against that core group of prospects.

If Barack Obama….OK let’s be serious…If Fritz Henderson would give me an audience, here is what I would tell him. In March of 2008 GM told the world that it would spend half of its $3B in marketing and advertising dollars online. Bravo. In recent weeks…GM looking for ways to be more efficient…announced that they would cut their total advertising budget by $800 million. With the events of recent days…I totally understand why. Job one for Fritz and the president….build the size of your customer database. Get out to your dealers and launch a major initiative to build one central profile database that houses all customer information; make, model, brand, vin #, postal address, email address. My experience in Detroit has shown me that automakers have very small email lists today. That must change immediately. Armed with a robust customer database, GM can be incredibly efficient in delivering new car information, new model upgrades, service messages via state of the art, creative and targeted email communication initiatives. Cost-per-contacts are measured in dollars per thousand contacts. The cost efficiency is simply too powerful to overlook any longer.

Research study after study… continues to document that the US car buyer is using the internet more than ever today to learn about and shop for automobiles. There is little doubt that the current generation continues to move more of their research, entertainment, community and commerce activity to online communication. It makes total fiscal and marketing sense for GM to become the world’s most proficient database marketing operation. Think of the amount of money that can be saved when that new Camaro is released this year…and GM delivers its new product introduction to its core list of sports car purchasers who are nearing the end of their lease and or who have purchased their most recent GM automobile three years ago. A splashy email campaign featuring a series of triggered flash based walkthroughs of this new “transformer.” This is only the start of a new GM who wants to build meaningful electronic dialogues with its current customer base in an effort to inform and respond in a more targeted way to their ever changing opinions and preferences.

Do I believe that there is a role in maintaining broadcast based messaging as part of a new car roll-out? Definitely yes. Is there a role for television, radio and print advertising? No doubt. But automotive marketing needs to pivot off of a deep understanding of customer profile. Exhaustive profile databases need to be built. Email addresses for all customers need to be appended. An intensive focus on building breakthrough email creative campaign executions is a must. While the new leadership is focused on cutting costs, closing plants, reforming production lines and dealing with unions, let’s not miss the opportunity to transform the entire marketing effort at GM and elsewhere.