Friday, July 01, 2005

There's Trouble in River City
And Advertising Can't Cure All Ills

My earlier post on GM as still the reigning leader of US advertising expenditures was sinking in my head as I ate dinner. It is great for all of us in marketing to have such investment in the media that produce so many jobs. But it isn't all pretty at GM, as we have all been reading in the financial news. Standard & Poors' downgrade of GM has pushed their bonds into junk status.

Despite $4 billion in advertising, they are not selling enough cars to cover their debt. Massive incentives to car buyers are not creating sufficient market share and analysts are openly talking about a GM bankruptcy. That would be a tragedy for the workers at GM and all the vendors who support the company. It will also be a tragedy for the advertising community. Can GM become relevant to car buyers and reverse the downfall? Where will this all shake out?

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