Apparently, GM has been underwriting Ken Burns’ documentaries for years. It is no longer doing so.
I supposed the gut response is a big “Duhhhh…” The company is going broke, and can’t afford it, right?
Well, maybe. This seems to me akin to the stupid, stupid demagoguery about corporate jets (from people who ride them themselves at taxpayer expense).
Look, is the company in business, or is it out of business? If it’s in business, it has a CEO with great responsibilities, and only so many hours in a day, and it doesn’t make sense for him to waste time with TSA and sitting in Dallas for layovers (or stupider still, driving from Detroit), despite how bad it appears when he shows up in Washington with his hand out.
And if it’s in business, it is presumably (at least theoretically, even if it looks more like a finance company, pension and health-care provider that just does it on the side) in the business of manufacturing and selling cars. In order to sell cars, one has to market them. One of the traditional ways one does this is by sponsorships, to provide brand recognition.
Now one can argue that perhaps this is an ineffective form of marketing, particularly for a company that has been around as long as General Motors, but one could have argued that during boom times as well. Unless it was purely viewed as philanthropic (in which case they certainly should cut back, since they have no available funds for pure do-goodery), it was presumably previously justified as part of their marketing budget. If it was justified then, why wouldn’t it be now, when marketing is more critical than ever? The problem with marketing, as the old saw on Madison Avenue goes, is that only half of it is effective, but no one knows which half.
My question is, does this mean that, after all these years, some analyst did an analysis and said, “Hey guys, it turns out that the Ken Burns stuff doesn’t sell cars! Sorry I didn’t let you know twenty years ago — I could have saved the company a lot of money.” Or is it just one more sign that the company is bankrupt, but won’t admit it?
It’s the fad these days among America’s largest companies.
It might make sense for GM to cut back even if the sponsorship was a profitable one in the past. The amount of money spent on advertising should have some relationship to the total size of the market, and the car market is much smaller today than it was a year ago.
In the same vein, Google is selling fewer web ads, not because they’re less effective than they were a year ago, but because their clients aren’t selling as much stuff.
Maybe it is to avoid a conflict of interest.
Automobile. A Ken Burns film.
“First thing to go on my Buick was the alternator. I took it to the dealership where they told me it was the battery, which had to be replaced at my own expense. It failed two days later on Woodward Avenue and the car had to be towed in. Then they admitted it was the alternator, but they did not have one of those in stock, and I would be without the car for two weeks. I hate to admit it, but I now drive a Honda — I keep it in a garage where I have blocked out the windows.
G Fredrick Worthington, IV, Grosse Pointe, MI”
“I can tell ya dis. I always tell members of my family who buy their cars on da GM Employee Discount to check the build date on da inside panel of da driver’s door. I tell dem to buy a car made in da first week of da Michigan deer huntin season. In deer season, me and da boys are out in da woods, but dose guys at GM at da plant and everthin’ keep da line runnin’ even do dey are at half da normal workers.
Turns out with half da workers gone, ‘specially the guys who have there minds on huntin’ instead of cars, da work goes on much more smooth and everythin’ and da cars are better made.
T. R. Frumple, Flint, Michigan”
I do think that in seriously hard times among the first line-items to go will be “soft” advertising, such as the Burns documentaries. Plus, I’d imagine having the GM logo front and center while trying to sell their cars, at a time like this when GM’s corporate reputation has been affected by public backlash toward bailouts, may not be the best way to sell cars.
Stick with the 30-second spots that emphasize the nameplate, not the corporate parent.
I thought GM was a pension plan which owned a small car company….
BBB
Well, not all advertising is equal. It’s possible some honcho at GM decided Ken Burns sponsorship sells fewer cars per dollar spent than ad time during an NFL game.
I expect he’d be right, too.
The other obvious factor to me was that they had a ten year contract with Burns, expiring in 2009. Assuming he could drive just as hard a bargain this time, it would be madness to sign a contract through 2019. Geez, by then probably there won’t be any more HBO original movies — or original content of any kind — we’ll all just be watching endlessly hyperlinked YouTube videos of funny cat tricks, teenager girls undressing, Obama inspirational speech mash-ups (those’ll be required by the Thought Police), and pirated Japanimation.
GM was a bank that happened to own a mediocre
car factory.
Now it’s neither.
and i once read a study that companies without BizJets
were more profitable then firms that owned them.
In fact the profits usually dropped after they acquired one.
The execs spend too much time jockeying on who can
fly on the jet rather then working.
Lots of executives fly business class, they take a bunch
of papers and they get their reading done.
2 hours, no phone calls, it’s wonderful time.
I agree that Burns probably should be dropped. An effect that gets missed here is that companies don’t question their expenses in boom times. It’s likely that Burns should have been axed long ago. But they weren’t interested in doing so. Now they’re focusing on their business. Even if it’s too little, too late, this is still an improvement on what GM was doing before. And it will IMHO mean that GM is healthier going into bankruptcy court than they would otherwise be.