More GM ad dollars reserved for digital media

Questions abound over just how much money General Motors cut from their 2006 advertising budgets, but one thing is clear. More of the car company's ad dollars are being held back for digital media markets.

by Kristina Knight

According to a report from TNS Media Intelligence, GM cut more than $600 million from the 2006 advertising budget. That would be more than a 23% drop from 2005 advertising levels. GM disputes that fact, saying they cut only about 10% ($300 million) from the 2006 ad budget.

No matter how much was cut, the fact remains that more GM advertising dollars are not going to traditional markets - television, radio, newspapers and magazines. Instead, the embattled car company is turning to digital markets in an effort to harness the online audience. In 2006, GM launched its first online-only campaign for the new Pontiac G5. The move allowed them to spend roughly 60% less on the new car launch.

According to early results, the move was a good one for GM. Six weeks in to their online-only campaign last year, G5 sales were leading pre-launch estimates by 185%.

Many in the industry are watching the GM move closely. If the company continues to see success, or if their digital moves produce greater results, more companies are certain to follow suit.