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BizReport : Trends & Ideas archives : October 23, 2006

GM To Boost Digital Spending

Analysts are saying an advertising change is coming for General Motors. The auto company will begin shifting more advertising dollars into digital in the future, some are saying.

by Kristina Knight

This is good news for online advertising companies, because it indicates that more large companies are beginning to see the Internet as a viable advertising resource. Currently, GM is spending about 10-15% of their ad dollars online, but according Merrill Lynch analyst Lauren Rich Fine, even more of the company’s ad dollars could be headed to the digital marketplace soon.

Fine told AdWeek, “Online as a percent of total spend will rise as will the total dollars spent online despite the company's continued auto sales challenges.”

As part of the change, General Motors is reportedly also telling local dealers to begin upping their online advertising dollars. Many of the local dealers are spending less than 10% of their budgets online. As a whole, GM is seeing a loss of revenue and widespread spending cuts because of the automotive market.

The change contradicts a recent Yahoo report that online advertising for auto dealers was softening.

The online spending change will be good for Digitas; GM is a client of theirs. In July, Digitas lowered their revenue predictions because of GM budget cuts.

Tags: General Motors, online advertising, online marketing, search marketing

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