Tom Denford
By Tom Denford
Aug 25, 2011 11:11:52 AM

$3BN GM Global Media Review: Cost-Cutting Or Cost-Management


You’ll no doubt have found it hard to miss the news that this week General Motors announced a review of its global media spend, estimated to be in excess of $3bn. The business is currently split regionally, there is no suggestion yet that this is a consolidation and we don’t yet have sight of the broad brief. I found it interesting that much of the debate and discussion when this was announced was the assumption that this was inevitably a “pre-double-dip” cost-cutting exercise which many accused Unilever and Vodafone (amongst others) of conducting in 2009 as the first recession hit adland.

I would like to believe that this review has a strategic ambition but there’s not yet much word coming from GM, or indeed the market, to suggest this. The appointment of an auditor (R3) to run the review probably isn’t reassuring the incumbent agencies either….

A review of this scale is going to remain in the headlines for its duration, many perhaps seeing it as a bell-weather for what double-dip agency reviews might look like in the coming (terrifying) 18 months for agencies. I would encourage GM and their auditors to take the opportunity to make a strategic ambition a publicly visible core of this review and hopefully avoid a frenzy of cost-cutting reviews in the wake of this big news from GM if the only news that trickles out is alarm concerning aggressive cost demands…

You can see my additional comments on this at AdAge.