GM ads fail to boost sales significantly

Associated Press

DETROIT

General Motors’ ads just aren’t getting the job done.

Ever since the company left bankruptcy three years ago, the ads haven’t boosted sales much. The company’s biggest campaign, “Chevy Runs Deep,” has failed to generate buzz. And now, GM has forced out its star marketing chief just as it launches two key vehicles.

The lackluster ads and loss of marketing head Joel Ewanick raise doubts about GM’s ability to improve sales longer term. Experts say that even though it’s making better cars and trucks, advertising has failed to get the message across. Despite spending upward of $4 billion a year on marketing, GM hasn’t been able to dent the perception that other brands are better.

“GM continues to have an image problem, which really isn’t fair because their products are vastly improved,” says Rebecca Lindland, an analyst with IHS Automotive, an industry consulting firm.

GM’s U.S. sales rose just 4 percent in the first half of the year, lagging the 15-percent gain for the industry. The growth is paltry compared with increases of more than 30 percent at brands such as Volkswagen and Chrysler. Sales of two GM brands, Cadillac and Buick, have fallen, and GM’s share of the U.S. market has dropped almost two points in the past year to 18.1 percent.

GM’s July sales, due out today, are expected to be stagnant. And analysts predict its second-quarter earnings will show a decline when they’re announced Thursday.

The results aren’t what GM expected when it poached the industry’s hottest marketer from Nissan in 2010.

Ewanick was an industry standout. He burnished his reputation during a brilliant stint at Hyundai. The company’s U.S. market share leaped from 2.7 percent to 4.4 percent during his three years there. During the peak of the financial crisis in 2009, he rolled out a program that allowed buyers to return their cars if they lost their jobs.

For months, everyone at GM waited for Ewanick to bring the same magic to GM. But the big idea never came. Instead, “Chevy Runs Deep,” the campaign that tied Chevrolet to a century of American history, didn’t catch on. Even Ewanick had doubts. He reviewed the campaign but said last spring that GM research found it was helping the brand’s image.

The number of people looking into buying Chevrolets on the Edmunds.com automotive site actually fell from the campaign’s start in October of 2010 to June of this year.