GM still spends more
on incentives than ads

Leo Burnett's media arm stole the $3.8 billion General Motors account from an IPG consortium specially built for GM in Detroit. The buying duties will include all "digital media." Publicis, Burnett's parent company, created its own GM-dedicated shop in 2000, called General Motors Planworks. That shop has long been planning GM's media, handing off buying and billing functions to Mediaworks.

Betsy Lazar, GM's head of advertising and media operations, called the review only two months ago, reportedly after getting sick of inter-agency squabbling. Her stated intent, though, mentioned a desire to have "a more streamlined and efficient unit with greater focus on innovative, strategic media buying." She also pointed to "changes in the media landscape," to which she felt GM needed to respond. A Chicago Tribune auto reporter indicated, though, that the move was to cut costs.

GM has generally been seen as a media innovation laggard behind its cross-town competitor, Ford, whose account has long been managed by J. Walter Thompson.

The development of GM-specific shops has long been seen as a potentially risky move. The shops have all of their eggs in that one basket. In the short-term, large clients have been very responsive to the idea of a dedicated shop, but a loss of the client is obviously disastrous. It took only five years for a competing firm to launch and steal the account, indicating that the client-specific shop didn't enjoy the expected additional client loyalty - even though Mediaworks just completed an office move to downtown Detroit, just a few blocks from GM headquarters.

Mediaworks has not indicated what it will do with the existing staff once the AOR status officially moves to Planworks (expected in October). Planworks may opt to make some individuals job offers, or it may opt to staff the account from across a wider array of Publicis offices - a move that would get adrenaline moving among the vast media sales rep community in Detroit.