One of the most obvious items to fall under the knife when your company is in bankruptcy is the advertising budget. That sure is what happened to Chrysler during its short stay in Chapter 11. The automaker planned to spend $134 million on ads for nine weeks. The U.S. Treasury task force assigned to the company said, “We don’t think so.” A lively debate ensued.
The judge in the case, U.S. Bankruptcy Court Judge Arthur Gonzalez, asked point blank why Chrysler felt it needed to spend millions of dollars on ads while its plants were sitting idle. Robert Manzo, a consultant for Chrysler said it best, “Advertising and marketing dollars are critical to make sure the right message is out there about Chrysler, what’s happening to Chrysler during this interim period and why Chrysler will be a brand going forward that is one that a consumer should continue to look at as one of their purchase opportunities.”
The task force slashed Chrysler’s ad budget in half. The same thing almost certainly will happen to General Motors, which had a whopping $2.1 billion advertising budget — making GM the second biggest advertiser in the US just behind Procter & Gamble.
Why then is theme park company Six Flags increasing its advertising/marketing budget by 10-15% in some areas during its Chapter 11 restructuring? Because there’s no mean ol’ task force bullying them into whittling it down? Maybe, but the simple answer is that summer is Six Flags‘ bread and butter. It makes 80% of its revenues during the summer and if it’s going to survive bankruptcy, it can ill afford for customers to think that Chapter 11 means the parks are closed.
So one size doesn’t fit all when it comes to how to restructure and what parts of the budget should be axed during Chapter 11. I’m sure advertising companies like Ogilvy North America, which creates campaigns for Six Flags, are glad.
Speaking of Six Flags ads … that weird old man thing (Mr. Six…yes I actually looked that up) who dances and says, “More flags, More fun” on all of their ads creeps me out.
Ya know, it was kinda funny in the beginning (and old boy can really cut a rug — he’s actually a young guy in makeup) but yeah, it’s played out. Maybe Ogilvy will read these comments?
Actually, GM was allowed to determine their own ad budget..despite having accepted and wasted $30 billion tax payer dollars Before filing for bankruptcy. Now they’re planning to spend about $50 billion a year on more ads..
Let’s hope that they at least spend it on promoting the cars, rather than on GM the company. The Reinvention commercial was awful…it seemed like something intended for a creepy morale-booster between power point presentations at a GM annual meeting. But brand expert John Tantillo–who is actually optimistic about the company’s future prospects–pointed out that it fails precisely because it doesn’t focus on promoting GM’s brands, “People don’t buy a company; they buy a car.” http://blog.marketingdoctor.tv/2009/06/08/john-tantillos-brand-winner-and-loser-gm-and-levis.aspx (Tantillo also insists that “corporate advertising doesn’t work” and has argued before that Super Bowl advertising is a huge waste of money.)
The spoof version of the commercial is a much creative, smarter (and more honest) version – http://www.youtube.com/watch?v=GFV1vQwMlpU
And Jon Stewart´s bit on our forced acquisition of GM is the best news commentary I´ve seen yet on the situation – http://www.thedailyshow.com/video/index.jhtml?videoId=228973&title=big-mess
Lol re: the GM spoof ad, sloane! Thanks for commenting.