Advertising agency Mullen landed near bankrupt General Motors Corp (Down 23.01% in the past 4 hours). to handle its customer relationship management programs with Detroit advertising agency Campbell-Ewald, Mullen said Thursday, this comes on the heels of them landing Sun Trust banking, which by the way is also down 20% in the past 4 hours ….
Mullen must be banking “excuse the pun” or driving for “excuse the other pun” companies in distress hoping that if there is a turn around, they are going to be enjoy the increased spends.
This is amazing stuff… because if there isn’t a turn around in a short period of time.. they might be left with a client list of foreclosures, it’s a major gamble. Because if too many of these distressed clients go under… so will Mullen.
It appears that General Motors is opting for an 8 dollar domain name and a 5 dollar a month hosting account as their advertising budget until this recession is over. I wouldn’t want to be their advertising agency of record.. especially if you staffed up over the past few years…… they cut out the superbowl, they cut traditional spends, now they are cutting digital.
One of the big success stories of online advertising was General Motors‘ pledge to shift at least half of their ad spend over to online in the next year — a total of $1.5 billion in new cash. Now it looks like that money is up in smoke, as the auto manufacturer, which lost $15 billion in the last quarter, is now saying it will cut back significantly on its digital ad spend. Full Story by Jake Swearingen
It’s ugly people.. really ugly,..
This might be the final nail to the coffin for traditional advertising being viewed as the ‘place to be’
It took a while.. but finally your clients are forcing ad agencies to focus more and more online.. taking resources away from Traditional… however the traditional advertising agency is still having very hard time with the reality on the ground…
The problem stems from lack of experience. SEO is an older marketing method… it’s been around for at least a dozen years now.. since Altavista was the kingpin of search, and a handful of us have been around since that time doing search engine optimization. However agencies are trying to now hire individuals to run their “SEO department” and that’s the problem.
It takes years upon years to build a really valid division. You can’t just hire some guy and hope he builds it… because he really can’t (even a talented one) in any short time frame… and the clock is ticking as the recession has accelerated the loss of traditional and flood towards digital and SEO. For a real honest SEO division, you must face the fact that your employees must be literally trained for about a year to be marginally effective (yea even the bright ones) within the SEO disciplines.. ranging from proper coding, link bait, social media , keyword research and hundreds of other factors. It’s not something one can ‘jump into’ ..
Your new employees are not learning something stagnate… the industry is the definition of moving target .. Google changed their Algo 450 times in 2007… most of these were to weed out spam.. others were valid changes that forced some modification for valid sites… … and hiring someone that can talk but not train … in other words the wrong guy….could set an agency back years. Not something an Ad Agency wants to face when speed is now becoming the problem.
There is no excuse for losing a client due to SEO and Digital. If you don’t have the proper inhouse skill set.. outsource it…. or buy it… but losing the client is not really a valid option… and frankly there isn’t much time to build one… that should of been done 10 years ago.
General Motors just allocated 1.5 billion to Digital and SEO, and as recently as last year Nike left W+K due to lack of Digital and SEO.
If that’s not a warning sign.. nothing is.
General Motors is leading the auto industry in shifting their traditional advertising campaigns to online marketing. The third-largest advertiser will spend half of their $3 billion advertising budget online. They give it 3 years to get there. Last year GM spent $197 million online. Full Story and Here
Evidently the writing is on the wall for Campbell-Ewald to brace for rough times ahead. The article also notes that Leo Burnett , McCann Erickson, Starcom Mediavest Group are all targeted for some hard times ahead as General Motors cuts it’s budget down to recession size. This means that potential layoffs are now being planned at those agencies. Rough times ahead for them… really rough times.
Any cutbacks in GM work exacerbate an already tough time for Campbell-Ewald, which in May lost its $35 million account with tire-maker Michelin North America Inc. after seven years, and also faces the potential loss of its U.S. Navy recruiting account, which is up for review after $410 million worth of work over the past three years.
The article also notes that large parts of the remaining budget will be allocated to digital.. Something the agencies are painfully unprepared for.
The automaker previously said it was planning to move more advertising work online, but it remains unclear how that will affect the advertising agencies, most of whom handle interactive work.
We can tell you how it will affect Advertising Agencies, none of the holding companies have yet purchased an SEO only firm, have failed to make any large investments in key areas of Social Media Optimization or any other online marketing discipline that does not involve pay per click and flash… in short.. they are painfully lacking on the technical side. So how they will affect advertising agencies are clear. A bunch of SEO and SMO firms will be getting a bunch of new accounts.