Read Between the Lines Of Ford’s Announcement Of Its Double Digit Ad Spend Growth This Year And Traditional Media Should Not Cheer Too Much – A Lot of That New Spend Is Going Digital and Elsewhere

Sure newspapers, television, magazines and the like will all be running new Ford ads – TV in particular has a real blitz with the new “Bold Moves” campaign launching this week -- but by no means are they going to get all of that new money.

For a start Ford has signed a two-year deal with Kelly Clarkson, who won the first American Idol TV contest – European readers may be more familiar with the Star Academy title – adopting her new song, Go, as its signature tune for the new campaign. “Bold Moves” emphasizes the various Ford brands and is largely about image - that the company is making "bold moves" on fuel economy, style, and safety and the like.

Ford has also secured rights to the song so other artists can promote the company. It is also the sole automotive sponsor of Clarkson’s 24-city concert tour where a car will be given away at every venue. No announcement on what all those signings and the tour costs, but you just know it is a packet and that is money traditional media won’t see except for the actual ads themselves.

Ford is also developing its own reality TV series -- tentative title is “Made in Detroit” – that has 15 contestants design, in conjunction with Ford designers, their own dream cars. Talk about branding! Discussions are ongoing to have the program aired on a cable channel; if that doesn’t work there is always broadband.

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And talking of the Internet, in June the company will launch boldmoves.com that interviews Ford staffers and others for two-minute videos on their real-life “bold moves” they had to take at various times in their lives – decisions that may have changed the course of their lives. Ford insiders will also be invited to blog on the site. The automaker plans heavy promotion for the project with major advertising on the major web portals – note that is web advertising not traditional media.

Traditional media depends very much on local car dealers as well as the automaker, but Ford wants more hands-on with how dealers plan their campaigns and spend the money. Most of the spend now goes on local television but Ford wants much of it switched to the Internet.

“We are increasing our digital spend because we know as consumers get closer to purchases they are using the Web a whole hell of a lot,” according to Martin Collins, Ford executive director – marketing. Which is yet another reason why Ford is spending more of that new ad money to revamp its Fordvehicles.com web site.

All of this comes against a background in which Ford and its dealers reduced their ad spend, said to be more than $1 billion annually, by 10% in 2005. The company recently announced that for 2006 it has sold 36% fewer vehicles this year than for the same period in 2005, and that it is closing 14 plants and wants to make 30,000 factory workers redundant. Its business plan calls for a return to profitability by 2008.

“Ford is playing offense again and we’re playing to win,” said Cisco Codina, group vice-president for North American marketing sales and service. But while there are TV and print ads, they are just a part of the campaign, although high-profile TV sporting events with 30 second and 60 second ads are a major Ford target.

The company has not released how much the “Bold Moves” Campaign will cost, but says it has budgeted for double-digit ad spending increases in both 2006 and 2007.

What Ford really wants to do is to get to the consumer without having to deal too much with the middleman packager of news, information and advertising, whether that is TV or print. Collins told an employee meeting, according to the Detroit News, that Ford is not happy with the way it is portrayed in the national media and wants to speak directly with consumers. “We have to be more proactive in reporting our own stories,” he said.

General Motors, the world’s largest carmaker, also in dire straits, meanwhile has not announced any new ad spends to dig itself out of trouble, but it is seriously looking at alternative advertising to traditional media.

What it likes right now is video on demand adverftising channels via cable (VOD). It believes VODs when watched close to the decision-making time to actually buy a car can serve as a virtual showroom of GM products. It believes seeing those videos from the comfort of a living room couch is more conducive than the family crouching around a PC screen. GM spends about $100 million annually on web advertising and promotion, and only about $30 million with cable, but it would like to get more VOD sites lined up.

GM Executive Director, Advertising & Media Operations, Betsy Lazar noted that cable has great digital penetration in the US and as more systems offer VOD advertising facilities then the carmaker says it is interested in expanding that type of ad business.

GM has signed VOD deals with three large cable companies – Time Warner, Cox Communications, and Comcast – and now can reach some 10.5 million VOD-ready US homes.

For traditional media the message is quite clear from these two huge advertising customers – more advertising spend these days doesn’t mean they get it; and if ad budgets are not increased but more non-traditional avenues become available, then the trend remains that traditional media’s slice of the advertising pie will continue to get smaller with each passing year.