Agencies will work with GM thru bankruptcy


Although GM already owes millions of dollars for ad time and space, it probably won’t have any trouble buying even more, reports the NY Post. The automaker owes nearly $167 million to Publicis and Interpublic, and probably millions more to broadcasters and other media, according to the story. The hardest hit is Publicis’ Starcom MediaVest, which handles buying. Even so, ad agencies and media outlets are eager to continue doing business with GM—that’s if they are included on a filing that includes a court-approved list of “critical vendors” that will receive timely payments for their work while GM winds its way through bankruptcy. 
“Everyone is waiting with baited breath” for word of who will make the list, said one ad executive who is involved in GM’s bankruptcy.

Despite years of cutbacks, GM alone spent more than $2 billion buying and placing ads last year, according to TNS Media Intelligence.

Analysts expect the company to continue to spend on marketing, although at reduced levels. Indeed, GM is preparing a campaign to boost the company’s tarnished image even in bankruptcy. The company also said it plans to participate in the TV upfront market.

Like GM, Chrysler’s bankruptcy left behind millions in unpaid media bills. In its bankruptcy filing, Chrysler owed BBDO Detroit, its lead ad agency, $58 million. Chrysler gained court approval to make BBDO a critical vendor, giving GM’s ad agencies hope that they will get the same treatment.

The big difference, however, is that GM has a lot more suppliers, including marketing partners, and it will be tough for all of them to get special status.

GM owes another $25 million to Publicis, which ranks among the top 20 unsecured creditors. That amount likely reflects money owed to Leo Burnett, the Publicis agency for GM’s Pontiac, GMC and Buick brands, said the story.

GM lists just $16 million owed to Interpublic. IPG’s McCann Erickson is owed another $4.6 million for GM’s corporate branding, according to the filing.