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GM Spends an Embarrassing Amount of Money on Advertising

In 2018, companies in the United States increased the amount of money they spent on ads. The 2019 Ad Age Leading National Advertisers Report found that the top 200 advertisers spent a total of $163 billion combined on their ads in 2018. That’s up 3.6 percent compared to 2017. There are 45 companies that spent more than $1 billion on U.S. advertising during 2018. Three auto manufacturers ranked in the top 25, and GM advertising came in highest at No. 5.

General Motors spends a bunch of money on ads

The General Motors Corp. spent $3.14 billion on U.S. advertising in 2018. That included GM’s multiple vehicle brands, namely Chevrolet, Buick, GMC, and Cadillac. The biggest chunk of GM’s ad budget went toward Chevrolet, with $825 million spent on Chevrolet ads during 2018. And, GM spent the most on TV ads compared to other forms of media, although auto spending on TV advertising has declined in recent years. The ads apparently are successful since GM has the highest market share among U.S. automakers. GM was also the only automaker in the top 10 U.S. ad spenders during 2018.

Huge advertising budgets for car companies

Mark Reuss, President of General Motors, announces that GMs Detroit-Hamtramck Assembly plant will build the all-electric Cruise Origin self-driving shuttle on January 27, 2020
Mark Reuss, President of GM | Bill Pugliano/Getty Images

While they didn’t spend quite as much money, other car companies had big budgets for U.S. advertising in 2018. Ford Motor Co. ($2.3 billion) came in 13th on the list of leading national advertisers. Fiat Chrysler Automobiles ($2.1 billion), Toyota Motor Corp. ($1.4 billion), and Honda Motor Co. ($1.4 billion) rounded out the rest of the top five auto spenders. Together these five companies claimed 67.6 percent of the market share.

These U.S. costs are lower than they were in years past. A report by Zenith found that spending on auto ads in the U.S. declined by 12 percent between 2012 and 2018, but spending in emerging markets was growing quickly during the same time.

When looking at ad spending per vehicle sold, Hyundai claimed the top spot. Hyundai spent $4,006 per Genesis vehicle sold in 2018. Ford’s Lincoln brand came in second with $2,106 per vehicle sold. After Jaguar and Alfa Romeo, GM’s Cadillac brand came in fifth with $1,242 spent per vehicle sold. Tesla was the lowest at just $3 spent per vehicle sold.

Success for GM

It looks like all the ad spending is resulting in success for GM as the company’s profitability is strong and it owns the largest share of the market. The top 10 auto marketers in the U.S. made up 91.1 percent of the market share in 2018 and 92.0 percent in 2017. General Motors claimed 17.0 percent of that market share in 2018 and 17.4 percent in 2017. While General Motors does still own the largest share of the U.S. market, the company’s slice of the pie has decreased over the past 19 years. It used to have a giant 28 percent of the market share.

In another marker of its continued success, General Motors spent $100 billion less on advertising in 2018 than it did in 2017, but its share of the market remained about the same, declining only from 12.0 percent to 11.7 percent.

According to Statista.com, GM sold nearly 8.4 million vehicles in 2018, which was the company’s lowest sales number since 2011. However, the company’s profitability depends on selling more high-profit-margin SUVs and pickup trucks. Profits from pickup trucks can be up to about $17,000. So, although unit sales were down, General Motors’ revenue increased by nearly $1.47 million in 2018 as compared to 2017.

And, in case you were wondering, Comcast Corp. was the company that spent the most on advertising in the U.S. in 2018 with $6.12 billion in total spending.