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Upfront Story No. 1: GM Playing Hardball in Talks With Broadcasters, Seeks Price Rollbacks Despite Rising Market

Jun 4, 2012  •  Post A Comment

General Motors is in a standoff with TV networks over upfront ad pricing, Advertising Age reports. Media buyers and other sources familiar with the talks say the auto company wants networks to roll back pricing, something the major broadcast nets have refused to do.

The story reports: “The proposal from the automaker, which has recently stopped advertising on Facebook and in the next Super Bowl, appears to be onerous for the TV networks. One ad-buying executive said the automaker could be seeking cuts as large as 20%.”

The networks have balked at the request, the story notes. “Advertisers have typically asked TV networks for rollbacks during a major economic downturn, like the beginning of the recent recession, or when there has been a ratings shortfall,” the report points out. “This year, both sides of the table agree pricing is on the rise. Instead of arguing over whether a price increase is warranted, most of the haggling is centered on the size of the increase.”

The stance by GM, one of the biggest spenders on television advertising, could create a ripple effect. Last year GM spent about $1.1 billion on TV advertising, placing the company third behind Procter & Gamble and AT&T.

All of the TV networks have thus far refused to negotiate with GM, but fears are mounting that one network will come to the table — a move that could force others to soften their stances as well, one ad-buying executive said.

GM appears to be taking a softer stance in negotiations with cable, including closing deals with Viacom, as we reported separately.

2 Comments

  1. Viewership is down, and yet “both sides of the table agree pricing is on the rise”? Sounds like GM’s side of the table isn’t in full agreement. I’m surprised other big advertisers aren’t taking the same approach…

  2. Viewership is down, and yet “both sides of the table agree pricing is on the rise”? Sounds like GM’s side of the table isn’t in full agreement. I’m surprised other big advertisers aren’t taking the same approach…

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