Recently, General Motors gave a subtle shock to the world by announcing that it would not be advertising in next year’s Super Bowl, and that it was also pulling $10 million worth of Facebook advertisements.
This is all part of the American automaker’s plan of changing its marketing department as Joel Ewanick, Chief Marketing Officer of GM, is looking for more efficient and cost-effective ways to make Chevrolet and Cadillac global brands.
Recently however, it has been revealed that $600,000 or so of GM’s advertising budget last year went to agency Mother New York, where Pernilla Ammann is a partner and officer. Unfortunately, Ammann is also the wife of General Motors’ Dan Ammann who is acting Chief Financial Officer.
The transaction has now been “properly ratified” under the company’s policy covering related-party transactions but not all required procedures were followed according to the American automaker. “‘Properly ratified’ means our CEO and general counsel approved the transaction as being appropriate and in the company’s interest,” GM spokesman Dave Roman said in an e-mail. “In this instance, it was ratified after the fact.”
Mother New York worked on a project related to the centennial celebration for the Chevrolet brand and the arrangement wasn’t disclosed in the original proxy material during GM’s annual meeting. The American automaker claims it has just recently learned about the relationship and that Mother New York is no longer doing any work for GM at the current moment.
In the big picture however, $600,000 is a minor figure compared to the $1.8 billion GM spent total last year advertising.
[Source: Automotive News]