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GM's Ad Pullback Hits Oscar

Monday, 18 Aug 2008 | 3:11 PM ET
GM logo, General Motors logo
GM logo, General Motors logo

Automotive advertising has taken a nosedive across advertising mediums, hitting TV advertising particularly hard.

And now one of the biggest nights on TV all year is losing its big auto advertiser, General Motors , which has been one of its biggest overall advertisers.

GM has long been one of ABC's biggest spenders for the Academy Awards, spending $110 million for Oscar commercials over the last 11 years; $13.5 million for the 2008 Oscars. GM has even gone beyond the 30-second spot, giving the show GM cars to shuttle celebs around on the big night.

Needless to say, with high gas prices crunching consumer spendin,g GM has been pulling back on its overall ad budget. But it's shifting its focus away from traditional TV ads -- it also pulled out of this year's Emmys -- and toward online ads which give a more carefully measured return on investment.

How bad is this for Walt Disney-owned ABC which brings in about $80 million in Oscar ad revenue?

It's certainly not good to lose one of your biggest sponsors, especially on the heels of an Academy Awards ceremony that almost didn't happen because of the writers' strike. But ABC does have plenty of time to strike deals with new advertisers.

And if you look at the other big ad buyers usually drawn to the Oscars, some of them will be affected by the consumer crunch, like J.C Penney.

But others, like Coca-Cola and McDonalds, will likely continue to invest in Oscar ads regardless of the economic environment. After all, it's called the Super Bowl for women for a reason; it pretty much guarantees advertisers they'll reach that desirable female demographic.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.