Publishers quake waiting for GM to announce ad cuts

Publishers and agencies are on tenterhooks waiting to see how bad the news will be from General Motors Corp., one of North America's biggest ad spenders, which said Tueday it would be making unspecified cuts to its sales and marketing budget.

According to a story in the Wall Street Journal, General Motors was the fourth-largest advertiser in the U.S. in 2007, spending $2.1 billion, according to ad-tracking firm TNS Media Intelligence. That was 7.7% less than the $2.3 billion it spent in 2006, which was itself a 24% decrease from 2005.

In the first quarter of 2008, magazine ad spending represented about 15% ($78.5 millioin) of the $535 million GM spent. So far this year, GM sales are down more than 16%.

Michael Nathanson, an analyst with Bernstein Research said in the Journal story that GM's move could encourage other auto makers to cut back their advertising spending. "It is going to get really ugly."