Tuesday, March 22, 2011

Chrysler Group to Boost Ad Budget by 70% to $2.9 Billion in 2011

As the Chrysler Group continues its product renaissance with new or facelifted models, the Auburn Hills automaker is now looking to boost its marketing presence in the United States by increasing its advertising budget nearly 70 percent this year, from $1.72 billion in 2010 to around $2.9 billion in 2011.

The increase is even greater when compared to 2009, when Chrysler had just come out of bankruptcy and joined forces with the Fiat Group. According to the SEC filing, the Detroit firm spent just $677 million on advertising in the second half of 2009.

However, promoting the firm’s new models isn’t the only reason behind Chrysler’s decision to boost its advertising expenditure as the automaker also wants to convince investors that the company is on the right track ahead of an initial public stock offering expected later this year

"No matter how good or bad the new products are, it is all about perception now," analyst Ricardo de la Blanca, chief executive of DLB Group in Miami, told Detroit News. "It is safer to buy a competitor's vehicles, so the challenge is to engage consumers. If they do it right, they will be able to create hype," he added. "It is critical because they also need to satisfy investors and the government."

Source: Detroit News



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