Agencies as GM ‘Critical Vendors’

With yesterday’s Chapter 11 bankruptcy filing of GM, it’s becoming clear just how much is owed to the the car manufacturer’s ad agencies and media-buying companies.

• Starcom MediaVest, a subsidiary of super-agency Publicis that handles media for GM, is the sixth-largest unsecured creditor to GM, to the tune of $121.5 million.

• Publicis itself is owed $25.3 million, putting the company on the hook upwards of $146 million altogether.

Agencies like Publicis are clamoring for the bankruptcy judge to grant them “critical vendor” status, which would put their claims at the top of “to-pay” pile.

And it’s likely to work.

Advertising and marketing is critical for any organization that hopes to rebuild itself after a bankruptcy, from the GMs of the world to Bob’s Crab Shack down the street.

Without agencies willing to provide it creative and media services after it emerges from bankruptcy, GM should just shut down completely and go home. They could emerge stronger, with better products, but if no one knows about them, their financial future will be short-term indeed.