GM, NBC Sign Big, Long-Term Advertising Pact : Marketing: The reported $500-million-plus deal could greatly change the way other big companies spend their advertising dollars.

The nation’s No. 1 car maker, General Motors, and No. 1 network, National Broadcasting Co., on Monday announced a long-term television advertising pact said to be worth more than $500 million.

Some advertising executives say the deal could greatly change the way many advertising giants purchase TV commercial time--as well as space in magazines and newspapers.

“This purchase is the largest commitment made by an advertiser in the history of television advertising sales,” said Larry Hoffner, executive vice president of NBC network sales, in a statement. He declined to specify the size or length of the contract, although NBC confirmed that the contract was for several years.

Under the arrangement, which begins in the 1990-91 season, GM advertising will be placed on NBC network prime-time shows such as the top-rated “Cosby Show” and “Cheers,” as well as on its National Football League games. The spots for GM cars, trucks and automotive services will also appear on two cable networks in which NBC has an interest, the Consumer News and Business Channel and Sports Channel America.

Perhaps more significant than the specifics of the contract is how this one deal could have a domino effect within the industry. Top advertising executives say the mega-deal, which is believed to stretch over at least a three-year period, could change the way many of the nation’s top 25 advertisers annually spend more than $18 billion in advertising dollars.

“This could eventually be a way of life for the biggest advertisers,” said Fred Danzig, editor of the trade magazine Advertising Age. “The top network advertisers will increasingly ask their agencies to seek out deals like this--and to do even better.”

What’s more, when one network sells so much advertising time to a single advertiser, that makes the whole network advertising “pie” much smaller, said Peter McCarthy, vice president of Western advertising sales at ABC. “Other advertisers will look at this very carefully. It just might be a catalyst.”

It is not uncommon for advertisers to ask the TV networks for long-term deals, but historically the networks have shunned them. “It’s tough enough to come up with an agreement over what will happen the next year,” said Bob Blackmore, executive vice president of the NBC network, in an telephone interview. “I don’t see this as a trend.”

Some believe, however, that the biggest advertisers, such as Philip Morris, which spends more than $2 billion annually, and Procter & Gamble, which spends $1.5 billion, might now try to strike colossal deals similar to this one made between GM and NBC.

For the advertisers, the deals guarantee placement on the best shows at the best times. For the networks, the deals would appear to all but guarantee respectable revenues during times of falling viewership.

Just last week, ESPN announced a five-year, $100-million deal with Anheuser-Busch, making it the cable network’s largest advertiser. And American Home Products, which makes analgesics such as Anacin and Advil as well as Easy-Off oven cleaner and Easy-On spray starch, is said to have committed nearly $250 million to advertising on NBC during the next few years.

For years, the odds have been good that networks could make more money with year-to-year deals. But times are leaner, and everyone is looking for bargains. That’s right, even $500-million-plus bargains.

“The agreement is consistent with GM’s ongoing effort to get the maximum value for our advertising expenditures,” Philip Guarascio, GM’s executive director of advertising, said in a statement. “It assures us attractive prices on the most desirable programming.”

Guarascio noted that the pact allows for “mid-course corrections” if the number of viewers falls below expectations. He also confirmed that a good chunk of the ad budget will be pumped into GM’s introduction of its new line of Saturn cars that is expected to go on sale this fall. Ad executives say that to get people familiar with the Saturn name, GM will likely feature Saturn as the sole advertiser for some “big event” shows on NBC during the next year.

“GM can feel like a winner,” said Danzig of Advertising Age. “It has now got some order and stability to its advertising.”