With Toyota Motor Co. scrambling to control the damage from the massive recall of 2.3 million vehicles, GM has acted quickly to take advantage of the situation by introducing an incentive program targeted at Toyota owners.

"All Toyota advertising is currently under view and we're looking at a range of options," a spokeswoman for Saatchi & Saatchi, Los Angeles, the agency of record for national advertising, told Ad Age. She declined to get into specifics about the types of strategies under review, and more critically, how soon a new ad push is coming.

Much of Toyota's Canadian advertising is produced by Saatchi's Toronto office and Dentsu.

People close to the situation said Toyota marketing executives have been locked in discussions for the past two days examining different marketing strategies for communicating with consumers about the recall and trying to salvage its reputation. But breaching the silence, GM seized advantage of Toyota's indecisiveness by unveiling a incentive programs in Canada and the U.S. designed to pick off Toyota and Lexus customers.

According to the Windsor Star, the Canadian program extends the GM customer loyalty program to Toyota owners, offering $1,000 rebate on most new GM products. GM Canada spokesman Tony LaRocca told the Star the offer includes "the vast majority of our lineup" and a 60-day period to return the new vehicle at no penalty and a five-year/160,000 km powertrain warranty.

It's a response to the "huge number of inquiries we're getting from Toyota owners who are asking us, ‘What can you do for us?'" LaRocca told the Star.

In the U.S. the program, which runs through the end of February, allows Toyota owners who terminate their lease to get up to $1,000 off a new or leased GM vehicle. The offer applies to Chevrolet, Cadillac, Buick and GMC vehicles.

Toyota is buying search ads against the keywords "toyota recall," but so is GM. GM's ads say "May the Best Car Win."

Other advertisers include a law firm specializing in auto suits and AOL's DailyFinance.com. A New Jersey-based internet marketing agency, Pasch Consulting Group, has also launched an independent website filled with news about the recall: ToyotaRecall.org.

In Canada, Toyota's advertising efforts will focus on non-recalled models, said Sandy Di Felice, director of external affairs of the automaker's Canadian operation.

Dealing with the recall will remain a public relations and media relations assignment for the time being, she said, but the company is "considering" other channels as well.

The potential damage to Toyota's reputation is almost as massive as the auto giant itself, which surpassed former worldwide top seller GM in 2007. Last Thursday, Toyota said it would recall approximately 2.3 million vehicles to correct sticking accelerator pedals on specific Toyota Division models. Five days later, it told its dealers to temporarily suspend sales of eight models involved in the recall.

"Helping ensure the safety of our customers and restoring confidence in Toyota are very important to our company," group VP and Toyota division general manager Bob Carter said in a statement. "This action is necessary until a remedy is finalized. We're making every effort to address this situation for our customers as quickly as possible."

While the company got some praise in the blogosphere for putting its customers ahead of its business reality, some experts believe there's more to it than that. "The initial recall wasn't handled as properly as it should have been," said Wes Brown, partner at Iceology, a brand consulting and consumer insight firm. "They let it linger too long because they didn't think it was a design flaw."

Brown said the best approach now will be "some level of admitting their initial diagnosis didn't go deep enough" and talking about "why they took this unprecedented approach to say why you can't sell or run the risk of selling anyone a car right now."

His suggestion: "I have to assume they may try to get out a massive ad campaign... If they can get on the Super Bowl, that would be huge," Brown said. "That would be a great way to get in front of 100 million people to explain the situation and what they are doing about it."

Rich Tauberman, exec VP at Interpublic Group of Cos.' MWW, said the damage will be directly related to when Toyota first knew there was a problem with the recalled cars. "It almost seems that they tried to put some Band-Aids on the situation," he said. "In any of these situations, if there's a cover-up, it's more damaging then the crisis itself. Crisis 101 teaches you to come out with as much information as possible right away and keep your audiences informed and do what needs to be done."

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