Rohrs: Spot ad drop poses challenge

TV's top 10
Top 10 spot TV advertisers (all categories) for 2000
1. DaimlerChrysler $826,194,200
2. General Motors $582,423,300
3. Ford Division dealer assn. $410,105,200
4. Ford Motor Co. $305,798,500
5. American Honda Motor Co. $305,089,900
6. Verizon Communications $287,416,500
7. Nissan North America $245,449,700
8. Toyota Motor Sales U.S.A. $225,498,300
9. McDonald's Corp. $223,790,000
10. General Mills $199,736,600
Source: Television Bureau of Advertising using figures from Competitive Media Reporting/Media Watch

The Television Bureau of Advertising met in July with automotive marketers in Detroit and Los Angeles to encourage them to keep up spending in local TV, despite the economic slowdown. Automakers spent more in spot TV - advertising on local stations - than they did on broadcast or network TV last year.

According to Competitive Media Reporting, automakers spent $2.76 billion on local TV in 2000, up from $2.45 billion in 1999. That was the second consecutive year that spot TV received more automotive dollars than broadcast.

That's good news for Christopher Rohrs, who, since January 2000, has served as the president of the Television Bureau of Advertising, a trade association that represents more than 500 local TV stations. But the bad news is that huge TV spenders such as General Motors and DaimlerChrysler are cutting back on their spot spending this year.

Rohrs talked with Special Correspondent Laura Clark Geist about some of the challenges facing his organization.

What is the difference between national and local spot TV?

National spot is national advertisers who buy time on local stations around the country. Local advertisers buy TV time in their local market. Our revenue base for local stations is half national spot and half local spot.

Why did automakers spend more on local TV advertising in 2000?

The automotive business, more than any other, understands the importance of geographically targeting customers. Cars are very geographic in their sales patterns. Certain vehicles sell very well in the Southwest or Southeast, and others sell very well in the Midwest. Car dealers are very identifiable geographically.

Have local TV prices stayed about the same?

It's a market-by-market answer. The pricing of spot has not grown as much as the pricing of cable/network television.

What's going on in automotive this year?

It's a two-part story. The Big 3 (GM, Ford Motor Co. and the Chrysler group) have cut way back in their overall ad spending and their spot television ad spending. That's the bad news. The good news is that all the other manufacturers are staying the course or increasing their spending. But because of the "bigness" of the Big 3, overall automotive spending (in all media) is down this year. In the first five months of this year, Competitive Media Reporting shows the automotive category is down 7.4 percent from the year-ago period. The Big 3 are down 14.2 percent for the first five months. All of the others are up 4.6 percent for the first five months.

How about spot spending?

The picture gets worse for spot for the Big 3. Their spot spending (for the first five months of 2001) is down 24.9 percent compared with the year-ago period. The subtotal for all the other manufacturers for spot (the first five months of 2001) is down 4 percent. The grand total for spot is down 17.1 percent. That's a real challenge for us this year.

You recently visited automotive executives in Detroit and Los Angeles to disuss their use of spot TV. How did those talks go?

Clearly, we are finding that the "all other" category (the import manufacturers) are staying active in their local spending, and they are doing a combination of national and spot as the domestics back off.

How about the domestics?

There is new marketing leadership at each of the Big 3. I don't think there's a bias (against local TV), but I do think that there's more of a fixation on new media and promotional involvements with the Big 3 than there is with their competitors.

Do you think that local TV is getting a smaller share of the auto advertising pie?

We are getting a smaller share, and it's driven by DaimlerChrysler. Its reduction in spot is the biggest of all, and secondly, it's General Motors.

Do you think the new GM regional advertising strategy will help or hurt you?

It's going to help us (local TV). When they made that change and took all that spending back from the associations, that certainly hurt spot television. Their use of spot as a percentage (of their advertising budget) is the lowest of all. GM puts 19 percent of its ad spending into spot. Honda, by comparison, puts 33 percent (of its ad budget in spot), while Nissan puts 35 percent in spot, and Toyota puts 32 percent into it. Chrysler is at 32 percent (into spot TV), and Ford is at 29 percent.

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