Auto advertising in magazines suffered a meltdown in 2005 that cost publishers almost $100 million in revenue.
And the new year in magazine advertising for cars and trucks has dawned a lot like last year ended: dead.
Car companies spent about $1.99 billion to advertise in major U.S. consumer magazines last year, according to TNS Media Intelligence. That was a 2.3 percent drop from 2004.
Magazine publishers hope for a revival of auto advertising because of a long list of vehicle launches scheduled for the second half of 2006. For now, though, times in Detroit are as tough as magazine sales representatives say they can remember.
In four of the first six months of 2005, automakers increased their magazine ad spending over the year-ago months. But spending in each of the final six months was down from the same months of 2004.
In January 2006, spending fell 22.7 percent from the same month of 2005. There was a slight rebound in February, when magazines collected 4.1 percent more revenue in auto advertising than they did in February 2005. Figures were not available for March.
Rushing the Net
Automakers' advertising money continues to flow from print to the Internet. Last year, TNS reports, car companies spent nearly $273.4 million to advertise online - a 21.2 percent increase from 2004.
The percentage of Ford Motor Co.'s U.S. advertising budget allocated to magazines fell to 20.9 percent last year from 23.5 percent in 2004, TNS says. DaimlerChrysler AG's allotment to magazines fell to 18.6 percent in 2005 from 19.2 percent in the previous year. Last year General Motors' magazine allotment fell to 15.8 percent from 17.1 percent in 2004.
At the same time, the share of Ford's U.S. media spending that went to Web advertising grew to 3.5 percent in 2005 from 3.0 percent in 2004. GM's Internet share rose to 3.5 percent from 2.4 percent. By contrast, DaimlerChrysler cut its Web budget share to 2.0 percent last year from 2.2 percent the year before.
Magazine sales representatives say they expect total ad budgets for GM, Ford and the Chrysler group to be flat at best this year. The cost-conscious automakers also seek to target their advertising more precisely to specific audiences.
"As we've been working to increase the differentiation of our brands, we've been reducing the overlap of how they reach out to the consumer," a GM spokeswoman says.
"We believe in the power of magazines and are being smarter about how we use them by being more focused."
A Detroit-based magazine sales representative says mass-circulation magazines are "sucking wind" in the competition for auto advertising. Some smaller titles are doing better, the representative adds.
Publisher Meredith Corp. and Newsweek magazine have reduced their Detroit advertising sales staffs in the past few weeks. Even companies that are adding sales representatives in Detroit say they are struggling.
Time Inc. made even sharper cuts last October. Time historically has captured nearly a third of auto ad spending in U.S. magazines. But that revenue shrank about 14 percent last year.
Nick Matarazzo, group publishing director of Hachette Filipacchi Media U.S., says automakers are "evaluating the allocation of dollars and what media they go to." Print magazines, he adds, must "leverage their brands across platforms."
Matarazzo says magazine sales representatives "are going to have to be able to talk the talk. The ones who can't are the one who'll be changed."
You may contact Nat Ives and Jean Halliday at [email protected]