Auto Ads in Mags To Hit Skids in '06.

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Author: Smith, Stephanie D.

MEDIA

AFTER A TOUGH 2005, which saw magazines struggle to win their share of auto ads, publishers may be bracing for an even rougher road ahead.

In light of layoff announcements from General Motors, among other factors, automotive advertising is projected to be flat next year, according to John Casesa, automotive analyst at Merrill Lynch. And print budgets may be most vulnerable but not necessarily because of layoffs. Magazine spending this year had already flattened because automakers are driving more dollars toward nontraditional media, and that challenge will continue into next year.

"The greatest growth in media has been the digital space," said Andy Prakken, executive director of communications services at J. Walter Thompson, Detroit, which oversees Ford's ads. Not only are automakers pursuing more interactive, one-on-one communication with consumers, "those kinds of media have been growing in share because they're accountable," he said. And when profitability becomes paramount, he added, return on investment becomes even more scrutinized.

Through October, automotive advertising in magazines remained flat at $1.8 billion compared to the year prior, per Publishers Information Bureau. Total ad pages for the category dropped 4% for the same period.

The biggest challenge for publishers this year, which may be a sign of what's to come, is with the domestic carmakers. Ford's magazine spending through October grew slightly, up 2.1% to $270 million, but GM's investment was flat at $381 million, per TNS.

Chrysler, meanwhile, slashed its print budget 21.5% to $209 million.

Publishers did make up some of the difference from foreign manufacturers. While Toyota and Nissan's print dollars were flat through October, at $201 million and $192 million, respectively, Honda so far has spent $121 million, a 35% increase over 2004.

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By Stephanie D. Smith