Magazines Scramble as Auto Pages Diminish

Publishers Get Flexible on Rates, Services

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DETROIT (AdAge.com) -- Brenda Saget Darling isn't an auto executive, a dealer or a supplier. But the collapse of U.S. car and truck sales is afflicting her business all the same. Ms. Darling is publisher of More, a glossy monthly magazine aimed at women over 40. In the past year, she said, many of her automotive advertisers have gone from buying expensive inserts and gatefold covers to single-page ads to no ads at all.

Although she declined to quantify the drop in her magazine's auto ad revenue, Ms. Darling said car companies "have canceled quite a bit of print, and we were a casualty of that."

She has plenty of company. Last year automakers spent $1.35 billion to advertise in U.S. consumer magazines -- a 23% decline from the $1.75 billion spent in 2007, according to TNS Media Intelligence, the largest annual dollar drop in five years. Comparable figures for the first quarter of 2009 were not available.

"The overall bucket is down," said Ellen Oppenheim, chief marketing officer of the Magazine Publishers of America. "Like all businesses, we're trying to maintain business in an industry that is rapidly shifting."

To keep their automotive clients, many magazines are cutting their ad rates and increasingly linking print ad campaigns to digital content and special events, publishers and auto marketers said.

Automakers say magazines remain an essential element of their overall ad strategies. But as marketing budgets shrink and nontraditional media grow in importance, print media continue to recede.

"We've made strategic investments in the last couple of years to greatly increase our spend in internet and experiential marketing, as well as sports sponsorships," said Tim Chaney, marketing director of Kia Motors America. "I haven't been able to grow my print budget as much as I would have liked." Mr. Chaney did not offer specific figures.

Publishers such as Ms. Darling are feeling the pinch. This year, bankrupt Chrysler did not renew its sponsorship of a marathon More sponsors each year. No automotive successor has come forward, costing the magazine $50,000 to $200,000 in revenue, Ms. Darling estimated.

At the same time, she said, More is preparing to launch a redesigned website with a stronger social-networking element. The new site is designed to help automakers get better, faster consumer feedback on product launches. Ms. Darling sees "real opportunity" in attracting advertising from the Detroit Three as they seek to persuade consumers they are moving forward.

Big rate cuts
Many magazines are offering automakers big discounts to keep their business. Tom Peyton, senior manager of national advertising at American Honda Motor Co., said rate cuts of double-digit percentages "are not uncommon."

"The stronger the brand, the better they've been able to hold their margin," Mr. Peyton told Automotive News.

Peter Hunsinger, publisher of the men's magazine GQ, said he has resisted cutting ad rates. Automakers "are trying to get value," he said, "but they know how we work, and they respect our editorial product."

Mr. Hunsinger said GQ has lost ad revenue from both domestic and foreign brands, although he did not provide numbers. "The recession is an equal-opportunity malefactor," he said.

If magazines want to maintain their ad revenue, auto marketers said, they must offer more ways to connect their readers with car companies.

"Print has to work harder than others," said Matt Van Dyke, director-marketing communications for Ford Motor Co. "That means more value-added integrations."

Mr. Van Dyke said an advertising promotion by Ford and Wired sent representatives of the magazine to several auto shows. They described how technology in Lincoln vehicles enabled consumers to make better use of mobile phones, digital cameras and other gadgets. Wired's involvement differentiated Lincoln's show displays, Mr. Van Dyke said.

Edward Menicheschi, publisher of Vanity Fair, said his magazine also is customizing marketing programs for automakers. In February, as part of its coverage of the Academy Awards, Vanity Fair invited 30 film and fashion industry executives and celebrities to a ride-and-drive event for the redesigned BMW 7 Series at Griffith Observatory in Los Angeles.

Nearly half of the event participants sought more information about the 7 Series, Mr. Menicheschi said. A Vanity Fair spokeswoman said she did not know whether any of them bought or leased the car.

Online focus
Along with special events, auto advertisers are demanding more digital content from magazine publishers. Drew Schutte, chief revenue officer at Conde Nast Digital, said the company's automotive-ad sales were up 87% in the first four months of 2009 from the same period a year ago. He declined to provide dollar figures. Import brands account for most of the increase, Mr. Schutte said.

Jeff Hamill, senior VP of Hearst Magazines, said nearly all automakers now want to include digital advertising in their ad packages. That's up from about half a year ago, he said.

A February promotion for the new Chevrolet Traverse crossover involved eight Hearst magazines and their websites. The promotion enabled consumers to contact Chevrolet with questions and comments about the Traverse through a special website.

Honda's Mr. Peyton said his company evaluates its magazine ad spending by measuring return on investment -- how many vehicles an event or a print or an online promotion helps sell within three or four months. "We continue to invest in" media that show a good return, Mr. Peyton said. "Those that don't are the ones that fall by the wayside."

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Laura Clark Geist writes for Automotive News.

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