100 LEADING NATIONAL ADVERTISERS;MEDIA OPTIONS DRIVE CARS INTO STRONG REGION SPENDING

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Cavalier is the mainstay volume seller for Chevrolet dealers in most of the country. But in Oregon, such compact cars draw little consumer interest; Chevy pickups and sport-utility vehicles are favorites there.

Toyota dealers in Pennsylvania have success addressing "Buy American" sentiments in ads by connecting Camry's assembly to Kentucky. In California, flag waving isn't an issue.

It's these differences that drive a steady growth in regional ad spending in the automotive category, says Jim Callahan, research manager for Dohring Co., an auto marketing consultancy. "In some ways, it's easier to justify regional advertising than broad national campaigns," he says.

The regional pot includes dealer association media advertising of $1.05 billion, up 9.9% in 1994, and to a lesser extend $2.4 billion in media spending (up 8.6%) from individual dealers. This compares with $5.1 billion in media placed directly by auto manufacturers, up 22.5% as new-vehicle sales rose to 15.1 million units, up 8.4%.

Those figures don't include below-the-line spending for sales promotion and direct-marketing activities. National Automobile Dealers Association says dealers spent $4.3 billion on advertising and sales promotion in 1994, up 6%, with 54.1% of that directed into newspapers.

Growth of ad association funds has driven up TV's share of the dealer ad pie, reaching 17% in 1994. Most individual dealers can't independently afford the costly ad rates of TV.

With so much money at stake, the issue of control creaps in, often provoking tension between dealers and national marketers.

"The manufacturers have taken dealers' money and assumed control because it's an easy way to increase [national brand] budgets without dipping into their own pockets," says Ramsay Gillman, a Houston megadealer.

The proliferation of media choices also has helped drive manufacturer interest in controlling regional ad messages, says Frank Ursomarso, a Wilmington, Del., dealer with Pontiac, GMC, BMW, Honda and Jaguar franchises.

Dealers regard the money as "redirected" because it comes from funds the manufacturer assesses the dealer on each vehicle delivered, usually about $150-$200 per domestic vehicle.Most of this money goes to fund regional advertising by an association, with lesser amounts earmarked for individual dealers.

Some importers advertise regionally but not through ad groups. Nissan Motor Corp. USA put more than 60 associations (with 33 agencies) out of business in 1989 by ending the per-car assessments, turning instead to national agency TBWA Chiat/Day to produce regional creative to support national objectives. American Honda Motor Co. in 1994 consolidated 81 regional Honda accounts (served by 50 agencies) at national agency Rubin Postaer & Associates' Alpha Group.

The attempt by General Motors Corp. over the last year to revamp its regional advertising illustrates how national marketers are exerting greater control. GM Chairman John Smale has been pushing for "one voice" advertising in which regional efforts support and complement national messages.

Chevrolet responded by providing extra funds to 12 dealer ad groups that agreed to hire national agency Campbell-Ewald for a year's test. This fall, Chevrolet will survey dealers in the test groups to determine the fate of the initiative.

"There are so many emotional hurdles to overcome in convincing dealers to use the factory agency," says Jeff Hurlbert, Chevrolet's general marketing manager. "Once dealers understand that Campbell-Ewald has set up a completely separate group, then some of the barriers start to break down."

Pontiac, Buick, GMC Truck and Oldsmobile took a different tack, setting up committees of factory and dealer representatives to develop a menu of approved agencies. Dealer ad groups then hire one of the approved agencies to get matching funds. Oldsmobile now has seven approved agencies, a reduction from 85 regional shops as recently as 1992.

Mr. Ursomarso says dealers haven't resisted the GM moves, in part because they are more concerned with pricing and margins. The new system "in some ways has made dealers' lives easier" by prescreening agencies, he says.

"But an association, like a dealer, must know what it's trying to accomplish," Mr. Callahan says. "It's a great chance to address the needs in a particular market, but it's an opportunity that can be squandered."

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