Ford signed contracts with Time Inc. and Hachette Filipacchi Magazines covering at least two years. Other publishers signed a more traditional one-year contract, industry executives said.
Executives at Time Inc. and Hachette declined to reveal the value of the multimillion-dollar contracts, but for Hachette the deal is the largest multiyear contract with a single advertiser ever signed, said one executive at that company.
ALL BRANDS INCLUDED
"The partnership extends beyond pages" and includes the Web, custom publishing and other programs, said David Ropes, director of corporate advertising and integrated marketing at Ford. He added that the pacts mark the first multiyear publishing deals across all Ford brands, including Jaguar and Mazda.
In exchange for guaranteed volume, Ford will be protected from rate increases during the life of the contract.
"You have to give to get," saidDave Long, president-media sales and marketing, Time Inc., whose titles include Time and People.
"Just like in the broadcast upfront market," said David Pecker, chairman-CEO of Hachette, "we know what the commitment is for the next 24 months. And when the stock market takes a dive of 240 points, it's good to know that you have that foundation of business guaranteed."
Hachette's magazines include Car & Driver, Road & Track and Woman's Day.
The Big 3 U.S. car marketers traditionally shied away from multiyear deals with publishers. But Ford is clearly changing its strategy for buying magazines.
The Ford Division is said to be sharply reducing the number of spreads it buys in favor of more single-page ads, a strategy championed by new Marketing Communications Manager Janet Klug.
GM MADE SIMILAR MOVE
Rival General Motors Corp. early this year made a similar move, in part because it questioned whether spreads were more effective than single pages.
Of Ford's move, one Detroit-based magazine sales executive said: "They'll do spreads in certain cases, but it will be the exception, not the norm."
While another Detroit sales executive said "everyone took a 50% cut" in total pages as a result of the change, three consumer magazine publishers who requested ano-nymity said Ford bought more page units to offset the loss from the reduction of spreads.
"Ford is great at not cutting spending if they don't have to," said one of these publishers.
Ford spent $179 million in magazines during the first half of 1998, up 16.8% vs. the same period last year, according to Competitive Media Reporting.
"We're just trying to be smarter," said Ford's Ms. Klug, who declined to discuss specifics about the automaker's magazine strategy.
The auto industry has faced overall weaker demand this year, leading to generous incentives. U.S. unit sales of all Ford Motor brands rose 1.4% to 2.81 million through August, according to Automotive News.
A Ford insider said Lincoln Mercury Co. moved from spreads to page ads last year; spreads now account for just one-third of the division's print buy.
Bob Mancini, senior partner-executive director of Ford Motor Media, the marketer's dedicated buying agency, said decisions to buy spreads or single pages are made on a brand-by-brand basis. "What one brand does doesn't affect another."
Whether publishers that didn't sign multiyear contracts will lose some Ford business isn't clear. Michael Clinton, Hearst Magazines' VP-corporate ad sales, said that publishing group noticed some softness in its men's titles when Ford's truck division moved from spreads to pages.