GM's decision to yank tens of millions of dollars in ads from Tribune Co.'s Los Angeles Times fanned concern over how some marketers leverage their ad budgets to influence how their companies and products are treated in the press.
Editorial- and ad-side executives, however, point to a grim reality. Many publications pull their punches before they even begin coverage of a major advertiser. Years of an advertising drought have left media outlets well-trained in market realities.
"It's a generally known principle, sort of subconsciously," one print executive said, "that if you have a big advertiser you are not going to do something that's critical [of them] in your editorial coverage."
GM and its West Coast affiliated and independent dealer groups are pretty big advertisers for the Los Angeles Times, accounting for 4% of its total ad revenue. An Ad Age analysis of TNS Media Intelligence data shows GM, its regional dealer ad groups and individual dealers spent a total of $61.6 million in the Los Angeles Times last year, of which the automaker itself spent $21 million. GM alone accounted for 1.4%. A Los Angeles Times spokesman and a Tribune Co. spokeswoman declined to comment on any financial aspects of the situation.
Late last week, GM pulled ads from the nation's fourth-largest daily because "we were receiving a lot of strongly voiced objections from our dealers in California and people inside," said a spokeswoman, citing concerns over "a kind of rollup of their coverage over quite some time."
It's hard to characterize the Times' GM coverage. Its Pulitzer Prize-winning car columnist Dan Neil last week called for the ouster of Chairman-CEO Rick Wagoner; in the same column, he wrote that before Global Vice Chairman Bob Lutz's reassignment, he was ready to suggest the company "dump Lutz." Earlier this year, Mr. Neil characterized the thinking behind a Hummer partially powered by hydrogen with the memorable phrase, "anything to paint this pig green is a help."
NO GREAT SHOCK
But, as Slate.com correspondent Mickey Kaus pointed out, the Times' decidedly positive late January article from James Flanigan was headlined "GM's Recovery Still Revs Despite Fears of Stalling." Through a spokesman, John Carroll, editor of the Los Angeles Times, declined an interview request, and Mr. Neil did not respond to messages.
The situation did not surprise some key editors.
"If your primary responsibility is to the reader but your primary economic return is not from the reader, at some time this will come into conflict," offered one former newspaper editor. "If GM doesn't like it, they have no obligation" to stay with a publication.
"From their point of view, it's perfectly legitimate," said Mark Whitaker, the top editor at Newsweek and president of the American Society of Magazine Editors, an organization with a history of defending threats to editorial integrity. GM's move, however, comes at a time when "I haven't seen a huge increase" in situations where advertisers threaten to pull ads over coverage issues, Mr. Whitaker said.
Past comments from Mr. Lutz show GM has long been willing to tie its ad budget to editorial coverage. In 2003, he told attendees of the Magazine Publishers of America conference the car giant might not look kindly on "biased" reviews and said it reserved the right to determine where to deploy its ad dollars. "Why should we feed the hand that bites us?"
A magazine representative familiar with the automotive market called GM's move "very short-sighted. The truth of it, a month from now, GM is going to need The L.A. Times." This rep said car companies are notorious for threatening to pull ads when displeased with coverage. Still, in 1993, when "Dateline: NBC" staged a crash involving a GM vehicle, the automaker redeployed its $160 million ad spend on NBC toward non-news programs on NBC rather than pull out.
Fellow Detroit execs, however, were sympathetic to GM.
Dave Rooney, Chrysler Group's director-media operations and cross-brand marketing, said, "We would not actively trade advertising for favorable editorial." But he added, "any advertiser has the right to put ads where they want, and they should put them in a favorable environment."