The deal starts this quarter and is designed to be a year long. It operates within an incentive framework across all of Tribune's portfolio-"A dollar is a dollar wherever it goes," according to an executive familiar with the deal-with the carmaker reaping unspecified rewards should Tribune's market share of GM advertising increase. The automaker retains the right to negotiate with individual Tribune properties and the precise placement of its dollars is at its discretion.
"We have no Tribune deal to talk about at this time," said Michael Browner, GM executive director of media and marketing operations, through a spokeswoman. Dave Murphy, president of Tribune's cross-platform ad sale unit, Media Net, declined to comment, as did Richard Sirvaitis, president-CEO of General Motors Mediaworks in New York.
Spot TV and newspapers are typically used by automakers to drive customers to dealerships with up-to-date incentives, although in kinder economic times than today branding ads were more common on spot TV. Tribune's newspapers include the Los Angeles Times, Newsday, and the Chicago Tribune, and its WB-affiliate stations are in markets including Los Angeles, New York, Chicago, and Atlanta.
GM spent at least $500 million on spot TV and newspapers in Tribune media markets in 2000. Figures from Taylor Nelson Sofres' CMR peg GM spending in Tribune newspapers and spot TV that year at around $76 million. (Persons familiar with the industry estimate Tribune's market share of GM advertising for those media across all of its markets to be between 10% and 15%.)
On Jan. 16, C.J. Fraleigh, GM's executive director of advertising and corporate marketing, told the Automotive News World Congress "we are shifting significant dollars from national to regional advertising."
Tribune Media Net has performed below its initial goals, which were to deliver to its parent company between $40 million and $50 million in incremental revenue last year. Instead, it ended the year delivering about $30 million. "They were talking about much bigger numbers, initially," said Steve Barlow, an analyst with Prudential Securities, New York. (In March of 2001, Business Week reported that John Madigan, then-Tribune CEO, expected incremental revenue gained via Tribune Media Net to hit $200 million by 2005.)
Still, Mr. Barlow said, "if they get GM, it would certainly be a big win, and a validation of their strategy."