Carmakers leave it in neutral

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Advertising executives at carmakers and their agencies predict a calmer TV upfront than past years as far as the auto industry is concerned.

"A year or two ago, the market was so tight you had to jump on things in the upfront and hold onto them," says Scott Fessenden, marketing director of Nissan North America's Nissan Division. "Our sense is because of the economy, [the upfront] won't be as competitive as last year."

Detroit's Big 3-General Motors Corp., Ford Motor Co. and Chrysler Group-won't be as frantic trying to get as much upfront weight as in past years, predicts David Martin, president of Omnicom Group's PentaCom, Troy, Mich. PentaCom is the dedicated global media planning and buying agency for Jeep, Dodge and Chrysler, and buyer for DaimlerChrysler AG's Mercedes-Benz. DaimlerChrysler spent $276.6 million on network TV in 2000, down from $286.5 million in 1999. "The impression I get is the auto companies have already set their strategies. My bet is every agency that works for one of the Big 3 [carmakers] knows exactly how deep they want to go now."

PREDICTS FLAT RATES

Mr. Martin predicts the upfront rates will be flat vs. last year. So does Bob Flood, senior partner-director of national electronic media at Publicis Groupe's Optimedia International, New York, which handles BMW of North America. Unlike past years, the networks themselves don't have a good handle on advertisers' budgets, he says.

Steve Sturm, VP-marketing at Toyota Motor Sales USA's Toyota Division, expects upfront rates to drop by a single-digit percentage vs. last year and in 1999. "The economy has slowed down and the demand for advertising inventory is down," he says, citing the demise of many dot-coms, which were heavy TV buyers, and the lack of major national elections.

Yet Mr. Sturm sees a lot of hesitancy in the marketplace now. Both advertisers and networks are taking a wait-and-see position as they try to prepare for the possibility of a TV actors strike later this spring.

Mr. Sturm figures there will be a lot of reruns, quiz shows, movies and reality programming in the event of a strike. His concern is whether viewers would tune in during a strike and, if not, whether they'd return afterwards.

Toyota still has vehicles to launch in the fall, so "we have to be on TV," Mr. Sturm states. "We have to prepare for the best and worst scenario." Toyota is working with Publicis' Saatchi & Saatchi, Torrance, Calif., and Zenith Media, New York, (also half owned by Cordiant Communications Group) on an alternative plan if there's a walkout. He didn't give any clues as to what those plans might be.

BIG LAUNCHES

Key fall launches include: the next generation of Toyota's Camry, the best-selling small car in the U.S. from 1997 through 2000; the Saturn Vue, the first sport-utility for that General Motors Corp. unit; Chrysler Group's 2002 Dodge Ram pickup, its first major redo since the 1994 model year; and Nissan's 2002 Altima sedan, its first major facelift since the 1998 model year.

"Many car companies use TV as their primary medium, so if a strike should happen, there could be a redistribution of the media mix," speculates Mr. Flood of Optimedia.

BMW, which posted record unit sales in the first quarter of 2001, likes to advertise during premium programming like NBC's "The West Wing" and "E.R.," and probably wouldn't be interested in reality or game shows like ABC's "Who Wants to Be a Millionaire" if there's a strike. Car advertisers wanting to target women during a strike would have to either move money into cable TV or other media.

John Matlock, senior VP-sales at Lifetime Television for Women, says so far he's had no requests from automakers for lower prices. "Value isn't always the cheapest," he says, suggesting Lifetime is raising rates. He's optimistic the carmakers will come to the cable network, citing Lifetime's rise to the top-rated cable network in the first quarter of the year. Car advertising by Detroit's Big 3 on Lifetime has swollen by more than 300% in the last six years, Mr. Matlock estimates.

Mr. Flood says any voids created in TV upfront buying by the Big 3's retrenchment will create opportunities for competitors.

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