Other Auto Marketers Also Nix New Show's $50 Million Price

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DETROIT ( -- Chrysler Group won't be back as the automotive sponsor for the second season of NBC's popular reality show The Apprentice, according
Chrysler has bailed from the next season of 'Apprentice' sponsorship.
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Companies Recoil From TV Upfront System; Plan Shift to Cable, Online, Outdoor

to several executives close to the car industry.

Although other automakers were approached, none stepped up to the plate to succeed Chrysler because the asking price was too high -- at least $50 million. Over at News Corp's Fox, Ford Motor Corp. said no to a third year as sponsor of a commercial-free premiere of 24.

Pickier and sophisticated
In one of the most competitive sales years for the auto industry, the marketers have gotten pickier and more sophisticated in the way they approached this year's TV ad buying bazaar, known as the upfront. The upfront landscape also felt the impact of the rising prominence of purchasing gurus at certain car companies and their return-on-investment formulas, executives say. And much like other major advertisers, the automakers have dialed up nontraditional marketing.

Chrysler declined to comment on The Apprentice, but said it will spend more in 2004 than last year across all media. NBC, owned by General Electric Co., didn't return calls. A higher asking price for a proven winner certainly isn't unusual and the network is doubling the number of episodes to 26 for next season.

General Motors Corp. was more selective in re-upping major upfront deals, according to two other executives. The automaker has committed millions of dollars this quarter as both a major U.S. Olympic team and NBC media sponsor for the games broadcast from Athens next month.

GM: satisfied with upfront
GM is spending about the same as last year in the upfront, a GM spokeswoman says, adding: "We have and continue to invest heavily in cable -- something that has happened over time as we have followed the viewing patterns of new car and truck purchase intenders." The auto giant is "largely finished and satisfied with the [upfront] negotiations."

While several major carmakers, including Toyota and Nissan, joined the chorus of big spenders earlier this year complaining of skyrocketing annual rate hikes by the broadcast networks, three actually increased spending in the first quarter of 2004. The figures could be an indicator of how the car companies approached this year's upfront negotiations.

Spending figures
GM, DaimlerChrysler and Toyota Motor Sales USA were among six leading automakers that spent more in national broadcast network TV in the first quarter vs. a year ago, according to TNS Media Intelligence/CMR. GM's tab rose by only $7 million from a year ago to $215 million, while DaimlerChrysler increased to $103 million from the $74 million it spent in the first quarter of 2003, according to CMR. Toyota and its luxury brand Lexus spent $9 million more.

American Honda Motor Co. cut its presence on the broadcast networks by $8 million to $21 million in the first quarter. Nissan North America's spending dropped by $12 million vs. a year ago, according to CMR. Ford Motor Co. spent $120 million in the first quarter, $4 million less than a year ago.

Ford not only is passing as sole sponsor of 24, it also gave up prominent product placement in the show. But the marketer returns as a sponsor for the network's popular American Idol. (Ford did not return calls by press time.) Jon Nesvig, Fox president of sales, says the premiere won't be commercial free.

GM is negotiating with the production company of 24 for placement only, executives say. The GM spokeswoman would not comment other than to say, "We don't have a product placement deal with 24, but we're always looking for good opportunities with new and existing shows."

Mitsubishi Motors North America didn't participate in the upfronts, said Ian Beavis, senior vice president of marketing, product planning and public relations. But the automaker had a product placement deal on NBC's The Restaurant, which is currently on hiatus. Mitsubishi is also the exclusive automotive sponsor for reruns of Sex and the City on the cable network TBS.

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