After a wretched 2001 for car advertising, publishers are pinning their hopes on ad-dependent new vehicles and an expected return to brand advertising. A 2002 recovery, however, is unlikely for the category.
"I am more optimistic about the long term 2003," says Jack Kliger, president-CEO of Hachette Filipacchi Media U.S., which publishes Car & Driver and Road & Track. "I am less pessimistic about the second half [of 2002]. We're ... pitching hot, hard and heavy."
Last year, automotive ad pages in magazines fell 11% to 19,837.1, while ad revenue dropped 2.5% to $1.7 billion, according to Publishers Information Bureau. That translated into major pain for magazines since automotive was the leader in spending among the 12 categories that PIB watches, and No. 2 in ad pages.
No jump-start materialized in January 2002, as automotive ad pages were down 17.7% to 991.7 and revenue down 19.7% to $85.9 million vs. a year ago, according to PIB. Hachette says Car & Driver and Road & Track ad pages dropped a combined 4% in January through April 2002. That beats full-year 2001, when, according to PIB, ad pages dropped 14% at Car & Driver and 4.6% at Road & Track. Despite the falloff, Car & Driver added four editorial pages in January.
Hopeful magazine executives say they`ve heard some bullish talk from auto executives. Much of that has to do with new vehicles, which require heavy brand advertising and lend themselves to the magazine format-much more so than the price message of late last year. Launches include BMW of North America's redone 7 Series out now, American Honda Motor Co.'s redone Civic Si in March and Ford Motor Co.'s redone Ford Expedition in May. This summer, General Motors Corp. rolls out the Hummer H2 and its Saturn Corp.'s new Ion.
UP TO 25% OF CHRYSLER MIX
A spokesman for DaimlerChrysler's Chrysler Group says magazines will continue to account for 20% to 25% of the automaker's marketing mix, but the strategy is being retooled to put additional emphasis on event marketing; event and relationship efforts this year will account for 15% to 25% of the mix. Bcom3 Group's GM Planworks, Detroit, declined comment; WPP Group's Ford Motor Media didn't return phone calls.
In response to lower auto ad sales, Road & Track is wooing non-auto advertising, and Car & Driver is offering better rates to advertisers that make buys in both the magazine and its Web site. Last month, Hachette unveiled its first promotional ad effort backing the two titles. The campaign, created in-house, includes ads in trade publications and e-mail blasts to more than 1,000 influential automotive and ad executives.
The news is better for Primedia's auto buff books. The company says Motor Trend saw a 5% increase in auto ad pages during the first four months of 2002, and Automobile Magazine was up 7%; for 2001, PIB says overall ad pages were down 8.5% in Motor Trend and 21% in Automobile. Strength in the auto aftermarket category enabled Hot Rod to close its first $1 million single issue in April 2002. Primedia's broader-reach titles have been slower to recover, says John Loughlin, president-CEO of the company's Consumer Media & Magazines Group.
"There is volatility month to month, but for the quarter, we're encouraged," Mr. Loughlin says. "If I were running a large portfolio of general-interest men's magazines, I would be somewhat less positive, more uncertain."
Time Publisher Ed McCarrick counters: "In times like these, the enthusiast books are a luxury, not a staple." Automotive is the largest ad category for Time Inc.'s newsweekly, and car ads dropped 10% in the first quarter, which is an improvement over full-year 2001's 20% decline in overall ad pages at Time. Mr. McCarrick believes carmakers will continue to look to Time to establish brand equity for their products.