Media Loses Money As Auto Industry Flounders

11 08 2008

I can personally attest to this being absolutely correct.

In the first quarter alone, the auto industry spent $414 million less on advertising than in last year’s first quarter, according to TNS Media Intelligence.

And it’s not just the local newspaper or television station that is hurting from cutbacks in advertising by the local car dealerships.

In recent earnings reports from the major media companies, like Viacom and Time Warner, executives mentioned the downturn in the auto industry as one reason for lagging revenue at cable networks and magazines.

Newspapers were the hardest hit, losing $131 million in auto advertising, much of the decline coming from local dealerships that are having trouble moving cars off their lots.

“You’re talking about cars sitting on lots for 90 days,” said Mort Goldstrom, vice president for advertising at the Newspaper Association of America. “The dealers are saying, ‘I have cars that won’t move. And I can’t advertise.’ It’s because of cash flow.”

Traditional media/old school deadtree folks who deny this is happening make me scratch my head.

I’m telling you, it’s happening. Car lots have always been a huge spender in local newspapers. They aren’t moving cars which means advertising is down because they don’t have the money.

Sometimes, though, I feel like I’m preaching to the choir.

Read the whole thing if you are so inclined.

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11 08 2008
Economic Indicators « Shoot The Moose

[…] August 11, 2008 — Slartibartfast Newscoma has an interesting post about a situation in her biz that’s troubling: because nobody is buying cars right now, car […]

11 08 2008
Mack

The thing is…most large dealerships are still under contract, so they may yet be advertizing even if they would rather not. I have been screaming for years at these morons to establish an online presence….but these guys STILL view the internet as their enemy.

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