Ford’s Big Media Shift

Ford Motor Co.’s advertising agencies are evaluating how they will be affected by the automaker’s decision–given to media buyers last week–to spend significantly less money on traditional media and focus more on one-to-one consumer marketing.
One estimate has Ford slashing $100 million, or roughly one-third, of its print spending.
Initial reactions by agency executives appear to indicate that the shifting focus is not a surprise and they can easily accommodate it.
Magazine media reps, however, are calling it a “massacre,” since the changes mean a halt to advertising in several major titles.
“All the golf games, all the dinners–it all came to nothing. In the end, it was a strictly business decision and the magazines aren’t making the business case,” one angry rep said.
Ford officials said the shift is part of an ongoing strategy to reach consumers more directly. “What we’re seeing is an overall shift in strategy that is reflective of changing marketplace conditions,” said Mark Kaline, media services manager at Ford’s central media group.
Ford handles its media buying for all of its brands–including Ford, Lincoln, Mercury, Mazda, Jaguar and Volvo–through Ford Motor Media, a unit of J. Walter Thompson, Detroit. National agencies handle media planning and local/regional buying as well as creative. The agencies and the divisions have been involved in the planning process for these shifts, said Kaline.
“There’s a proliferation of media and marketing opportunities which reach consumers. Magazines and network TV, while they are affected by the change, are not the only mass media affected by this move in strategy,” he said.
The losers for 2000-model-year Ford media buys include Disney, Hearst, Meredith, Gruner + Jahr, Reader’s Digest, TV Guide and Newsweek. The major TV networks also lose out, sources said, in favor of spot TV, cable, new outdoor initiatives, direct marketing, Internet and promotional events.
Time Inc. and Hachette Filipacchi Magazines, which already had long-term contracts in place, will become major Ford partners. Those agreements encompass custom publishing, promotions and Web site programs as well as traditional advertising.
“I wouldn’t characterize this as dramatic,” Kaline said. “It’s something that’s been happening gradually.”
But media buyers worry that Ford’s decision could influence other advertisers. “This is a major, major shift in direction, no matter what anyone says,” one buyer said. “What if this is only the tip of the iceberg? Companies will see that Ford doesn’t have to advertise in Newsweek and wonder why they should. This could clearly be the beginning of a trend.”
Bob Mancini, executive director of Ford Motor Media at JWT, said the shift is a “good, sound business decision based on what’s happening in the marketplace.” But for some people, change is difficult. “Share of advertising dollar is very important to the media community, and any time you have any departures from historic patterns, people start getting a little antsy,” he said.
Ford is hardly alone in looking for ways to get closer to the consumer, said Arthur “Bud” Liebler, DaimlerChrysler’s marketing senior vice president. Five years ago, only about 5 percent of the DaimlerChrysler media buys were in nontraditional outlets. Now that number is approaching 25 percent, he said. DaimlerChrysler met with 400 media reps two weeks ago and had a similar message about the need to embrace new approaches to customers.
General Motors has long emphasized relationship marketing and reaching consumers in unique ways. Its shifts away from traditional media have prompted its national agencies to create new units focusing on interactive and events marketing.
–with Jeff Green
and Lisa Granatstein