Traditional Media Loses at Ford

Automaker Shifts Major Chunk of Budget to Relationship Marketing
DETROIT–Ford Motor Co.’s advertising agencies are reacting to the automaker’s decision, announced to media buyers last week, to slash spending significantly 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.
Magazine media reps are calling the shift a “massacre,” but Ford officials said the moves, which include dropping entire ad budgets at several magazines, are 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’s buying for all brands–Ford, Lincoln, Mercury, Mazda, Jaguar and Volvo–is handled by 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 that led to the shift from print, said Kaline.
“There’s a proliferation of media and marketing opportunities which reach consumers,” he said. “Magazines and network TV … are not the only mass media affected.”
Kaline said media buyers who are “making a lot of noise” should “remember they can still be considered should marketplace conditions change. … It is still an evolving situation.”
The losers for 2000 model year include Disney, Hearst, Readers Digest, TV Guide and the major networks, sources said, in favor of spot TV, cable, new outdoor initiatives, direct marketing, Internet and events.
Kaline said Ford is not shifting magazine money to any one place. “Having more choices fragments the budget, just as it fragments the media and the audience.”
“This is a major, major shift in direction,” one buyer said, adding the move may influence others to follow suit. “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.”
Time Inc. and Hachette Filipacchi Magazines, which already had long-term contracts in place, become major Ford partners. Those agreements encompass custom publishing, promotions and Web site programs, as well as traditional advertising.
–with Jeff Green
and Lisa Granatstein