Automotive Report: Keeping Pace

Automakers are expected to roll out as many as 60 new models or revamps this year, but magazine publishers—even those that count auto ads as a major piece of their business—may not necessarily see a windfall of ad dollars from that flurry of new-business activity. Some magazines are predicting more robust auto business than others. But most concur the scores of new product Detroit and the foreign markets are pushing won't lead to dramatically souped-up auto dollars. "I'm not predicting it will be a banner year for auto advertising—it will be a solid year, automotive will be up in our magazine, but we're not looking at it as a breakout year," says Dave Morris, publisher of Time Inc.'s Sports Illustrated, one of the most popular destinations for automakers. This, from a magazine whose auto ad pages through March of this year were up a healthy 9 percent compared to 2003, with most of that business coming from domestic manufacturers, according to Morris. SI's popular swimsuit issue this year alone scored 24 auto pages compared to 15 last year. The issue included four gatefolds, including a front-of-the-book spread for Pontiac's GTO launch and a multipage appeal for the new Ford GT that appeared smack in the middle of the famed fiesta of flesh. Other launches appearing in SI include the new Mazda RX-8 and 3 Series and three Dodge rollouts: the Ram 1500 and Durango pickups and the Magnum sport wagon. Morris explains that a rash of launches doesn't necessarily translate into increased ad dollars for publishers, however. "Magazines that got great share just by showing up are going to be in for a rude awakening," he says. "It's not like there's this tsunami of cash coming our way." Publishers and media buyers warn that magazines also are not likely to reap greater business because of the car companies' well-documented frustration—now that the upfront sales season is once again upon us—with the broadcast networks' ever-steeper CPMs, even as their prime-time audience numbers continue to dwindle. "Old habits are hard to leave when it comes to media—TV and the upfront are a habit," says Don Heth, president of Heth & Associates in Detroit, which reps magazines such as Family Circle, Vibe and Outside. "Everybody I talk to is rolling their eyes and saying 'not again' about the upfront," says Ed Abramson, vp/publisher of Hachette Filipacchi Media's auto group, which includes Car and Driver and Road & Track. "There are only so many hours in the day—the more people who want to buy TV, the more competitive it gets." Meanwhile, car makers are reevaluating the money they're spending on TV, the ratings and demos, and concluding that they can get better efficiency elsewhere. Magazines may stand to "get a little"—but what seems certain is that broadcast won't sustain the levels of auto business they've become accustomed to, says Abramson, who expects continued growth in Internet and "ride-and-drive" promos that let consumers get up close and personal with the product. "I think some of the manufacturers are realizing that the TV audience is becoming more elusive and certain demos and audience are more difficult to reach by TV," says Steve Rousseau, group publisher of Primedia's consumer auto group, which includes Motor Trend and Automobile magazines. He predicts the group will see the year end anywhere from flat to 6 percent ahead of 2003 in auto pages. "I think TV will get their fair share of dollars," says SI's Morris, who predicts, however, that the nets will not get the rate increases they're looking for. Eroding network viewership will continue to benefit megacirculation magazines like the 3.2-million circ SI, he adds, as automakers have fewer broad-reach vehicles from which to choose. Morris notes that Ford is selling only 3,000 of its new GT model this year and, for maximum efficiency, favored venues like SI and the Super Bowl to promote the car. Publishers like SI also continue to forge marketing partnerships with key auto advertisers. Pontiac GTO sponsored this year's SI Swimsuit Party Webcast and Toyota signed on to sponsor the title's coast-to-coast 50th anniversary tour. The sheer number of launches and revamps will actually work against any single publisher seeing a great uptick in auto business, says Mike McHale, senior vp/group media director at Optimedia. "There are so many cars coming out, and so many niche categories, not all cars are bumping up against each other in all books," he says. Another broad-reach Time Inc. weekly, the 3.6-million-circ People, will also enjoy greater auto business this year; its auto pages are expected to best last year by 8 percent, says publisher Kathy Kayce—even though she reports seeing "budgets definitely getting tighter, even for new car launches for print." Interestingly, People, despite its large female following, made the plan for the launch of the Ford F-150 pickup truck on the strength of its weekly exposure to 12 million men, according to the magazine. Kayce expects People to get a bump in auto business—specifically luxury auto—with the May launch of a national edition targeted to upscale demos, People Select, which will have a 750,000 rate base and target readers with an HHI of at least $115,000. What's for certain is that 2004 is one of the biggest years for auto rollouts. "There's never been a time like this in the domestic field in the number of launches," Heth says. "It's the year of the car, and will be the year of the car for the next couple of years." Through February, magazines sold a total of 2,153 ad pages and raked in $232 million from the category. In 2003, publishers sold 19,812 auto pages and took in $1.88 billion from Detroit, compared to 17,929 pages and $1.63 billion in 2002, according to TNS Media Intelligence/CMR. "It's an exciting year in the auto industry," seconds Time magazine worldwide publisher Ed McCarrick, another one of the biggest destinations for auto marketers. But McCarrick is quick to point out: "All of us recognize that the budgets within the marketplace are not growing as fast as the number of launches. . . . It's not like the days of yesteryear, where there's a launch and a newfound bundle of money." Greg Osberg, worldwide publisher of Newsweek, reports that through February, the magazine's auto pages ran 40 percent over last year; he projects year-end page numbers will be some 20 percent up. "In the design area, Detroit is really accelerating a lot of redesigns—whether launches or re-launches, there will be a tremendous amount of activity," the publisher says. Among the automakers with a gaggle of launches: General Motors has a range of new products, most of which are likely to use magazine in at least some capacity, reports Mary Carpenter, COO of GM Planworks, the agency created to develop media plans for GM nameplates. Some major launches from GM include the Pontiac GTO and mid-sized G6, the Cadillac STS, the Hummer SUT utility/pickup and, from Chevrolet, the smaller-sized SUV Equinox and the SSR pickup roadster. "We continue to believe in the power of magazines as a medium, which is why GM has been leading the charge in calling for reform of circulation practices," Carpenter says. "Our goal is to connect GM brands not only with a target audience, but with the emotional territory that characterizes the division. With their powerful relationships with consumers, magazines can help us in that regard." Along with all the new car models come a couple of new enthusiast titles aimed at the auto lover. Hachette Filipacchi last month launched, under its Road & Track banner, a test issue of Speed, devoted to the high-performance market and geared to the younger auto enthusiast. The premiere issue, with 27 ad pages, carries spreads promoting launches including Nissan's SE-R sedan and Mazda's MX-5 Miata. Next, Hachette is prepping the test of another book aimed at the Fast and the Furious set called Boost. Overall, Hachette's auto group is "looking at a fairly healthy year" that likely will match last year's automotive business, reports Abramson. Save for those automakers at the very highest levels (Bentley, Lamborghini), Abramson says, "You can pretty much rest assured everybody from Kia to Mercedes—and everybody in between—will be in the magazine." Tony Case is a contributing editor to Mediaweek.

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Automotive Report: Keeping Pace

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