Ad money is shifting

A final decision isn't expected until fall, but it's likely the National Automobile Dealers Association (NADA) will start paying more attention to the dealer advertising dollars that are spent on Internet and direct mail advertising.

That's because the catch-all category "other" in NADA advertising surveys has been growing steadily over the last decade from 11.6% in 1988 to 16.6% in 1998, according to the latest NADA figures.

That's an increase of 77% from 1997 and the fastest growing advertising category that NADA tracks. It means dealers are spending as much on things like Internet and direct mail as they are on television, and the category is growing several times faster than the biggest dealer advertising expenditure, newspapers.

When you're talking about a share of $5 billion in advertising, it can be a powerful force in the shaping of local and regional advertising markets.

Beyond that, the automakers themselves are shaking up the advertising landscape with shifts of their own that signal a new way of thinking about non-traditional media.

In July, Ford made a dramatic shift in its ad spending, possibly affecting $100 million in spending, away from traditional media magazines toward more integrated, new advertising outlets. Adversely affected magazine media reps called it a "massacre."

But Ford Motor says its decision to cut advertising from several major magazines is part of an ongoing strategy to reach consumers more directly.

Among the big losers for 2000 Ford media buying were Hearst, Meredith, Newsweek, Readers Digest and TV Guide with a shift in favor of spot TV, cable, major new outdoor initiatives, direct marketing, Internet and one-to-one marketing, says a media buyer who attended the meeting.

The Time Inc. publishing group and Hachette Filipacchi Magazines, with long-term contracts in place, became major Ford partners.

One estimate has Ford shifting a third of its spending, which was $310 million in 1998, estimates Competitive Media Reporting, which tracks advertising spending.

Ford executives downplay the significance.

"It's fair to say new opportunities are coming at the expense of, while not any one media, but traditional mass media in general," says Mark Kaline, Ford manager of media services.

"But I wouldn't characterize this as dramatic. It's something that's been happening gradually. Now in print we have a core group of publishing partners that are being emphasized."

The emphasis is toward more direct relationship activities, Mr. Kaline says.

Ad buyers react less calmly.

"This is a major, major shift in direction, no matter what anyone says," one buyer says. "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."

But Ford is hardly alone in looking for ways to get closer to the consumer, says Arthur C. "Bud" Liebler, DaimlerChrysler marketing senior vice president.

Five years ago, only about 5% of the DaimlerChrysler media buys would have been in non-traditional outlets. Now it's approaching 25%, he says.

DaimlerChrysler met with 400 media reps and had a similar message about the need to embrace new media and new approaches to customers that go beyond the pages of magazines or commercials on TV. But Daimler Chrysler, like it does with other suppliers, is approaching the shift, for now, as a partnership.

"The bottom line is we need ways to get closer to our customer and we want to work with (media partners) to get there," Mr. Liebler says. "There is a radical shift underway, that is clear."

Nearly every major campaign has a heavy component of direct mail, Internet and grass roots organization that dwarfs past efforts.

DaimlerChrysler has already hit more than 100,000 people with the PT Cruiser message and the first one hasn't even rolled off the assembly line.

Ford's Focus campaign will have heavy "street" components with 120 trendy opinion leaders in key markets getting a loaner to drive - in addition to other efforts to get the message out at the most basic level and avoid the clutter of traditional media.

The bottom line is that advertising is getting way too crowded. The number of "messages" a viewer gets on TV in an hour has passed 40 and automakers and dealers will increasingly need to go directly to the consumer to get their message heard.

If NADA has an "other" category in the future, it might just be for traditional advertising.

Jeff Green is a senior reporter and Detroit bureau chief for Brandweek magazine, a New York-based publication following advertising and marketing trends. He's at 248-680-8446 or at [email protected]