Media Outlets Losing Money From a Lack of Auto Ads

http://www.nytimes.com/2008/08/11/business/media/11auto.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1219429568-uVAy+yEJP1QsmYtZkL1DEg
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.”

For the year, auto advertising dollars flowing to media outlets could decline by close to $3 billion, according to Sanford C. Bernstein & Company, to about $15 billon for the full year. Auto advertising peaked at close to $24 billion in 2004. Auto sales are at their lowest since 1993, according to Sanford C. Bernstein.

According to the newspaper association’s own data, the share of newspaper advertising from automakers is shrinking rapidly: in the first quarter, auto advertising represented just 2.8 percent of all national advertising in newspapers. As recently as 2005, the figure was more than 10 percent each quarter.