Magazine Shutdowns, Magazine Layoffs, And The Looming Pullback In Automobile Advertising

Magazine Shutdowns, Magazine Layoffs, And The Looming Pullback In Automobile Advertising
Posted by Jon fine
http://www.businessweek.com/innovate/FineOnMedia/

In recent days, there have been layoffs at Forbes, Time Inc., Conde Nast Publications, Bauer Publishing, The Economist, and Hearst Magazines. In the past 24 hours, Time Inc's Cottage Living ceased publishing, and Ziff Davis Media's PC Magazine killed its print edition to become an all-digital publication.

This brings me to auto advertising. Auto advertising? Yes, auto advertising. Specifically: advertising from Detroit's Big Three. These tattered titans of America's industrial past still spend massive sums on magazine advertising, even after trimming their buys in recent years.

In 2007, GM, Ford and Chrysler spent $807.3 million on magazine advertising, according to the data-miners at TNS Media Intelligence, who provided all such figures in this post. In the first half of 2008-a year characterized by cutbacks in auto spending-Detroit still spent $306.4 million in mags.

Yesterday I appeared on CNBC to talk about the collateral damage that would ensue from Detroit cutting advertising further. Before I did, I called a senior-level magazine executive well-versed in the auto advertising world.

He told me he's expecting the Big Three's ad buys to drop by around 30% in 2009, across all media.

Assuming that the half-year figure for '08 represents half of the car guys' magazine ad spending this year-it may even underestimate it, given that the car companies spend more at certain times of the year-that means that about $183.8 million in ad dollars will disappear for magazines.

Potential complications loom, like, say, the prospect of an imminent GM bankruptcy, and there's a bit of a drama concerning the Big Three playing out in Congress more or less as I type.

(We can only imagine that this is why American Media Chairman and CEO David Pecker today gently nudged his employees to support a government bailout of the American auto industry. This is sort of funny. One of Pecker's great hopes for his major tabloid titles, The Star and nationa Enquirer, would be that they'd eventually attract auto advertising. But it never quite worked out that way.)

Thus, in the past few weeks we have seen severe contraction among magazines. And, while December's already reckoned to be a terrible month for magazines, much of the really bad stuff hasn't even started happening yet.

Sorta silver lining for magazines: TV gets much more advertising from American carmakers: $2.9 billion in '07 and $1.2 billion in the first half of '08.

This excellent Ad Age article--which, unfortunately, might be firewalled--goes into great detail regarding which media properties run the most auto advertising. Short answer: anything having to do with sports, but read the piece to get the full picture.

The Consumer: Terms of Engagement

The Consumer: Terms of Engagement
by Paul Parton


Ah, the perils of a monthly column. As usual, the things that I'm reacting to in early March will seem like ancient history by the time you read this. But, at the risk of seeming redundant, I was struck by Procter & Gamble exec Jim Stengel's keynote speech at the 4A's media conference this spring.

In many ways, the speech was a fairly familiar call for advertisers, media companies and agencies to embrace the consumer more fully. (Specifically, he suggested that marketers and agencies enter into a relationship with the consumer, rather than focusing on selling and telling.)

But a couple of points stood out. First, I hadn't realized that "telling and selling" was a P&G mantra -which explains in many ways why that approach to marketing is so ingrained. What gave me more cause to think, though, was why it's taking creative and media agencies so long to wake up and smell the Folgers.

Why are the traditional approaches to marketing communications still so widespread? Why is there still so much telling and selling? Why is the media industry still driven by buying rather than planning? Why is there still so little focus on the consumer?

Granted, even the most lumbering large agencies (creative or media) will supplement their TV campaign presentation with a little online advertising these days. Hell, they might even present (or at least talk about) viral communication. But at the end of the day, those things are really just repurposed forms of traditional media. A Web banner is usually little more than an animated billboard. Viral recommendations from traditional agencies generally come down to putting commercials online.

These things, though, are examples of media neutrality - or of the idea that it doesn't matter whether you're on TV or on the Web, as long as you connect with the consumer. When agencies endorse this concept, it makes them seem more progressive than they actually are.

Unfortunately, the reality is that media neutrality is the first baby step toward engaging with people the way that people want to engage with brands. Media neutrality is really easy. Because essentially, media neutrality comes down to different forms of the same thing - advertising.

What is significantly more difficult - and yet significantly more important, too - is discipline neutrality.

Being discipline neutral means that you're just as likely to propose a direct marketing solution to a communications problem as you are to present an advertising solution, a search solution or a PR solution.

Discipline neutrality is more difficult to embrace than media neutrality because it demands a working understanding of the strengths and weaknesses of a variety of different communication strategies and the ability to execute them.

Discipline neutrality demands that everything starts with a granular understanding of the consumer how they live, what's important to them and how they engage with the category and the brand. The task, then, is to build a communications plan from that understanding with no preconceived ideas about the form that plan will take or the disciplines or channels that will be used.

Consider, for instance, an agency tasked with jump-starting the sales of a brand of canned soup. The conventional approach would involve creating a TV and print campaign that would, say, extol the benefits of soup as an aid to weight loss. The ads would run in daytime talk shows and women's lifestyle magazines.

The media-neutral approach would be to do the same thing but take it further by sponsoring a segment on "The Biggest Loser," seeding the campaign in weight-loss forums and encouraging bloggers to write about the soup.

The discipline-neutral approach would be to understand how people used the soup and what kind of relationship they had with the brand. It could turn out, for example, that the soup was generally consumed at lunchtime, but only by people with microwaves in their offices. In this case, the discipline-neutral approach could consist of designing a self-heating soup can and launching it with sampling programs at major commuting locations and in city delis.

That kind of approach is the only way brands will ever really be able to develop a relationship with consumers. It's the opposite of "telling and selling." It's understanding customers and finding ways to engage them in a relevant way with genuinely useful innovation. Who'd argue with that?


Paul Parton is the brand-planning partner at The Brooklyn Brothers, a creative collective.