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

Posted by: Jon Fine on November 19, 2008

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.

Reader Comments

Alan Ingram

November 26, 2008 5:31 PM

I currently publish a magazine. Mine is digital though. It mirrors one of those magazines you get for free when you leave the grocery store. My market is student driven and its to get students and anyone who wants to be distributed-distributed. I have working journalists and bloggers submitting things to my magazine. I dont have money, Im flat broke, but by doing without cable, house phone, internet (borrowing neighbor's unresticted wifi) I can publish a 12 magazine monthly if I wanted, but I choose to do ever other month. In this economy and digital age, will the big boys like Forbes and Time, Inc do like me and Ziff and go digital? Im paying $7-$10 a page to produce and it doesnt cost me a cent more to have 30 people look at it, versus 31. Now compare that to the cost of physically publishing a 30 copies of a 12 page magazine. You can find my magazine at www.skoolyardmag.com

Brian Ford

December 5, 2008 6:21 PM

There's a twitter feed that is covering this sad trend. http://www.twitter.com/themediaisdying

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The media world continues to shapeshift as new forms arise and old assumptions erode. On this blog, Bloomberg Businessweek will provide sharp analysis and timely reports on the transformation of this constantly changing terrain.

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