GM's Boycott Over 'L.A. Times' Articles Reaches 4th Month

By: Jennifer Saba The General Motors' advertising boycott of the Los Angeles Times, begun in April, is still holding, and it now appears that many GM dealers are following the lead of corporate headquarters, according to Prudential Equity Research. The research firm, which released a note this afternoon, expressed concern that the pullout further "hurts the already challenged" paper.

Prudential estimates that GM is the "number one or number two advertiser" at the Times. On April 7, GM corporate announced that it would no longer run ads in the paper because of a series of negative columns. Since then, GM advertising -- including dealer associations -- dropped sharply in April and May.

Martha Goldstein, vice president of communications at the Times, said the report "inaccurately interprets data" from TNS, explaining that GM Dealer Associations do not reflect the ad spend of individual GM dealers. "While GM corporate is not back," she said, "essentially all local dealers are back in the paper." The Times is still in talks with corporate GM, she confirmed.

Prudential used data from TNS Media Intelligence, which tracks newspaper advertising. The firm notes that the information provided should be read as more of a trend than an actual tally of ad dollars. TNS Media measures advertising using list prices. It does not take into account advertiser discounts.

With that in mind, TNS Media reported that GM advertising in the Times, including dealers, fell 63 percent in April to $940,000 (GM corporate spent $752,000 and the dealers spent $188,000) when compared to the same period last year. May declined even more, 89 percent to $350,000 (GM corporate spent $153,000 and the dealers spent $196,700).

In March, the dealers had spent $724,000.

The April and May GM corporate spend, despite the boycott, could be explained by make-goods or remnant ads.

Prudential notes that a few other automakers have picked up the slack by increasing spending in the paper. Ford and DaimlerChrysler dealers have accelerated their ad buys which helps "soften the blow," the report said. Even so, "no car maker is spending at the levels that GM was spending through the first three months of 2005."

According to TNS Media, GM, including dealers, spent roughly $10.8 million in the Times in January, February, and March. The four other "big auto companies" -- Ford, Toyota, DaimlerChrysler, and Honda -- spent a combined $6.3 million for the same period.