Is Auto Permanently in Reverse?

By: E&P Staff Anyone closely following newspaper classified advertising revenue knows that the automotive category started its descent years ago. Partly due to the migration online and partly due to woes of the auto industry at large, dealers aren't spending what they used to. The category has been falling quarter after quarter, year after year since 2004, according to the Newspaper Association of America.

The New York Times' Tim Arango and Stuart Elliott report that the auto industry has been sharply dialing back its advertising spend down $414 million in Q1 compared to the same quarter last year. Newspapers felt the pain the most, with a loss of $131 million.

For national advertising, it's even worse: Arango and Elliott report that in 2005 auto advertising (typically dollars spent by OEMs) represented 10% of the national category; now it's down to 2.8%.

The one semi-good piece of news is the report suggests the downturn in auto advertising is more cyclical than secular. "If the economy were better, newspapers would be better, and we'd be having a slightly different conversation," Mort Goldstrom, vice president of advertising at the NAA, told the New York Times.