How a Smaller General Motors and Chrysler Affects the Media

With General Motors and Chrysler both once again being on the brink of something very bad, thought it was time to look at just how much money would come out of the traditional advertising marketplace if the two, pun intended, tanked — and how much has already come out, given that GM and Chrysler have supposedly been in a milder version of cutback mode for some time. Here’s a BNET Media analysis, based on U.S. ad spending numbers, including local dealer spending, for the two companies provided by TNS Media Intelligence:

General Motors
Spending actually increased in 2008 from $1.6 billion to $2 billion, meaning GM was one of the few media-spending bright spots in a not-so-great year. Spending in television was essentially flat between 2007 and 2008 at $1.2 billion. In 2008, GM took a big chunk out of radio and outdoor, cutting the former by more than 25 percent to $76 million and the latter almost in half.  Magazines and newspapers, as if they can afford it, may lose the most. They both saw their budgets from GM increase substantially in 2008. Magazine spending increased in 2008 by 20 percent to almost $450 million; newspaper spending more than doubled, from approximately $145 million to $320 million.
The bottom line: A lot of the air has already come out of radio and outdoor, though there’s more to go. Worst off is print, particularly because both magazines and newspapers actually saw gains from GM in last year’s tepid economy. TV is anyone’s guess, though the company will likely, in the near-term, be shoveling money onto the airwaves to promote a plan in which GM will cover payments for people who get laid off.

Chrysler (or Cerberus to be particular)
The automaker’s budget decreased across all traditional media between 2008 and 2007, slashing overall traditional media spending by 35 percent to $754 million. It cut the most in newspapers, slashing budgets by 62 percent to just under $50 million and radio by almost 75 percent to just under $9 million. TV spending dropped 32 percent to $800 million; magazines by 52 percent to $90 million; and outdoor by 32 percent to $7.2 million.
The bottom line: It doesn’t exactly qualify as good news, but Chrysler has already cut more than half of its 2007-level spending out of newspapers, radio and magazines. Though none of those media can afford further budget cuts, they’ve felt much of the Chrysler pain already. TV and outdoor have only begun to feel the pain.