What if Carmakers Stopped Advertising?

Even before receiving a frosty reception on Capitol Hill this week when they asked Congress for $25 billion in government aid, Detroit executives expressed a willingness to give up some of their sacred cows (if not yet their private jets).

General Motors, for instance, said it would not advertise on the Super Bowl in February -- a major concession, considering that it's been one of the three biggest advertisers on the N.F.L. championship game over the last two decades years.

What if that's not enough in these trying times? What if G.M -- and Ford and Cerberus/Chrysler -- stopped advertising all together? Would that be enough to save them? Almost certainly not: It would barely scratch the surface of the money they need. But it would probably kill their sales -- and take a wide swath of the media industry down in the bargain.

In the first seven months of the year, the big three spent $2.8 billion on U.S. media according to a new report from The Nielsen Company. G.M. accounted for $1.3 billion; Ford, $953.3 million; and Chrysler, $592.6 million.

Big numbers, to be sure. But still only 10 percent of the money they say they must have in bridge financing from the feds.

G.M. spent more on media than any other automaker, but its budget dropped 6 percent compared with the first seven months of 2007. Ford, the third biggest spender, and Chrysler, the fifth, each spent 22 percent less on U.S. media.

Meanwhile, Honda, Daimler, Volkswagen and Mazda all spent more. Toyota's budget remained flat.

Over all, the category spent about $6 billion on media in the first seven months of the year. That's a decrease of 10 percent from its seven-month tally in 2007. In all of 2007, automakers spent $12 billion on advertising -- itself an 11 percent drop from 2006. And 2006 spending was down about 1.4 percent from 2005. Quite a slippery slope.

It would take a complete advertising freeze of about 2 years for the industry as a whole -- not just the increasingly small Big Three -- to save $25 billion.

Already this year, automakers have cut $323.7 million from their TV ad budgets, $187.3 million from magazines, and $58.8 million from newspapers.

Maybe automakers should try a low-cost viral approach on the internet. Shiba Inu puppies are almost certainly a lot cheaper than Tiger Woods.

by Willow Duttge

Ad Spending, in Millions, From January Through July

Ad Revenue, in Millions, From January Through July