In the short term, the GM filing is likely to hit already struggling TV stations and newspapers the most dramatically, Borrell said, because both get a large percentage of their advertising revenue from dealer groups and dealerships. Some television stations get half of their advertising dollars from the automotive category, he said.
Last year the category accounted for 11% of all dollars spent on newspaper advertising -- $2.5 billion, according to TNS Media Intelligence. Newspapers are hurting badly, with ad sales down 30% in the first three months of the year, the Newspaper Assn. of America said Monday.
Companies typically market cars through three tiers: Manufacturers pay for commercials that advertise new models or push a brand nationally, dealer associations corral voluntary contributions from regional dealers into ad campaigns, and individual dealers advertise pricing and perks to get customers into their lots.
Dealer spending shrank 24% last year from 2007, and manufacturer spending decreased 10%, according to TNS Media Intelligence.
Advertising from dealer associations has suffered as more car dealers decide they don't want to spend on group advertising when they have to cut back so much in other areas, said Peter Welch, president of the California New Car Dealers Assn. Many are opting out of assessments, the voluntary 2% contribution they put into funding the regional dealer ads.
"The dealer is saying, 'Look, no one is buying cars, I've already laid off 40% of my workforce, I can't afford to be doing assessment anymore,' " Welch said.
There is a bright spot for advertisers: used cars. Borrell expects used-car advertising to grow 6.7% in 2009 from the previous year, after being down 3% in 2008. Sites such as Autotrader.com, a marketplace for used cars, are seeing increased revenue as more advertisers flock to their sites, Borrell said.
"That's where all the action is -- buying quality used cars," he said.
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alana.semuels@latimes.com
Times staff writer Ken Bensinger in New York contributed to this report.
