Car Dealer Woes Hit Telegram | Daily papers suffer as Detroit suffers
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Ads in the T&G's Sunday auto section have dropped significantly.
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Herb Chambers, head of Herb Chambers Cos., which operates 40 dealerships in Southern New England including in Auburn and Westborough.
Once upon a time a reader could open up the Sunday paper, no matter where they were, and be overwhelmed by page after page of ads for brand new cars.
But that was then and this is now.
Newspapers, including the New York Times-owned Worcester Telegram & Gazette, are facing dramatic declines in ad revenues, in part because auto dealers — facing their own financial crisis — are pulling out of print almost entirely. An analysis by the Worcester Business Journal of car ads in Central Massachusetts’ largest daily showed that its special car-focused Sunday section has seen a severe drop in auto-related advertising in just one year.
The WBJ’s analysis is backed up by local dealers’ marketing strategies.
“In the last sixty days, we’ve pulled pretty far back,” said Herb Chambers, of Herb Chambers Cos., which has about 40 dealerships in Southern New England, including in Auburn and Westborough.
For Chambers, the pull out from print “started in October, which was very difficult and in November it was just a blood bath. Car sales on a national basis have been down between 37 and 38 percent while we’ve down about half that, in the high teens. So we’re doing better than everyone else we know and it’s still very difficult.”
Putting aside the current debacle for American automakers, there’s the overarching trend that consumers are turning less to print and more to online.
“Car dealers have pulled out of newspaper advertising and magazines because people are not reading newspapers anymore, particularly younger people. We moved more of our advertising dollars into radio, television and online advertising instead,” Chambers said.
Micro Trend
The T&G is a perfect local example of a daily newspaper that is seeing ad revenues drop.
Its auto advertising section on Sunday, Nov. 23, had eight pages of display and classified auto ads, of which only three were full page ads. Four others were either half or three quarters full with display ads and the remaining space was mostly classified ads.
Compare this to even a year ago when its Sunday, Nov. 25, 2007 edition had a 14-page auto section, with four full-page ads. It also had another four pages that were about three-quarters full of display ads and two more that were half full. There was also another full page, but it was a house ad for the paper.
Five years ago, in its Sunday, Nov. 24, 2003 edition, there were 14 pages as well, with four full page ads.
And that was on top of the previous Saturday’s “Wheels” section on Nov. 22, 2003, which had 14 pages of car ads including nine full pages of ads. The paper no longer runs its Wheels section.
Now that the economy is officially in recession, and has been nationally since December 2007, newspapers have continued to suffer from a lack of advertising, leading to layoffs across the country, including at the T&G, as well as its sister paper, The Boston Globe, and its parent company, The New York Times.
While T&G Publisher Bruce Gaultney agreed that advertisers across the country, as well as at his paper, have pulled back from the printed page, he contends that many of them moved that money to online advertising.
“We have 30-plus online auto advertisers so we’re a very strong presence online for them,” he said.
Gaultney said the paper’s web site sees a lot of visitors and shared the October numbers: 721,000 unique visitors a day; 9 million page views a day and the average visitor spent 24 minutes on the site.
Industry Woes
According to the Newspapers Association of America, a decline in advertising is happening across the country at newspapers of all sizes. The Newspaper Association of America said that print and online advertising revenue had plunged by 18.11 percent in the third quarter of this year.
The association termed it the worst decline by far in the almost 40 years that the organization has tracked quarterly ad revenues.
This is also the sixth straight quarter that saw newspaper ad revenue fall in comparison to the prior year’s quarter.
Warren Palley, head and owner of Palley Advertising in Worcester, acknowledges that November was a tough month for car dealers. He has a number of car dealer customers.
“Newspapers need to figure out the right business model and that proper business model must be able to be measured by the advertiser. They need to be able to measure their return on investment. When you advertise on the Internet, it’s possible to get the facts and figures that let advertisers fully understand what their advertising is doing for them,” Palley said.
Many newspapers may eventually exist mostly online, he said, and any cities with multiple papers will probably not see competing papers for much longer, he said.
“What we (agencies and advertisers) do hasn’t changed but the tools we use have changed,” he said. “Everything we do is about driving customers to the web site and if they call, e-mail or click on the web site, then we’ve done our job. At some point when people are shopping or buying, the Internet becomes important, whether it is at the beginning, the middle or the end.”
Chambers, who reads a daily newspaper every day, said the drop in auto sales led to his reluctant decision to cut more spending from newspapers, although he worried that it would cause sales to fall further.
But he said that hasn’t been the case, at least anecdotally.
It is not with any happiness that Chambers talks about his declining purchase of newspaper ads. “We’re always going to have some kind of presence in newspapers: my business was built on newspaper advertising,” he said. Chambers started his dealership business in 1985.
“You know people complain, oh the real estate market is terrible or the automotive market, it’s terrible… But I thank God I’m not in the newspaper business. They haven’t found something replace or reinvented the car, but unfortunately they’ve reinvented the newspaper,” Chambers said.
But Gaultney disagrees. “When people in Worcester County want to buy a car, they still pick up the daily paper, the Worcester Telegram & Gazette.”
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