• by John Gaffney , March 26, 2003

Last year the TV upfront process went from zero to 80 when buyers for automotive clients started snapping up network spots like Derek Jeter gets ground balls. This year, according to most observers, that won't be the case.

"A new reality is setting in for the automotive business," said Michael Schmall, managing partner of automotive research company The Planning Edge. "Sales are slower. Last year there was a determination among car companies to keep sales at the level they were at the year before. And they used incentives to do it. This year, I think the automotive companies are going to realize that sales are going to be at a different level. And their ad spend will be adjusted accordingly."

Which is not to say the automotive category is not capable of jumpstarting the upfront. Subaru, Ford, and Mitsubishi have all recently announced the biggest campaigns in their respective companies history. And the automotive category will still drive sports and event programming. However, three huge obstacles stand in the way of car companies snapping up large amounts of upfront inventory.

The first, and most obvious, is the war in Iraq. War normally makes large purchases soft for any industry. The second, and related, are rising fuel prices. The most important may be the fact that zero financing deals aren't working as well as they have. And their effect on corporate bottom lines has been adverse as well.

"The situation is incredibly volatile," said Paul A. Eisenstein, publisher of TheCarConnection.com. "I get the sense that some manufacturers will ramp up their advertising efforts because it's such a competitive business. If you don't advertise it's easy for your message to get lost."

In the ads that do get placed this and next year, expect less call-to-action ads (like financing deals) and more branding. Eisenstein said it is simply too expensive to advertise each model in a product line that can top 90 different makes and models. That's one of the reasons, he said, Chevy ran a branding campaign recently. Subaru's new campaign, featuring Lance Armstrong, is more about the Subaru brand than a specific model.

"The automotive industry is in what I would call an insanity spiral," said Pam Murtaugh, principal of a management consultancy of the same name. "Most of the companies are acting as if size and scale and growth are the only thing that matters. But their sales volume is flat and their pricing is impossible. They need to stop focusing on purchases and start to learn more about what matters to drivers. They need to be in a position to be the car of choice when the consumer is ready to purchase."