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Auto Advertising Continues Drive Away From Newspapers

  • WSJ, Monday, January 30, 2006 2:28 PM

As if the newspaper industry didn't already have enough to worry about. The Wall Street Journal reports that automotive classifieds, which historically have been an important advertising category for newspapers, are slipping badly.  Indeed, writes Joseph T. Hallinan, "the slippage may be turning into a landslide."  The explanation is twofold:  the Internet (of course) and structural changes within the auto industry itself. How so? Auto dealerships are consolidating, and mega dealerships devote a smaller percentage of their ad budgets to newspapers than do less formidable ones.  Also--and this is critical--the rise of Japanese auto competition has had a significant impact on classifieds.  The Japanese companies, which have experienced steady growth in the U.S. market, are less likely to advertise in newspapers than domestic brands, reports the Journal.  Together with the increase of car advertising on the Net, we have a scenario that can only be called bleak for newspapers. 





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