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Printing Industy Blog

Auto Industry Media Spending During Bankruptcy

By Adam Dewitz
Published: June 1, 2009

With Chrysler and General Motors in bankruptcy many are looking at the ramifications this will have on the industries that supply goods and services to support the automakers. While General Motors is seeking to approval to pay “certain essential suppliers” to its manufacturing operations, we can expect media suppliers to feel more pain during these bankruptcies.

A recent report at autoblog states, Obama administration's auto task force slashed Chrysler ad budget by 50%:

Chrysler is nearly two weeks into its bankruptcy, and the Auburn Hills, Michigan-based automaker is already getting an idea of just how engaged the Obama administration plans to be in the process. Chrysler planned to spend $134 million dollars on advertising during its supposed nine weeks of bankruptcy, but the Auto Task Force has reportedly cut the figure in half.

TheDeal.com has a report today that provides a look at the General Motors bankruptcy filing and its media spending. The exact impact on print media is unclear, but remember, in the past few years GM has been shifting its ad spending to electronic media (half of their $3 billion marketing budget last year).

 

Discussion

By Michael J on Jun 02, 2009

GM is the leading edge of an inevitable price squeeze on all forms of advertising in media. Moving from Print to the web is more about changing the dollars previously spent in print to the dimes spent on the web. If they could spend dimes in print and get the same metrics, my bet is that they would.

The opportunity is digital versioned print with information rich QR codes. It supplies the metrics. And could probably be sold for the dimes that advertisers are ready to spend.

The related functionalities surrounding transpromo are exactly the technologies the print industry needs. I've been calling it Clickable Print. and the word for Distribute and Print is the one that has been used as the slogan for the recent PacPrint. Printernet tries to capture the real value of distribute and print.

Consider just Oce. They have 24 jetstreams around the globe. Plus they have the DNN process and relationships. For a global brand on could send PDF files with embedded information rich QR codes to 24 output nodes. For each to produce a couple of thousand 24 newspapers would be easy.

But for a global brand that means 24 x 5000 = 120,000 newspapers printed and distributed overnight with a minimal carbon footprint.

If you add in the Indigo, Igen and InfoPrint installed base of output devices, it's not to hard to imagine 50,000,000 Print pieces delivered in a day or two. If you put in information rich QR codes to connect Print via cellphones to video and websites, it's a new media channel.

I have to believe that if this gets on the radar of the globals who are searching for inexpensive ways to be both local and global, it would pass the "why wouldn't I do that?" test.

 

By Jack A on Jun 02, 2009

What Micheal J describes in his post is available today from a technology, print and deliver platform globally. It is the same infrastructure and processes that provides prepress, print and logistics services for magazines to be printed around the world and delivered in every mailbox every Friday. The digital equipment needed is in place in at least one of the largest global printing companies today. The challenge with delivering this technology has more to do with the culture, vision and silos that exist with the client and their agencies. Big ideas often get lost in the mid management ranks regardless of the logic test.

 

By Gail NIckel-Kailing on Jun 02, 2009

According to this news report, GM owes advertising agencies $162.5 million for TV ads...

http://tinyurl.com/l2djky

Gail

 

By Roger Walls on Jun 02, 2009

I believe internet advertising is probably the least effective of all. When I am on my computer, I am there for a specific purpose, I don't care about the advertising around the website I am visiting. I believe that most business people feel the same way. We don't "surf" the net for deals. If I am looking for an automobile, I will specifically go to that site. I will normally arrive at that decision based upon literature I have seen or read. There is nothing as effective as holding a brochure for a new car and reading about it.

 

By Michael J on Jun 02, 2009

Jack A,
I think we're seeing the same thing. It reminds me of line from Lawrence of Arabia. They are across the desert from Acaba. Laurence points in that direction and says "Acaba is over there. All we have to do is go."

The big problem is that each PSP can't figure out the value of sending jobs to others in the network.So they don't. So far only the globals like RR Donnelly should be able to deliver this experience. Maybe Consolidated?

I'm surprised that we haven't yet seen it come from the franchises like AlphaGraphics or Sir Speedy et a or from Staples, Fedex. There's been lots of blabala about distribute and print for years, but I think it needs someone to make it easy for a global marketer to buy. Once the work is in hand, getting everyone to play nicely together will be a snap.

 

By Andy McCourt on Jun 02, 2009

Roger Walls wrote: "I believe internet advertising is probably the least effective of all. When I am on my computer, I am there for a specific purpose," Hear hear! Roger, you are the first I've seen who has the courage to publicly challenge the Golden Calf-worship of internet advertising. I loathe those screen-sized ads that rudely balloon out when I click on some newspaper sites. It actually puts me off the product. It's too intrusive. I think small 'sponsorship' ads are okay (such as those on WTT) with an invitation to click to find out more if you are interested, but the purpose of the website visit as you say is specific, and any vulgar usurpation of private screen-time-and-space is resented. But if GM and Chrysler really want value for their reduced adspends....go fusion advertising with an intelligent print content combined with PURLs. Companies such as MindFire would show them how to do this. Use print to attract; use the internet to interact.

 

By Dona Q on Jun 03, 2009

I’ve been an evangelist of the distribute then print model since the mid 90’s. The technology has been available to provide this distribution model for some time. However, the business culture has been slow to adopt this perhaps because the perceived value has not been a motivator of change. I believe, however, that this recession will serve as a tipping point to move print communication more closely to the internet for all purposes of advertising and communication. The communication architecture has changed with driving forces being a workforce that has grown up on the internet, demand for digital, and cost efficiencies. Printed communication will become a premium that will enhance electronic media.
As mentioned, there are companies that are doing this. Those companies that consolidate technology and expand the business model will win. The franchise networks don’t support this operation because they are all independent business owners with different cost structures within their marketplace. The direction would need to come from the franchisor leadership and management.

 

By Michael J on Jun 03, 2009

Dona,
Me too. But until now it was a great idea that couldn't be executed in the real world. We should never forget that the internet was "invented" in the late sixties but the World Wide Web was not invented until the late 90's.

In my humble opinion the equivalent of the WWW for print is the use of printed information rich QR codes that can connect the printed piece to video.

The reality is that the two mass mediums are print and TV. Ever since movies were invented it was ture. The other reality is that the killer app on the web was email. Today the killer app is cell phones. Connect print to TV on cell phones and you get what I like to call Clickable
Print, Printernet Published

 

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