Business

AUTO ADVERTISING STALLED IN ‘06

Detroit and Madison Avenue are on a collision course.

The woes in the auto industry took their toll on advertising last year, when U.S. ad spending rose a disappointing 4.1 percent, to $150 billion, according to TNS Media Intelligence.

Ad expenditures for domestic automakers tanked nearly 12 percent, to $7.62 billion, hurt by big cutbacks at General Motors and DaimlerChrysler.

TNS blamed the auto industry for falling short of its initial estimates. The ad tracker forecast a 5.4 percent gain before revising it to 4.9 percent.

TNS is sticking by its forecast of a 2.6 percent gain for 2007 – a year without a spending boost from the Olympics or elections.

In 2006, GM slashed its spending a whopping 24 percent, to $2.23 million. DaimlerChrysler also cut its U.S. spending nearly 11 percent, reflecting its struggling Chrysler division. Their cutbacks pushed ad expenditures for domestic automakers down to the sixth spot on the list of top spending categories.

Meanwhile, U.S spending from foreign auto rivals took the No. 2 spot, falling 1.2 percent to $8.73 billion. While Toyota ramped up advertising, other foreign automakers, including Nissan and Volkswagen, cut their ad budgets.

The ad battle in the phone industry wasn’t enough to offset the drop in auto advertising. Telecommunications spending rose more than 10 percent last year, to $9.43 billion, thanks to heated competition.

TNS said nearly half of the increase was due to AT&T, which jumped almost 31 percent, to $2.2 billion. Nearly all its phone competitors, including AT&T, Verizon, Comcast and Vonage, posted double-digit increases.