Media Outlets Losing Money From a Lack of Auto Ads

The flight of advertising dollars to the Internet is one explanation for the pain felt by traditional media. Another culprit that is increasingly to blame is Detroit. For all the discussion of new media's role in hurting profits and revenues at traditional media outlets -- newspapers, magazines, broadcast television and radio -- the sharp downturn in the auto industry is another big culprit, and is taking an increasing toll on the advertising revenue generated by the media. In the first quarter alone, the auto industry spent $414 million less on advertising than in last year's first quarter, according to TNS Media Intelligence. And it's not just the local newspaper or television station that is hurting from cutbacks in advertising by the local car dealerships. In recent earnings reports from the major media companies, like Viacom and Time Warner, executives mentioned the downturn in the auto industry as one reason for lagging revenue at cable networks and magazines. Newspapers were the hardest hit, losing $131 million in auto advertising, much of the decline coming from local dealerships that are having trouble moving cars off their lots.