Ford Sticks With 'American Idol' Sponsorship
Ford Motor. Co. to continue as American Idol sponsor as TV weighs fallout from Big Three's struggles
By Claire Atkinson -- Broadcasting & Cable, 11/23/2008 8:00:00 PM
While the economic uncertainly surrounding American car makers has called into question some of the nation's biggest marketing budgets, struggling Ford Motor Co. will be sticking with its American Idol sponsorship for the 2009 season.
"Yes, the partnership between Ford and Idol continues in 2009," confirmed a Ford spokesperson.
Spokespersons for Fox as well as Idol producer Fremantle also confirmed that the relationship remains intact.
That is welcome news to everyone involved with the show, as Ford last year spent nearly $78 million on its American Idol sponsorship (including commercials), and has spent some $328.5 million over the seven seasons of Idol, according to data from TNS Media Intelligence.
The Big Three automakers' hopes for a $25 billion federal bailout were dimmed but not completely dashed last week. Senate Majority Leader Harry Reid has asked the auto giants to submit a plan for how they would spend the requested amount. Congress is likely to reconsider the proposal sometime before Dec. 8, according to reports late last week.
Washington's reluctance to help left media executives everywhere skittish about the future of some major contracts, as General Motors, Ford and Chrysler are the nation's third-, sixth- and 14th-largest overall advertisers, respectively. GM's measured-media ad spending was $3 billion in 2007, while Ford's was $2.5 billion and Chrysler posted $1.7 billion, according to TNS data.
GM spent $1.1 billion on TV last year, Ford spent $982.1 million and Chrysler clocked in at $750 million, according to TNS.
Overall, BMO Capital Markets Managing Director of Internet and Broadcasting Research Lee Westerfield notes the automotive industry accounts for 20% of all advertising, and that doesn't bode well for the TV business.
"Automotive at the national and local level is likely to pull back further in 2009, but for slightly different reasons," Westerfield says. "The national dealers are driven more by automotive output and by new brand introductions, both of which are likely to be smaller in 2009 as business investment dwindles."
But a downturn was already evident long before the recent stock market crash. Through July 2008, Ford and Chrysler had each spent 22% less on advertising than last year and GM was down 6%, according to Nielsen Monitor-Plus.
And it is no secret local TV stations are bearing a good amount of the brunt of the automaker troubles.
"Local TV is expected to be down 17% in 2009; excluding political dollars, on an apples-to-apples basis, down 11%," Westerfield says. That underscores the challenges at the station level and in each case, network and stations anticipate autos will be one of the downward drivers for 2009.
Television Bureau of Advertising President Chris Rohrs called the downturn in car sales "a serious, serious problem and a vivid demonstration of the collapse of the consumer economy."
With the economy as it is, Rohrs predicts next year "is going to be very difficult for all stations and particularly for stations that are not leaders in their markets."
P.J. Bednarski contributed to this story.
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