Philly car dealers yank ads over 60 Minutes report
By Steve McClellan -- Broadcasting & Cable, 4/18/2004 8:00:00 PM
For Matt Uhl, general manager of the CBS affiliate in Harrisburg, Pa., CBS's 60 Minutes is usually a bright spot in his week. It's also a bragging point for his sales people at WHP since the show is the top-ranked program in its time period on Sunday nights.
But a report by the CBS newsmagazine on the financing practices of car dealerships two weeks ago may end up costing the station more than $100,000 in advertising. That's no small loss in Harrisburg, the No. 47 Nielsen TV market.
The 60 Minutes report, titled "The Best Possible Deal?," outraged the Philadelphia Dodge Dealers Group so much that it decided within days of the April 4 airing to yank all its ads off WHP for the second quarter.
The dealer group also informed the Clear Channel-owned station that it might not buy any more ads for the rest of the year and intends to similarly punish CBS-owned KYW-TV Philadelphia, although no action has been taken yet. A CBS stations spokesman declined to comment on the matter.
Retaliation against a CBS-owned station may be understandable, says WHP National Sales Manager Stu Brenner, but why target a non-owned affiliate, in a small market, with absolutely no influence over 60 Minutes? "It's completely misdirected," he says.
Surprisingly, the practice isn't all that uncommon and demonstrates how aggressive news coverage by the national network can critically—and sometimes unfairly—hurt the delicate business relationship between local affiliates and advertisers, particularly car dealers. Dillard's retail chain, for example, hasn't advertised on some CBS affiliates since 60 Minutes aired a story on department stores a few years back.
CBS News says it "values its strong relationship with the CBS-owned stations and affiliates and respects their relationship with their advertisers. However, this was a valid and newsworthy story. We believe we served our viewers well by reporting it, and we are grateful that the CBS stations support our mission of accurate and independent journalism."
That support is often tested by auto dealers, which comprise the single biggest ad category for TV stations. The Television Bureau of Advertising estimates that car ads account for 30% of a TV station's ad revenue on average. In 2003, carmakers and dealers spent $4.7 billion on local ads, up 2% from 2002, according to ad tracker Competitive Media Reporting.
Even more galling to WHP is that the Dodge dealers that yanked the ads weren't even mentioned in the 60 Minutes piece, which covered dealers' practice of adding interest points to car loans, often undisclosed. Such loans are then presented as "the best deal possible" when it often is not.
Brenner says the Philadelphia-area Dodge dealers are punishing the wrong people. "This is like somebody having a bad day at the office and deciding to go home and kick the dog. They are not sending a message to the CBS network. The network is feeling no pinch at all."
Repeated calls to the head of the Philadelphia Dodge Dealers Group, Joe McErlean, were not returned. But, says Harold Kobakof, chief retail officer, BBDO Detroit, the ad agency for Dodge Dealers around the country, "It happens all the time."
Why? Because the dealers believe that news departments tar their entire industry with the same tainted brush. "There are good dealers and bad dealers," Kobakof says. The 60 Minutes story and others like it "don't give a fair portrayal of the business as a whole, and they should give us equal time."
While targeting local affiliates may seem unfair, he says, from the dealer's perspective, "they may have lost three deals the morning after that story runs. It's a very powerful medium, so that's very frustrating."
As a matter of policy, CBS says it warns its affiliates in advance of any stories that could ruffle the feathers of local advertisers. In the Harrisburg case, stations let their auto clients know it was coming. Some of the car dealers asked that their spots be shifted to other programs, and, in some instances, stations moved the car ads just as a precaution.
60 Minutes is hardly the first program to report on dealer financing practices. Dateline NBC did a similar story last December, and different dealers retaliated against several Pennsylvania NBC affiliates.
Ray Carter, vice president and general manager of NBC affiliate WPXI Pittsburgh, said that, after the Dateline piece ran, the Pontiac/GMC dealers in his region yanked their first-quarter ads. "It hurt us pretty hard," he recalls, adding that, much to his relief, the group is buying ads again in the second quarter.
Paul Quinn, president and general manager, NBC affiliate WGAL Lancaster, Pa., says that, after the Dateline story, a Nissan dealer pulled first-quarter ads from his station. "They put us in the penalty box for something the network does that they don't like," he says. "It's a way for them to make a point after they see something and just go bananas. They like to lash out at somebody, and this is the easiest thing to do. It's sad because the TV stations have nothing to do with it, and 60 Minutes or Dateline are only doing their job."
In Memphis, Tenn., Covington Pike Toyota, a focus of the 60 Minutes story, has not advertised on WREG, the CBS affiliate there, for several months, knowing that the story was in the works. Station General Manager Bob Eoff says no other advertiser has pulled ads and he doesn't know how long Covington Pike will be off the air.
The dealer, he says, "has been a loyal advertiser and a good friend for years." Can the damage can be repaired? "Too early to tell."
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