Motoring Along

In Detroit, Oprah is queen, retail is king

Among big TV markets, Detroit is an enigma: the ad market bucks usual trends, and local competition doesn't follow national norms. The No. 10 TV “scrambles all your preconceived notions about local markets,” says Joe Berwanger, vice president and general manager of NBC's Detroit affiliate WDIV.

Detroit may be home to America's Big Three automakers—GM, Ford and Daimler­Chrysler—but car ads aren't big in the Motor City. Automotive accounts for 20% of the mix, compared with 30% or 40% for top-15 markets. Many residents have ties to the local car industry and buy American, so foreign dealers don't compete heavily on TV.

The big ad category winner: retail. Detroit boasts a high rate of home ownership, nearly 75%—“a pot of gold” for retailers like home-improvement, furniture and carpet stores, says Grace Gilchrist, vice president/GM for ABC affiliate WXYZ. Per-capita income is high, bolstered in part by Oakland County, one of the top three wealthiest counties in the U.S. That spells $387 million in gross ad revenue for Detroit stations in 2004, up from $359 million in 2003, per BIA Financial Network.

In local ratings, things get interesting. Post-Newsweek's WDIV and Scripps Howard's WXYZ are the heavyweights, duking it out in the 6 and 11 p.m. news. Oprah gives WXYZ's early news an edge. In October, WXYZ prevailed at 6 p.m., and WDIV won the 11 p.m. slot. CBS O&O WWJ, positioned high on the dial at ch. 62, doesn't carry local news. WJBK was the CBS affiliate for decades until switching to Fox in 1994. Fox O&O WJBK, which airs a morning news show and 10 p.m. evening newscast, is a player in local news, with an impressive 42.5 hours of programming a week. The market's strangest twist: WXYZ produces the 10 p.m. news for Viacom's UPN O&O, WKBD. That two-year deal expires in December and will not be renewed due, in part, to low ratings.

Comcast is the dominant cable operator in the market. Cable penetration is above average at 71%, while about 14% of homes have alternate delivery systems like DirecTV or EchoStar's Dish Network. Comcast Spotlight, the operator's local ad arm, reaches 1.3 million Detroit-area households. “We compete against locals,” says Regional VP Roland Trombley. “I can reach 99% of the market with one tape and one order.”

One big plus for Detroit: Political money pours in during election years. This year, total ad spending is up 12%-14%, and stations are expected to garner an extra $30 million in commercial dollars, thanks to the presidential race and several state propositions. The Olympics and the Detroit Pistons' winning the NBA championship have also helped boost revenue. “It is almost like two different markets,” says Berwanger. “In Detroit, the pendulum swings wildly between even and odd years.”

The Demos
Detroiters love their American cars and hometown hockey team, the Red Wings. Almost 80% own new ones. About 20% lease their cars, triple the average for adults in the top 75 markets. After the long winters, residents like to mountain bike, roller blades and powerboats.
Who Share of population Index*
Source: Scarborough Release 1 2004 75 Markets Report (February '03-March '04)
*Index is a measurement of consumer likelihood. An index of 100 indicates that the market is on par with the average of the 75 local markets.
NM = Not large enough to be measured
**Activities engaged in past 12 months
Never married27%104
College grad22%93
$100K+ HH19%122
$50K+ HH55%113
Below $50K HH45%88
Have a cable modem20%148
NHL fans46%358
Own homes78%116
Go bowling28%135
Lease cars20%329