Auto Dealers Muscle the Newsroom   

...and now here's the automobile news courtesy of our advertising department.

When feature writer and copyeditor Dan Neil changed jobs at the Raleigh, North Carolina, News and Observer , congratulations from his fellow writers and editors were conspicuously absent. But the snubs were understandable. As the new editor of the paper's auto and real estate sections, Neil reported to the classified advertising department. Defecting from the editorial side, he found, has meant "catching a fair amount of attitude from my former colleagues."

Neil's new role ? a role that has made him feel "personally awkward" at times ? has pushed him to the advancing edge of a worrisome trend in the newspaper industry: gentler coverage of some major advertisers, particularly auto dealers.

"My instructions were to run the [auto] section as it had been handled under the newsroom, but to present a slightly more favorable cant," Neil says. "We present relevant news in a much softer light. It's not a question of selling out to the advertisers, but of being more responsive to advertisers."

"It's one of the most destructive things a newspaper can do in the long haul," says Bill Kovach, curator of the Nieman Foundation at Harvard University and former editor of the Atlanta Journal and Constitution . "Any editorial content...not designed by an editor to measure up to standards of honesty...is dishonesty."

There is mounting evidence that advertisers nationwide are increasingly taking advantage of weak newspaper ad revenues to pressure papers into more positive coverage of their activities. It's a development that is raising questions about the lengths to which recession-battered publishers will go to court advertisers ? advertisers insisting on a hospitable climate for their pitches, and advertisers recently quick to terrorize editors and publishers by brandishing the boycott weapon against coverage perceived to be critical. The trend also raises questions about the slow erosion of the walls around the newsroom and, ultimately, about what readers should expect from newspapers.

"We're on a slippery slope, no denying it," says Neil. "Ethically and professionally, it's dangerous territory. I didn't expect that this would be my major concern.

"I am an ethical person. When you put someone in the position of deciding what is good journalism and what is obliging ad copy, it gets dicey. I don't think everyone is exactly sure how this is supposed to go."

The executive editor of Neil's paper is unambiguous about why he put the auto and real estate sections under the ad department's aegis. And he knows exactly what kind of information readers will find there. The auto section is geared "to create a marketplace for advertisers," says Frank Daniels III.

"It doesn't make much sense to do it to piss off advertisers...At this stage, there isn't a single bit of advertising that isn't important. As a group, auto dealers are our third-largest advertisers [behind department stores and real estate]."

Daniels and Neil are not alone. In Alabama The Birmingham News began its "Wheels" section about three years ago following pressure from local auto dealers.

"We were losing automotive advertisers," says auto writer and section manager Dennis Washburn. "Our editorial people began writing some very critical stories...[They] called auto salesmen out-and-out crooks. We lost two major advertisers ? $300,000 to 500,000 a year ? right there. Then we started the 'Wheels' section."

According to Washburn, growing competition for scarce promotional dollars added to the auto dealers' leverage. "TV gave the advertisers a choice," he says. "If you get a dealer pissed off and he drops his newspaper ads, it doesn't kill his business like it used to."

Under the new ad-friendly regime, Washburn anticipates how his newspaper would handle an unfavorable article. "Editorial would be extra careful about doing an exposé...they probably would not jeopardize such a substantial portion of our advertisers unless it was really something major, something that affects people's lives," he says. "Their pocketbooks are something else entirely.

"My [sections] are designed to sell cars," Washburn adds. Consumers looking for hard-nosed news about the pitfalls of buying a new car won't find it here. Washburn says he couldn't do a story, for example, on how dealers make their money in add-ons, such as treating the seats and undercoating.

Asked about Washburn's comments, Birmingham News Editor James E. Jacobson would say only, "We try to report news responsibly, and that's what we'll continue to do."

"[Editors] are tending to listen more to ad department concerns," says David Benoy, past president of the Association of Newspaper Classified Advertising Managers (ANCAM). "We are all realizing it's a hurting market...why shoot ourselves in the foot?"

In fact, 1990 was the worst year for newspaper advertising since 1961, according to McCann-Erickson Worldwide, and some advertisers are tightening the screws.

"Auto dealers are the biggest culprits" because they hold such a large proportion of ad revenues, says Marion Jacobsen, who is conducting a study of censorship fostered by pressure from advertisers for the nonprofit Center for the Study of Commercialism in Washington, D.C., which researches and opposes "the infusion of commercialism into practically every corner of American life."

The problem with ad sections masquerading as editorial is that readers may not see the difference. "We take great pains to distinguish this section from the rest of the paper," says the News and Observer 's Dan Neil, who runs a small slug on the section's front page that says it's produced by the classified ad department. "It has a different typeface, a different look."

But Jim Corcoran, a professor of journalism at Boston's Simmons College and formerly an award-winning investigative reporter at the Fargo Forum in North Dakota, says, "Changing the typeface is not enough. You need [the kind of] disclaimer newspapers ran in the Gulf War ? 'This section has been censored. We only run good news.' Your reader will appreciate knowing that is the news where you pull punches."

Bill Kovach agrees. "Changing typefaces doesn't say 'Be careful, because this is editorial with a different standard.'" He argues that sections like those overseen by Neil in Raleigh and Washburn in Birmingham are part of a dangerous trend begun by editorial-like sections known as "advertorials" to "trade on the credibility of the news report for information designed to motivate economic decisions."

In fact the motivational efforts go further than that. Automobile manufacturers still offer reporters a variety of carrots to help generate good publicity for their cars, including free loaners, junkets and lucrative freelance contracts. At the same time, dealers infuriated by articles that portray them as sleazy rip-off artists are now flexing their advertising muscle.

"There is no question that with ads off everywhere...the newspapers are backing up, making concessions to their advertisers," says Ted Orme, director of public relations for the National Automobile Dealers Association (NADA). "Dealers would be crazy not to take advantage of that."

"Newspapers are on kind of a split stick right now," echoes NADA President Frank R. Anderson Jr. "Revenues are down, so they are very responsive."

While smaller papers are often most easily intimidated, even larger ones are responding to auto dealer complaints. The publisher of The Hartford Courant apologized to local auto dealers who pulled their ads last year to protest a story that warned consumers about high-pressure sales tactics. The dealers were eventually wooed back ( WJR , June 1990).

When a sportswriter at the Southern Illinoisan compared the St. Louis Cardinals pitching staff to an unsavory car salesman last year, the writer and his editor were suspended, prompting a reporter to resign in protest. Publisher Peter W. Selkowe apologized to offended local auto dealers on the front page.

Nothing so clearly demonstrates the boldness of auto dealers, and the timidity of the newspapers they buy space in, than an article published by Changing Times , a national consumer magazine (recently renamed Kiplinger's Personal Finance Magazine ). "How to Get the Car You Want at a Price You'll Like" told readers how to bargain to cut the dealer markup on a new car. It was distributed nationally by the Associated Press last December.

Car dealers in Utah immediately stopped buying ads when the Daily Spectrum in St. George published the feature. In response, the paper printed a retraction that blamed the "error" in carrying the article on an editor's "poor judgment," and the publisher of the 15,000-circulation paper visited every showroom in the area, to no avail. "I figure I'm saving a lot of money by not advertising in the paper," one leading dealer told Editor and Publisher .

"We did get a reaction of displeasure to that piece," says ANCAM President Dale Harris, the classified advertising manager for the Omaha World-Herald . "Dealers don't appreciate having their industry singled out...[by newspapers telling readers] how to get a better deal when they are already working on a poor margin."

When the top advertising salesman of the now defunct Manchester Herald in Connecticut saw that the Changing Times piece on bargaining for a new car was set to run in his February auto supplement, he pulled it. The day after the supplement ran Editor Vincent Valvo used the story along with a staff-written piece warning car buyers against purchasing auto loan insurance that promises to pay off a car loan if the buyer dies.

"I thought we did a pretty good job for the reader," Valvo says, but the "ad manager and top salesman went off the wall: 'How could we do this to the dealers?'"

Scripps-League, the small chain that owned the paper, promptly fired Valvo. Although he says he was fired for running the piece on bargaining, the Hartford Courant quoted a Herald official as saying Valvo was fired because he ran a photo that day of an innocent local dealer under the headline "Car Borrowers Being Gouged."

"Auto advertising had to be 25 percent of ad revenues," Valvo says. "I believe they didn't lose any advertising because they did fire me."

Connecticut auto dealers appeared so well-organized to Assistant Attorney General Robert Langer that he brought the issue of editorial pressure before the American Bar Association last April. "Agreements among competitors to withdraw advertising from papers if they continue to write articles they perceive as being adverse to their interests" may violate antitrust prohibitions, he says. Nonetheless, auto dealers in some markets work to extract the maximum benefit from the perception that they are a unified economic force.

"Originally, the reason [auto dealers] gave [for not advertising] was the [ Changing Times /AP] article," says Chris Miller, managing editor of the Daily Spectrum . "But as time went on, we found out they were upset with our rate increase. They were looking to bargain for lower rates."

The end result: kinder treatment of the auto industry by another paper. "We're going to look a lot closer when another national story comes in," says Miller. "We'll have to always...edit for what happens locally."

Advertisers have aggressively developed alternatives to buying ad space in newspapers, and that has increased their influence with local papers. In several markets, including Wichita and Detroit, angry auto dealers started distributing their own tabloid advertising handouts at supermarkets and other locations. "It forced us to get a whole lot closer to the dealers," says Ron Davidson, vice president for marketing at TheWichita Eagle-Beacon .

Many newspapers now sponsor auto shows, conduct marketing surveys and provide other special services for auto dealers. But it is the growing willingness of editors and publishers to censor themselves that has the greatest impact on readers.

Retaliatory attacks on television stations that air hard-hitting reports have also paid off for auto dealers. "We don't even bother with most auto-related stories anymore," consumer reporter Herb Weisbaum of KIRO-TV in Seattle recently wrote in the monthly journal published by Investigative Reporters & Editors. "These days, even a simple consumer education story on how to buy a new car can draw the wrath of local car dealers. Trying to share such basic advice with your viewers can result in the loss of many thousands of dollars."

In a speech to the classified ad managers' convention last year, Frank Anderson of the Auto Dealers Association sent a sharp warning. Citing stories he considered unfair, he noted the loss of revenue to a television station that aired a "biased, one-sided" report and reminded his audience of "plummeting confidence" in the media. Then he got right to the point.

"I cannot help but think...that if reporting is not perceived as more balanced it could translate into bottom-line losses in ad revenues for newspapers, television and radio." Anderson called on ad managers to "go back to your editors and tell them you've heard the same old complaint."

Strong words notwithstanding, Anderson professes to have only modest goals for softening coverage of his industry.

"We're not trying to control news," he says, "but to place it in its proper perspective."

"On the front page of the [automotive] section, they'll run a recall notice, then inside we'll have a full-page ad for one of our cars. The front page would negate our ad. We are not trying to keep news out. We're saying, 'Put it in another section; keep it separate from our ads.'"

But isn't the automotive section the place for solid, unbiased, consumer news ? just where readers planning to buy a car expect to find it, and where it will do them the most good?

Traditionalists like Simmons College's Jim Corcoran argue that newspapers are written for their readers. "We have always seen it as our role to provide information to readers in an unbiased fashion to help them make intelligent choices in their lives," he says. Nevertheless, editors and publishers worried about declining readership have focused primarily on design changes rather than on the paper's essential value to the reader.

Aside from such journalistic concerns, Nieman Curator Bill Kovach doesn't think the toothless ad sections are even good business. "The danger is that one of your most important audiences depends upon your ability to help them make wise decisions about how to spend their money." Kovach says these papers are just asking for a specialty publication to come in and fill the niche they've given up.

That doesn't worry the editor of the Raleigh paper. "There are other places to get information, like Consumer Reports ," Daniels says. "I would never look to newspapers to decide what model to buy...Newspapers never did a good job at this in the first place...I'd rather not do it at all than do a half-assed job."

Ultimately, editors and publishers must decide if they gain more in advertising support with special sections than they lose in editorial freedom, if they get a competitive advantage over other advertising media or if they will eventually undercut their own credibility and the loyalty of their readers. And readers must now understand that caveat emptor applies not only when they enter the automobile showroom but also when they pick their paper off the stoop in the morning.

Former feature writer Dan Neil sees the handwriting on the wall. "In the long run, more and more papers are going to do this. It's a strategy to survive in what has become a hairy market."

But to Bill Kovach, "The more they market the paper, the more they squeeze the journalism out if it." l