Should automakers “pay” for car awards?
The TTAC story
Now please, don’t confuse Consumer Digest with Consumers Reports. The latter is owned by the not-for-profit Consumers
Union, purchases all of its test vehicles and refuses to allow its awards to
appear in manufacturer advertising.
Similar to CR’s policy, CD has no advertising, relying on
subscription income alone. But it does take money directly from automakers via
the licensing of its awards for advertising purposes: $35k for the first award;
and $25k for each award thereafter.
To further encourage automakers to pony up for the licensing
fees, CD’s award page
Here in Canada, we have a similar situation with the
Automobile Journalists Association of Canada and its annual Canadian Car of the
Year Awards, an event financed in part by automakers willing to pay entry fees.
According to AJAC spokesperson Beth Rhind, fees change each year, depending on the number of
entries. Last year,
AJAC asked manufacturers to pay $6,900 for each of 56 total entries.
AJAC doesn’t charge for the use of its awards in
manufacturer advertising, but like CD, allows the practice.
Although AJAC says on its site the purpose of its event is
to “provide consumers with sound, comparative information on vehicles that are
new to the market,” not all “new” cars are evaluated.
At last year’s event not every "new" car was entered, while brands like Aston Martin, Bentley, Chrysler Group,
Ferrari, Maserati, Maybach, Lamborghini, Lotus and Rolls-Royce did not
participate at all.
So, the question is:
Or are you just fine with the financial partnership that’s
going on at Consumers Digest and AJAC
because of the information they provide to new car buyers?
[Source: The Truth About Cars, Wall Street Journal]
The way the AJAC set up their CCOR comparisons seems completely legit to me. A flat rate fee for all entries is fine in my book. What makes AJAC legitimate to me is the fact the Journalists represent a number of publications, not just one.
The losers are the ones who decide not to enter since its their vehicles that miss out on the publicity. But then, if you have uncompetitive product, why enter?
For example, why would Chrysler stack a Caliber up against class leaders like the Mazda3 and Golf? That would be stupid and a waste of money from Chrysler's perspective.
Even the Consumers Digest scenario is probably okay. They are just licensing the use of their logo. Nothing wrong with that.
I'm sure journalists are careful of the optics whenever money is involved since their credibility is at risk if they don't get it right.
Where it begins to smell is where money is going to the journal in question directly. No seedy publication would likely ever admit that anyways. But, as a consumer, I read more than one review on the same vehicle, especially if I'm interested in buying it. I can usually smell a rat when I read it.
Posted by: Randy | May 13, 2010 at 12:36 PM
If my sums are correct, AJAC collected $386,400 from the participating manufacturers at last year's car of the year contest.
My question is a simple one: Does the manufacturer have to be a member of AJAC to enter the car of the year contest in the first place?
If so, an annual due of $3,051.80 pours another $57,984.20 into the Association's coffers.
Call me a fool, but that's insane money.
Comments?
Posted by: jokersandcomedians@gmail.com | May 13, 2010 at 07:17 PM
{Where it begins to smell is where money is going to the journal in question directly}
The Star has a weekly column from Toronto Auto Dealers Association(TADA)President. It is a weekly advertisement for the dealers around Toronto. The dealers love their clients and would never harm them. It is complete conflict of interest.
The Star is completely beholdened to the carmakers/dealers for
advertising in the Wheels section every Saturday. I have repeatedly brought this to the attention of the Wheels editor but he does not agree since the advertising cheques keep rolling in from the car dealers.
Posted by: Ian Duffield | May 16, 2010 at 06:06 PM
"The Star is completely beholdened to the carmakers/dealers for
advertising in the Wheels section every Saturday."
Doesn't it make sense for Dealers and Automakers to advertise in the wheels section? You want them to put adverts for diapers and lawn ornaments in the Wheels section?
Look at it from the newspapers point of view. The whole point of the wheels section is to attract readers and advertising relating to cars.
The original story is about money going to the AJAC and other Organizations not the Toronto Star. I fail to see what is wrong with a newspaper generating revenue in the form of advertising. Otherwise, they won't be publishing for very long.
Where I do have a problem is an Automaker giving money to a particular journal or journalist "under the table" for a sympathetic review. What does that say about the Automaker's product and the Journalist in question? Not much. I think most car buyers if they do their homework will quickly find out the truth.
Posted by: Randy | May 17, 2010 at 07:52 AM