Jump to content
Sign in to follow this  

WSJ brings to light dirty practice of auto awards fees

Recommended Posts

Filed under: Marketing/Advertising, Earnings/Financials

best-buy-250.jpgThe free press? It ain't so free. It's no secret that most publications face rising costs and declining revenues, both of which combine to create bottom lines that would shiver even cash-strapped Chrysler's timbers. So it should come as no real surprise that Consumers Digest makes manufacturers pay for licensing associated with the publication's illustrious "Best Buy" awards. But that hasn't stopped the Wall Street Journal from drawing a correlation between the number of nods the magazine hands out and how much cash the winners spend on licensing and advertising.

Here's how it works: Consumers Digest hires freelance auto writers to review vehicles each year. Those vehicles are supplied by manufacturers through short-term loan agreements. Once all of the reviews are in, the editors choose which vehicles are deserving of a "Best Buy" award and which aren't. Once the awards are announced, manufacturers typically want to toot their own horn and brag in advertising. Thing is, Consumers Digest won't allow the carmakers to use their name without paying the piper first. In this case, that means handing over $35,000 for the mention of a first-place win.

Consumers Digest isn't the only publication handing out awards that operates with this business model, but the Wall Street Journal compares the practice to Consumer Reports - a squeaky-clean institution that buys every car it tests from dealerships and refuses to allow manufactures to cite its awards. It's not exactly an apples to apples job.

Even so, the article notes that the number of "Best Buy" awards handed to General Motors increased by 17 percent compared to last year, and that Consumers Digest recommended around half of the Toyota vehicles it tested even in the midst of a wave of recalls from the company.

The Wall Street Journal piece does do a fine job of underscoring the fact that everything you read is best taken with a healthy helping of skepticism. Any publication that ranks products walks a fine line between credibility and keeping the lights on. Consumers would do well to remember that.

[source: Wall Street Journal]

WSJ brings to light dirty practice of auto awards fees originally appeared on Autoblog on Thu, 13 May 2010 17:28:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments


autoblog?i=HTPxIJrSkvA:MHXMqVKIt3A:wF9xT autoblog?i=HTPxIJrSkvA:MHXMqVKIt3A:V_sGL

View the full article

Share this post

Link to post
Share on other sites

Your content will need to be approved by a moderator

You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets



Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.