Oct. 16 (Bloomberg) -- The Los Angeles Times pulled its “Chevy Showroom” Sunday insert backed by General Motors Corp. last year as car sales plummeted. GM has since emerged from bankruptcy protection and the newspaper section is back.

The Times’ publisher, Tribune Co., along with New York Times Co. and Hearst Corp., say marketing spending rebounded from carmakers such as GM and Daimler AG in the third quarter. That may have helped stanch advertising sales declines after record drops in the first half of 2009.

“We definitely saw a relative uptick in the performance of the automotive category in the last couple of months,” Denise Warren, chief advertising officer at the New York Times, said in an interview this month. “It’s been a little ray of sunshine.”

Ad sales at U.S. newspaper publishers probably fell 23 percent in the third quarter to $6.85 billion, easing from declines of 29 percent and 28 percent in the second and first quarters, according to research firm Magna Global. Carmakers’ national campaigns may have mitigated a drop-off from larger ad categories that might not return to previous highs, said John Janedis, a New York-based analyst with Wells Fargo & Co.

“Given the state of newspaper advertising, anything would be welcome,” Janedis said. “For newspapers to see a real recovery, it needs to be some of the larger categories like help-wanted or real estate or retail.”

Times Co., up 16 percent this year, fell 19 cents to $8.48 at 4:02 p.m. in New York Stock Exchange composite trading. The company reports third-quarter earnings Oct. 22. Sales may have fallen 18 percent to $561.3 million, based on the average of analysts’ estimates compiled by Bloomberg.

‘Weak’ Environment

Publishers were forced to sell assets, raise newsstand prices and cut sections and jobs in the past year to cope with the ad slump. Industrywide classified ads, including for jobs and cars, fell 41 percent in the first half, according to the Newspaper Association of America.

“The ad revenue environment remains weak overall,” McClatchy Co. Chief Executive Officer Gary Pruitt said yesterday on a conference call about third-quarter results. McClatchy was the first of major publishers to report earnings.

Auto ads comprised 5.5 percent of national ad spending last year, down from 11 percent in 2005, according to NAA data. That was the most recent year that car and truck sales rose in the U.S.

‘Chevy Showroom’

Carmakers, which slashed spending on national ads by 44 percent in the first half, bought advertisements again as the government’s “cash for clunkers” program to buy more fuel- efficient vehicles boosted demand.

On July 10, Detroit-based GM emerged from bankruptcy protection. Vice Chairman Bob Lutz reiterated Oct. 13 that the company plans to increase advertising “significantly.” Toyota Motor Corp., the world’s largest automaker, will spend a “larger than average” $1 billion on U.S. marketing this quarter as the economy begins to recover, the Toyota City, Japan-based firm said last month.

The Los Angeles Times brought the 8- to 16-page “Chevy Showroom” color section back last quarter amid renewed optimism from automakers, said Don Meek, president of national publishing and interactive media sales at Tribune, the Chicago-based publisher that filed for bankruptcy protection in December.

“It’s a very clear indication about the direction of the auto industry, the loosening of budgets,” Meek said in an interview on Oct. 1.

Times Co.’s Warren said promotion of the cash for clunkers program, which expired Aug. 24, was a particular motivator for the automakers. The New York Times also sold large “takeover” ads on its Web site’s homepage to European makers such as Stuttgart, Germany-based Daimler’s Mercedes-Benz, she said.

Ford Ads

Ford Motor Co., which is touting its new Taurus sedan and Lincoln MKT “sport wagon,” plans to ramp up advertising spending by 15 percent to 20 percent this quarter, compared with the third quarter, said Robert Parker, a spokesman for the Dearborn, Michigan-based automaker.

“This year, our spending has stabilized and is ticking up,” Matt VanDyke, Ford’s U.S. marketing director, said in an Oct. 8 interview.

Industrywide ad sales fell 29 percent in the first six months to $13.4 billion, the biggest percentage decline since NAA, based in Arlington, Virginia, started compiling quarterly data in 1971. National auto ad sales plummeted to $97.2 million from $172.8 million.

USA Today

Gannett Co., publisher of USA Today, said Sept. 29 that the rate of decline in its print ad sales slowed last quarter, compared with the first and second ones, when they fell 34 percent and 32 percent respectively. Robin Pence, a spokeswoman for McLean, Virginia-based Gannett, said the company doesn’t give specific ad results before its earnings release on Oct. 19.

The San Francisco Chronicle’s ad revenue from carmakers has stabilized after it “kind of dried up for us at the beginning of the year as they cut back and went through their troubles,” said Jeff Bergin, senior vice president of advertising at the newspaper, owned by New York-based Hearst. “We’ve seen a pretty robust return of national advertising from the manufacturers.”

The publishers and automakers declined to give specific advertising figures.

“A stabilization in any ad category needs to be taken with a grain of salt because advertising has fallen so far that it’ll take a long time for newspapers to get back to zero,” said Ed Atorino, an analyst with Benchmark Co. in New York. “National auto advertising may be coming back a little, but classified auto ads and local retailers fell off a cliff.”

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: October 16, 2009 16:13 EDT