Auto Ad Spend Growth Chart - Growing
Auto ad spending’s
still growing, slowly, with new models and reboots likely to help in 2015. Radio’s
automotive ad sales growth has slowed this year, and while the lure of digital
may be partly to blame, just-released figures from Kantar Media project total
car industry advertising in 2014 will have its slowest growth since the
recession. The firm estimates auto advertising will increase just 1% this year
with a current pacing pointing to a tally that will reach $16.25 billion.
“Total measured ad spending has grown each year since 2010 and is on track to
continue that streak in 2014,” Kantar Media chief revenue officer Jon Swallen
said yesterday. But the post-recession marketing budgets are merely back to
what the car industry spent in 2002. Still, it’s considerably better than the
low point of $11.1 billion in 2009. “Since bottoming out, ad spending has
increased more than 40%,” Swallen noted during a webinar. Manufacturers still
spend the most, accounting for about 60 cents of every dollar spent, but
regional associations and local dealers have been pumping more money into the
marketplace. That’s good for radio since it’s where most of the industry’s auto
ads originate. Some groups are experiencing just that. “Auto is an example of
an improving trend on radio, up 4% in the quarter with the entire growth in
auto coming from local,” Journal Communications president/ COO Andre Fernandez
said two weeks ago when the company announced its quarterly earnings. The
Kantar data shows car ad spending still tracks closely with car sales.
“Post-recession consumer demand for new vehicles has improved sharply and the
auto industry has followed suit with higher ad spending,” Swallen said. “The
near-term sales forecast remains bullish and coupled with a large number of new
model introductions and re-launches that manufacturers have scheduled, auto
advertising appears to be on a healthy trajectory into 2015 and 2016,” Swallen
said.
The auto jump ball: print dollars. Since
coming out of the recession, Kantar Media says radio’s take of automotive advertising dollars has been
fairly steady. At the same time internet display ads overtook radio, taking in
more than $1.1 billion in 2013. Television remains the medium of choice, capturing10.5 billion
last year. “That’s roughly
two out of three dollars of automotive spending,” Kantar chief research
officer Jon Swallen pointed out. But it’s newspapers and magazine dollars where radio sellers may
find the most opportunity. “That media channel is losing share of
budget,” Swallen said. “Auto spending on print media has tumbled — newspaper and magazine
spending is down nearly 60% as compared to 2004.” While he sees more
manufacturers and local dealers shifting dollars into digital, Swallen says
there’s no data showing what the right media mix is. “There’s no one magic
formula,” he said. “There are many different pathways to get to a successful
outcome.”
Radio’s
auto lane may be TV’s ‘traffic jam’ of ads. It’s not often that radio can position itself as the
uncluttered option, but when it comes to auto advertising a new analysis by Kantar Media
may help make the case. It analyzed all the local newscasts on more than 60 television stations in
the top 10 markets during April. “The results were quite sobering,”
chief research officer Jon Swallen said, pointing to the risky side of a decision by the
car industry to put nearly two-thirds of its spending in one medium. The
analysis showed 60% of TV auto ads during the local news air in a pod with
multiple car commercials and a third were in pods with three or more ads.
“On average there were 1.71
auto ads per pod in local news,” says Swallen, noting that means little
or no separation between intra-category spots. Kantar doesn’t measure
advertising effectiveness, but the suggestion is the competitive ad clutter is likely to diminish
how well any given spot cuts through to consumers. Kantar also found some risks
to online campaigns, particularly on social media. It found that although viral
video can build a buzz that lasts longer that a typical broadcast commercial,
an analysis showed that it can also serve to build interest in a competitor.
When Ford released its aluminum body F-Series truck last January, its rival
Chevy Silverado had a lot more chatter on social media too — even surpassing
Ford at one point.
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