How will radio - Local Auto Media Spend Trending
Radio’s
share of local auto dollars to remain above 10%: report. The average auto dealer will spend
more than $640,000 on local advertising this year, according to a new report
from BIA/Kelsey. Combined with what the carmakers will spend in the local
market, it projects $11.3 billion will be spent on local media across all
automotive sectors — or
more than one out every 10 dollars spent in local advertising. While
more dollars are shifting to digital and mobile, the vast majority of
automotive ad budgets are earmarked for traditional media. BIA/Kelsey forecasts
77% will go to tried-and-true advertising outlets this year. Radio’s share is
estimated at 11.6% for 2015, slipping a point to 10.6% by 2019. “Radio is still
an important part of an advertising mix and even as the average quarter hour
numbers decrease a little bit, radio still reaches a very sizable portion of
Americans,” BIA/Kelsey chief economist Mark Fratrik says. “If you have a local
auto dealer with a 72 hour sale this weekend they can be pretty sure he can
reach a larger number of people if he does an advertising buy across the top
three to five radio stations.” Online radio remains a bit player. The report
pegs its share at 0.6% this year, forecasting it to inch up slightly to 0.8% by
2019. That’s in contrast to the rest of digital ad spending, which is forecast
to grow 12% a year over the next five years. As a result, BIA/Kelsey estimates
30% of all local auto ad dollars will go toward digital by 2019 compared to 12%
today. “Broadcasters can play in this game in a big way by showing that
multimedia campaigns are complementary and better than just going straight TV,
radio or online,” Fratrik says.
Why radio
is different from newspapers for car dealers. Over the next five years local newspapers are projected to lose a third
of their auto-related advertising dollars. BIA/Kelsey forecasts their
current share will fall below radio, shrinking to 9.9%, down from their current
14.7%. “There’s an interesting contrast,” BIA/Kelsey’s Mark Fratrik says. “Newspapers will not maintain
their share like radio and TV because they play a different type of role.”
More consumers are heading
to the internet to gather information for their car buying research, which he
believes has supplanted the role of the local newspaper for car dealers.
“TV is an image with beautiful women and good looking guys driving fancy cars,
and radio is a complement
to that by providing information about local dealers and sales,” Fratrik
says. “I think that has a lot to do with the advertising mix.” That’s backed up by National
Auto Dealers Association data which shows local dealers boosted radio spending 14.5% in 2014 to
$1.16 billion. As more is spent on digital, the analysis points to most
of the new dollars flowing into mobile advertising which Fratrik expects will
resemble TV strategies with mobile video dominating. The BIA/Kelsey report —
the latest in its series on various advertising verticals — also points out there’s more to
the overall auto ad sector than just car dealers. There are also auto parts
stores, tire dealers, and motorcycle and RV dealers. Not to mention gas
stations, which AdMall estimates spent an average of $29,000 per location on
local advertising last year.
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