Auto Sales are booming - More advertising coming.

Posted: Tuesday, August 4, 2015 1:15 am

Those two sounds—the “ka-ching!” of cash registers and the “vroom!” of new autos being sold—are favorites for radio, and with auto sales hitting record levels, it’s vital for radio to keep a close eye on its No. 1 advertiser, and find the best ways to keep the dealership ad money flowing.

Automotive sales will account for $1.75 billion in radio ad spending this year, according to BIA/Kelsey. Estimates from Kelly Blue Book and Edmunds call for monthly new vehicle sales for July to reach 1.47 million units, and an annual adjusted rate of 17.1 million. For July, the eight major manufacturers are expected to show year-to-year gains. Analysts credit a healthier economy and demand for trucks, SUVs and luxury vehicles with fueling the positive gains. Indeed, as the overall economy has improved and unemployment drops, observers say consumers have started to make big-ticket purchases again, including new vehicles. Particularly in an off-election year, automotive advertising is critical for radio stations.

The question is: How do you grow radio’s ad money commensurate with this, especially in a competitive media market? Jim Doyle, principal of Jim Doyle & Associates, a sales and marketing firm that specializes in automotive, understands the challenge, while acknowledging that radio broadcasters are at risk of losing auto ad dollars to digital media as more clients look to grow their digital ad portfolio. “I would guess that most of the radio and TV stations are not experiencing record revenue from auto dealers,” he says, calling it a potential “major issue for operators.”

To put that in reverse, Doyle suggests radio broadcasters leverage their local relationships with auto dealers and store general managers (“generals to generals,” Doyle says), adding that stations need to demonstrate the effectiveness of broadcast advertising.

For example, he says, stations can use a dealer’s own Google Analytics to show that traffic to a dealership’s website surges after a radio or TV advertising campaign. “It is tangible evidence of the power of our products,” Doyle says. On the digital front, he advises stations to also show dealers the power of a station’s digital and mobile platforms.