In a new report, Advertising Takes A Sharp Turn, Borrell and Associates writes that, due to a decline in both new and used vehicles, dealers are spending less on advertising and more on marketing. And pretty much every form of media is taking a big hit as a result.
Broadcast TV will get slammed, according to Borrell, down nearly 30%. Radio will be off 10%. Only cable TV and cinema will escape the color red, according to the new report.
Total automotive ad spending in 2018 is down 7.3%, to $34.4 billion. For 2019, Borrell is forecasting a 3.4% bounce-back. Over five years Borrell is projecting growth averaging 1.7% per year. And nearly all of that increase will go to digital. Sixty-seven of all automotive advertising now goes to highly targeted digital media, stealing from traditional print and broadcast that Borrell says are considered less efficient.
Dealers are now spending 41% less to advertise a new car than they were five years ago. It’s gone from $888 in 2012 to $518 this year. It’s now easier to hit a specific target, which means dealers can be more efficient with their ad buys. “Mass” media still plays a role in branding messages, but even that’s now being challenged as video advertising migrates to the digital environment.
In short, automotive advertising forecasts for 2023 point to striking changes in future spending. Borrell’s new model predicts that, five years from now:
- Print advertising will be significantly lower than 2018 levels
- Broadcast TV advertising will be significantly lower
- Radio advertising will be lower
- Cable advertising will be higher
- Digital advertising will be significantly higher.
The advertising piece of overall marketing expenditures is likely to remain in the $35-37 billion range, but marketing services are likely to get far more attention as manufacturers and dealers spend more time and money on their “owned media” channels.
I wrote a piece on How to Sell to the Millenial Car Buyer: A $1.4 billion Market, Check It Out here-http://bit.ly/2Jjjmwi
While I have no reason to doubt his sincerity, TheBigA’s insistence that he was not influenced by advertising strikes me as just a little bit strange.
Sophisticated agencies have know for decades that the most effective advertising works as it is regularly, through reach and frequency, tugging at the UNconscious, emotional capacities of listeners/viewers through the application of extremely sophisticated production and copywriting techniques..
Those who insist on their own intellectual capacities as being the defining elements in their decision-making processes have yet to do their homework.
I’m not “insisting” on anything. Just giving my personal example. This article says ads are bought by dealers, dealer associations, and manufacturers. I bought from a dealer outside my market, so if they bought advertising, I wouldn’t see it. I bought from a manufacturer that I was pre-sold on, having owned that car previously. If radio sales people are trying to pitch dealers or manufacturers, it might help to know the context of their pitch. That may have something to do with why auto advertising is “in the tank.”
I just bought a new car. I didn’t buy it based on advertising. I did a web search for the car, options, and price. The search listed all the cars in my area, and I went to the dealer that had the specific car I wanted, and bought. I’d never been to the dealer before, and drove a half hour to get there. I doubt I’m the only one who shops this way.
Yeah…that’s called advertising.
Particularly as it applies to car dealers, radio has been running the same six spots for EVERY dealership that is willing to buy a week or two of spawts every couple of months. They have been running this lazy scam for decades – more than four.
“Honest Al’s Auto-Mart will not be undersold. We guarantee the BEST sale prices, The BEST service and the BEST quality. So, come on down and make Your BEST deal!”
These are the “puker” ads.
And there is still some confusion on the part of radio AND the dealerships?
Obviously.
Part of the problem is the radio groups that got into digital themselves… and now they’re pushing digital more than radio because they never figured out how to do radio advertising right in the first place.
The dumb spot jockeys in Radio and TV were outsmarted by Digital(Not hard to do) and these $$are gone forever..