A Key Market Segment Is Turning Increasingly to TV Advertising

Oct 25, 2013  •  Post A Comment

As TV outlets struggle to squeeze what they can out of a tough advertising market, they’re increasingly getting help from one important market segment. Media Life reports that automakers are increaingly relying on television to get their brand messages out.

"A new report from Kantar Media finds that from 2009, at the start of the recession, to 2012, TV’s share of auto ad spending rose by almost 10 percentage points, going from 53.9 percent in 2009 to 63.3 percent in 2012," the story reports. "At the same time, the percentage of auto budgets dedicated to newspapers, magazines and even new media fell."

Said Jon Swallen, chief research officer at Kantar Media: “Local media are extremely important for auto. All dealer spending is local, and manufacturers use local media to tailor lease, APR and rebate offers by market. The diminishment of newspaper and radio audiences has reduced local media options for auto advertisers, driving money to local TV (and web).”

In the three-year period covered by the study, newspapers’ share of auto advertising fell by 6.1 percentage points, magazines were down 2.9 points and online media fell almost one point.

For every car sold, automakers spent $1,268 in 2012. "That’s the lowest number since the Great Recession began, reflecting in part the increase in car buying last year," the story notes. "Car sales were up 14 percent, to 14.5 million. Auto spending was up too, but only by 7 percent."

The report adds: "At the height of the recession, in 2010, car sales declined to under 11 million. Auto advertisers averaged $1,415 on TV advertising for every car they sold that year."

Kantar’s Swallen notes: “Over the past seven years, the number of cars sold annually has ranged from a low of 10.4 million to a high of 17 million. That’s a spread of over 60 percent. During this same period, the ratio of ad spend per car sold has varied by no more than 15 percent. Which demonstrates that auto manufacturers and dealers scale their budgets up or down in lockstep with the sales climate for vehicles."

Media Life adds: "The report does criticize automakers’ tendency to bunch advertising in the same news and sports programming. During the World Series, for example, you’ll see the same ads over and over again for the same cars. Kantar says that this may be ‘undercutting the objective of the creative, which is to make them stand out.’”

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