Auto dealers, one of the most important local advertising segments, will be shifting ad dollars away from broadcast TV and cable and increasing their spending on digital media, including streaming video and over-the-top, according to a new report from Borrell Associates. TV spending by auto dealers fell 11.2% in 2021 and Borell expects to see another 6% drop to $568.3 million 2022. The declines come after a 26% plunge in 2020.
Automakers spent an estimated $2.67 billion on national television in 2021 through Nov. 30, a 20% increase year-over-year, according to iSpot. tv. But TV ad impressions were down just slightly to 301.6 billion YTD compared to 302.1 billion for the same period in 2020.
Automakers spent almost $12 million more this September on national television ads compared to a year ago but impressions were down, according to iSpot.tv. The estimated spend in September 2021 was $239.5 million compared to $227.7 million in September 2020.
What a difference a year makes. Automakers spent an estimated $238.6 million on TV in April 2021 — an increase of 148% year over year, according to iSpot.tv. Many large advertisers pulled back on TV last April, especially with live sports completely absent due to the COVID-19 pandemic.
Ford Motor Co.’s new president and CEO Jim Farley hit the ground running Thursday, announcing a laundry list of goals and organizational shifts.
Automakers spent $223.5 million on national linear TV advertising in July, up nearly 18% compared to June, according to iSpot. However, spending continues to be lower compared to a year ago due to the pandemic and its effects on the economy. Spending in July was down 28% vs. a year ago and impressions (28.7 billion) were down 10%.
Advertising from the auto industry is accelerating quickly amid the end of stay-home orders in many states and subsequent dealership reopenings. The spend during the week of May 24 was nearly double where it was just three weeks earlier, according to MediaRadar.
Automaker TV ad spending dropped a staggering 71% in April compared to a year ago, and impressions were cut in half. The estimated TV ad spending was $148.4 million — compared to $495.8 million in April 2019, according to iSpot.
Before COVID-19 reared its ugly head, automakers spent close to $456 million dollars on TV advertising in the first quarter, according to TV analytics firm Alphonso. Toyota led the pack, outspending its nearest competitor by $12 million.
Major TV advertising categories have seen an 8% decline in 30-second commercials on top TV networks for the week of March 23-29 versus the same week a year ago, according to Kantar, due to cutbacks resulting from COVID-19. While many national TV advertising categories such as restaurants, travel/tourism, and retail have declined as expected due to COVID-19, other categories including automotive, insurance and household products have been climbing.
Live TV watchers were blitzed with Labor Day sales ads from auto dealers. But the deluge actually began back in August. Facing declining auto sales, dealers geared up for promotions in August. While digital advertising has become a growing part of auto companies’ media plans, linear TV remains their largest spend category
Sales of new cars and trucks rose steadily from 2009 to 2016, the longest growth streak since at least before the Great Depression. But sales to individual buyers are now falling. “We are turning down cars and are being more picky on the cars we stock,” says a New York dealer. “We just can’t take more. We’re full.”
A dismal first quarter had auto spot spending down nearly 10% compared to the prior year because auto ad spending moves in lockstep with actual sales of cars and light trucks and those have been trending down. However, even though auto sales are down, they are still at a pretty high level and if 2019 results come in at 16.9 million as predicted, that’s up over 60% in 10 years.
In his 32-year career at Ford and then Chrysler, Iacocca helped launch some of Detroit’s best-selling and most significant vehicles, including the minivan, the Chrysler K-cars and the Ford Escort. Iacocca reached a level of celebrity matched by few auto moguls. During the peak of his popularity in the ’80s, he was famous for his TV ads and catchy tagline: “If you can find a better car, buy it!” He was 94.
Auto dealers, local dealer associations and manufacturer ad spending account for 76% of total advertising for the auto vertical.
Advertising expenditure by automotive brands will grow by 0.8% in 2019, down from 1.5% in 2018, according to Zenith’s inaugural Automotive Advertising Expenditure Forecasts, issued today. Total auto expenditure this year will be nearly $35.8 billion globally.
Panelists at the TVB Forward conference say broadcasters should be worried as the marketing and advertising budgets of auto makers and dealers are a function of the vehicle sales. The more vehicles sold, the larger the budgets.
Ford has ended nationwide advertising for the Fiesta, Focus, Fusion and Taurus and also is dialing back spending in certain markets — even though the Fusion will stay in showrooms for now.
According to most pure-play station groups, this recent sluggishness by auto dealers has been replicated in their automotive advertising sales, which typically account for around a quarter of their spot revenue. However, some group execs see things improving as the year progresses.
Through the first three days of the Winter Olympics, carmakers have been the big spenders on NBC — with traditional TV viewing down. Toyota has spent $5.12 million and Chevrolet has spent $4.4 million for Thursday through Sunday, according to iSpot.tv.
Toyota recently unveiled four ads for the same car — its flagship Camry. Each ad speaks to a different audience, offering a fascinating glimpse into how race and culture figure into American advertising today.
In the midst of the 2009 recession, Hyundai made a unique promise: Lose your job and you can return your car and get your money back. Today, as the Korean automaker looks to overcome a sales slump, it is offering several new pledges to U.S. buyers aimed at responding to today’s consumer demands, like transparency and convenience, that have accelerated in the Amazon era.
Auto dealers and manufacturers constitute the largest subcategory of automotive ad spending. Dealers and manufacturers are projected to spend $12.06 billion on local advertising in the U.S. during 2017, according to BIA/Kelsey.
Automakers in the U.S. are ramping up holiday sales promotions ahead of Black Friday, aiming to clear out bulging inventories of unsold cars and dispel investor doubts about consumer demand.
Steve Szakaly, chief economist for the National Automobile Dealers Association, predicted a downturn in car sales over the next five years, but said that’s not necessarily bad news for local television because auto dealers and OEMs often increase their advertising expenditures in order to lift sales during a downturn.
Hyundai’s reign as the NFL’s only automotive sponsor ended Wednesday when Ford announced a three-year deal as the official truck of the NFL. Hyundai’s four-year deal began last year when the Korean brand replaced General Motors, which had sponsored the NFL since 2001.
Ford and Nissan posted their biggest U.S. sales declines in years in August as the industry fell 3.5%. Volume at GM, Honda and Toyota also dropped, while Fiat Chrysler advanced. The SAAR fell to 16.97 million, casting further doubt on the industry’s chances of extending its six-year winning streak.
Overall industry sales were expected to slip 5 percent to 1.5 million vehicles, according to J.D. Power and LMC Automotive. Total sales through August are now expected to be flat compared to a year ago.
U.S. new-vehicle sales are expected to decline in August, decreasing the industry’s chances of beating the full-year record it set in 2015.
Automotive companies are dominating NBC’s Olympic TV coverage so far. Four of the top 10 Olympic spenders on NBCU’s NBC broadcast network and its cable networks are automotive through 10 days of the event, according to iSpot.tv. Overall, automotive companies have spent $132.9 million so far.
For six years now, auto sales have been booming, and auto advertising right along with them. But that’s unlikely to continue. Borrell Associates’ Kip Cassino and Corey Elliott talk about why they’re projecting the slowdown, how dealer and dealer association goals differ, and what trends media buyers and planners should be watching in the industry.
During pre-election peaks when political ads make up more than a quarter of all commercials, auto ads take a steeper hit than others, appearing 50% less frequently than usual. Kantar Media says the only category of commercials unaffected by the amount of political ad spending is the slice of airtime that stations reserve for their own promotions and public service announcements.
As long as gasoline prices are low, there is no stopping “go” when it comes to car sales. Thanks to compact cars and SUVs, autos have been moving off lots as fast as they come in, and they might as well keep the engines running this month, too. According to J.D. Power, consumers may spend as much as $32 billion this month on new vehicles, nearly $3 billion more than in February last year.
Auto advertising continues to move online with Standard Media Index reporting that digital media’s share of the category rose 20% in 2015 while spot TV’s slice was down 8%. A large percentage of that digital money is going to auto verticals and a few broadcast groups have opted for an “if-you-can’t-beat-’em-join-’em” approach and moved into that market as well.
There’s a good reason why we see plenty of auto ads during TV news and sporting events — the audiences are full of people likely to by a new car. According to a J.D. Power survey of new car owners, 46% watch TV news or news programming and 42% watch sports, making them the top two types of programming among this group. Those two were well ahead of sitcoms, which came in third at 33%. Dramas followed at just 28%.
In the past two weeks, no fewer than 13 auto marques (including Honda, above) have launched new TV campaigns designed to move the last of the 2015 inventory off the lot. In fact, the only top spender that has yet to kick off a year-end sales push is Toyota; expect increasingly manic spokeswoman Jan to get into the spirit of Toyotathon by donning the Santa hat in early December.
Car sales hit a 14-year high, prompting automakers to hike ad spending to entice buyers into their showrooms. However, those ad dollars are increasingly going to online media.
Toyota Motor Corp.’s global sales for the first three quarters totaled 7.498 million vehicles, down 1.5% from the same period the previous year, according to numbers released Monday. Volkswagen AG of Germany sold 7.43 million vehicles, almost unchanged from the previous year, while GM sold 7.2 million vehicles, down 1%.
Since hitting record low sales in 2008, the auto industry has surged. That’s good news for local TV says Jason Stein of Automotive News. Local dealers are spending up to six times what they did in 2009 on TV advertising, he said. And with the market so “red hot,” car manufacturers, which usually spend on national ads, are also buying more local TV.
More and more stations and groups are taking the initiative in securing and growing the crucial auto category at a time when stations’ share of ad marketing dollars are not keeping pace with booming auto sales as they have in the past. One tack is an increasing interest in programmatic buying and selling, while another is to aggressively follow auto dollars into the digital realm. Publisher’s Note: Deep Dive is a new, branded feature of TVNewsCheck.com. It is offered free today as a sneak preview of the kind of in-depth content soon to be offered in the our Premium Member Center. To read the first part, click here.