Auto Sales, Auto Spot Stuck In Low Gear

Car manufacturers are suffering year-over-year losses in vehicle sales, and are sharing the misery with broadcasters.

According to Automotive News, a 2.3% decline in automobile sales in February 2018 overpowered a 1.2% January increase, taking 2018 year-to-date into negative territory, down 0.7% — this after a decline of 1.8% in 2017.

According to most pure-play station groups (as reported to securities analysts during the recent round of financial results conferences), this sluggishness has been replicated in their automotive advertising sales, which typically account for around a quarter of their spot revenue.

But there may be some light at the end of the tunnel.

Scripps reported a 1% loss in the category during 4Q 2017, and according to Brian Lawlor, the company’s local media president, it’s pacing even slower during first quarter 2018. He’s expecting that to change, however. “I think there were a couple of big automotive clients that made kind of strategic decisions to go light in the first quarter and then build on their base for second, third and fourth.”

NBC’s Super Bowl-Olympics one-two punch hit Sinclair especially hard given its thin list of NBC affiliates, so a weak core performance was expected, COO Steven Marks told the analysts.

“With that said, auto in the first quarter will be down, but as we speak today with quite a bit money already booked in second quarter, there is an aggressive positive pace so far for the automotive category on our station list.”

Gray CFO Jim Ryan reported soft 4Q auto sales — “down mid-single digit,” and, despite considerable exposure to NBC’s big 1Q events, a disappointing first quarter. He said there is no one single major factor to point to. “[A]s you go through literally the thousands of accounts … in a quarter in the auto category, what it is, ultimately, is that there’s … more people taking a little bit off the table than people putting a little bit on the table.”

At Nexstar, auto has gone down since the beginning of the year. “I think first quarter, we’ll see automotive a little softer than in 4Q,” said CEO Perry Sook. “I think that automotive spending at the local level, by-and-large, kind of stayed away from Olympics, maybe a little bit more than they have in quarters past or years past.”

Tegna CEO David Lougee said his 4Q automotive was flat and has remained flat so far this year. He agreed with Sook on NBC’s big events. “I can tell you actually that auto was a much lower percentage of Super Bowl and Olympics than in years past.” He said the category has been a drag on overall pacing numbers.

Meredith’s conference call was dominated by talk of its recent acquisition of Time, and the topic of television automotive advertising was only briefly touched upon. But the automotive highlight reported by Steve Lacy was the standout stat of the entire conference call season — he said 2Q pacing for the category stands at 8%.

While the big December tax cut bill has already begun benefitting corporations, Gray’s Ryan said that it will not lead to the sudden accumulation of big ticket item cash, either in direct tax savings or in trickle-down among the consumer class.

“So I think it’s going a take a while,” he said, “but I think it does speak to later this year or going into next year that the tone in Mid-America probably picks up a bit.”