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| At $22.6 billion this year, automotive is the second-largest advertising category (behind general merchandise stores). This 27-page report, 2011 Local Automotive Advertising Outlook, offers 20 charts and graphs detailing the underpinnings of what’s happening with this important category. The headlines: We’re forecasting an overall increase of 7.2 percent, from $21.1 billion in 2010 to $22.6 billion this year. Every medium except yellow pages is seeing an increase in auto advertising this year. The largest percentage increase goes to cinema advertising (up 98 percent, to $246 million), but the largest dollar increase is expected for online media, which is projected to be up 11 percent, from $6.6 billion to nearly $7.3 billion. Online now dominates nearly one-third of all auto advertisers’ budgets and is likely to grow as dealers migrate more toward social media and mobile marketing. This report draws on Borrell Associates deep-dive research into automotive ad-spending and includes a eight-page appendix detailing auto advertising across manufacturers, new-car, used-car and private-party expenditures. It also draws on research from the National Association of Automobile Dealers, Manheim Auctions, Scarborough Research and Borrell Associates’ ongoing surveys of more than 6,000 local advertisers. |
Additional Information
EXECUTIVE SUMMARY
The heyday of automotive advertising may not exactly be gone for good, but it sure feels like it. At $22.6 billion in total ad expenditures this year, automotive will remain the second-highest offline advertising category (at $15.3 billion, behind general merchandise stores) and the third-highest online category (at $7.3 billion, behind general merchandise and real estate).
The pre-Internet era of TV and radio scooping up all the branding dollars and newspapers and magazines collecting the “Big Sale!” dollars have faded. Dealers have fallen so much in love with interactive media that they’re earmarking 32 percent of their ad budgets for it - more than they spend on any other medium. Those dollars are going principally to banner advertisements and paid search, with additional non-advertising expenditures paying for website design, inventory database management, lead-generation fees and search engine optimization.
The efficiency of the Internet to meet the car-buying public isn’t the main reason advertising channels have changed. The economy has shaken the basic underpinnings of the entire dealership system. In the past four years, an average of 86 new- and used-car dealerships have closed every week. That’s 17,000 fewer advertisers, with a few thousand more expected this year. What’s worse is that the biggest advertisers in the bunch - the mega-dealerships created during the consolidations in the 1980s and 1990s - have been hit hardest. And a new phenomenon - where slightly-used cars are in higher demand than many new cars - is rippling through the marketplace.
There’s a trickle of hope as car sales bounce back and advertising responds accordingly. Last year the total number of new vehicles sold rebounded to 11.6 million after four years of steep decline. They are projected to hit 12.6 million this year, an 8.6 percent increase.
What’s in store for new- and used-car automotive advertising? We’re forecasting an overall increase of 7.2 percent, from $21.1 billion in 2010 to $22.6 billion this year. Every medium except yellow pages is seeing an increase in auto advertising this year. The largest percentage increase goes to cinema advertising (up 98 percent, to $246 million), but the largest dollar increase is expected for online media, up 11 percent this year, from $6.6 billion to $7.3 billion.
Our ongoing surveys of local advertisers indicate a continued high interest in online media. In fact, auto dealers are proving to be the most aggressive of all advertisers when it comes to social media and mobile media. Thirty-six percent of them claim to be familiar with mobile advertising opportunities, twice the rate of other local advertisers.
