A new report forecasts that auto dealers will boost their total advertising spending by 7.2 per cent in 2011 with the biggest boost in online media. The report, “2011 Local Automotive Advertising Outlook” from Borrell Associates predicts an increase from $21.1 billion in 2010 to $22.6 billion this year.
The report’s authors predict an increase in auto advertising across all medium except yellow pages. The largest increase is for movie theatre advertising (up 98 per cent 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, say the authors, as dealers migrate more towards social media and mobile marketing.
An executive summary is available for free, but the full 27-page report provides in-depth analysis and charts of 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.
“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,” write the report’s authors.
The authors say the shake up in the auto dealer industry has also changed the marketing mix, adding that there are 17,000 fewer new and used car dealerships than there were just four years ago. “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,” write the report’s authors.
The author’s also found that 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.
To download an executive summary or order the full report visit: www.borrellassociates.com/
