Auto: Ad spending revs a little lower
No. 2 ad category will still see gains but not as steep
March 26, 2013
Auto advertising has revived right along with auto sales over the past two years, with 2012 spending up more than any other top-10 ad category.
But with a slight slowdown in the pace of car sales this year, advertising may slow along with it.
Analysts say that the auto advertising boom is reaching its final stages. Though the category will continue to gain modestly in the coming year, it won’t keep the same pace as it did in 2010 through 2012.
“Now that we have returned back to average SAAR [seasonally adjusted annual rates] levels, we believe the catch-up growth driven by the auto category is in the later innings,” says a recent report from Nomura.
Auto sales to start the year have been slower than the same time last year. In February sales rose 3.7 percent, according to Autodata, compared to a 14.1 percent rise in February 2012.
Bloomberg Industries reports that the average number of days needed to sell a car hit its highest number since August 2009, during the height of the recession.
And Honda’s sales actually dropped 2 percent in February compared to the previous year.
Analysts attribute the drop to several things, including concerns about the economy accompanying the sequester, the round of government spending cuts instituted last month, bad weather that hampered potential sales in the Northeast, and one fewer sales days this year than last, which was a leap year.
To draw in buyers, dealers are offering more incentives, and in fact last month incentives hit their highest level since 2011.
Sales are still on pace for at least 15 million this year, most analysts predict, the best number since the industry collapsed in 2008.
But already manufacturers have begun pulling back on their advertising.
Tier 1 manufacturers, including General Motors, Ford, Chrysler, Honda and Toyota, increased their ad spending by 23 percent during the first quarter of last year but by just 2 percent during the second half of the year, according to Kantar Media data.
Dealers began spending more to offset the pullback by manufacturers. Total ad spending was up 7 percent in the auto category last year, to $14.84 billion.
Dealership spending increased 14 percent, to $5.98 billion, while manufacturers rose by only 3 percent, to $8.6 billion.
“Some of it is the timing of the number of new model introductions because that typically is a catalyst for higher spend,” explains Jon Swallen, chief research officer at Kantar Media North America.”
“Those are typically supported by larger-than-average budgets, and there were fewer of those in the back half of the year.”
Bus ads for ‘Red Band Society’ get the heave-ho
‘The Biggest Loser’ sinks to a new low
Big crowd for Ken Burns’ ‘The Roosevelts’
For NBC, another winning season
Philly: Strong start for Eagles lifts TV
‘Forever,’ actually, probably not
Rachel, I did something in the past I regret
Tell us, which new fall TV shows will survive?
Best tube bets this weekend
Cable overnights: ‘For Better’ hits one-year high
FX renews ‘Tyrant’ for season two
Goodbye TV Guide Network. Hello Pop.
Study: Only 40 percent trust the media
- Sue Frogley becomes global commercial director at SMG
- Bev Yehuda becomes SVP of operations at D S Simon
- Kristin Hambelton becomes CMO at Evariant
- Craig Marks and Tom Morrissy out at Spin Media
- Brian Allers becomes VP of the local division at TVB
- Seven join the talent lineup at Back9Network
- Darrell Hammond becomes announcer on NBC's 'SNL'
- Aubrey Plaza joins Lifetime's 'Grumpy Cat's Worst Christmas Ever'
- James D’Arcy joins the cast of ABC's 'Agent Carter'
This week’s cable ratings
This week’s broadcast ratings
This week’s top movies, songs and books
This week’s daypart ratings
This month’s new media traffic data
This week’s younger viewer ratings
Needed ASAP: Media buyer in Fort Worth
Job for media buyer/planner with DC PR agency
Programmatic media buyer job in York, Pennsylvania
Media buyer opening in Las Vegas
Immediate opening for a media buyer/planner