Borrell Forecasts 'A Radical Shift' In Auto Ad Marketing
May 23, 2013 at 7:24 AM (PT)
In a Client Memo about auto advertising, BORRELL AND ASSOCIATES writes, "What we’re seeing is a radical shift in the way dealers, dealer associations and manufacturers market themselves -- the end result of how consumers have altered shopping habits. We believe these changes are notable not only because of the shifting dollars, but more importantly because the print and broadcast industries rely so heavily on the automotive category. The average print or broadcast outlet gets 15% to as much as 45% of its revenue from automotive. Big change in the wrong direction could be devastating."
For radio, BORRELL's projected 2013 auto dealer ad spending, compared with previous years shows radio's 2011 revenue at $646.52 million, a 4.6% share of ad dollars. 2012 was down up to $658.65 million, but down to 4.2% of ad dollars. However, 2013 wasn't kind to radio, with a projected $570.25 million being spent, with a 3.3% share of ad dollars. That's down 13.4% from 2012.
BORRELL concluded, "The reason for these changes is that the manufacturers decided last year to trim broadcast and print in favor of digital advertising. They learned through research that online inquiries -- especially those generated via mobile devices -- were leading more prospects to dealerships than other ad choices. They found that more prospects were coming to showrooms with their decisions already made after visiting manufacturer websites."
What should radio do? BORRELL suggest, "Form a task force. Something big is happening. The good news is, auto advertising will be up 10% this year. The bad news is, local media companies with great dealer relationships will find themselves short-handed if they don’t also have great products suited to what the dealers need today. An internal meeting of the minds is in order."