Auto Advertising Stuck In Park
October 7, 2008 at 6:11 AM (PT)
Like the big DETROIT automakers, car dealers that spend a bundle on advertising are slashing their budgets as they struggle with the economic downturn, reports TODAY's NEW YORK POST. The dealer pullback has serious implications for the ad business, which was already suffering from an auto slump brought on by the "Big Three." Ad execs, especially those at firms that cater to dealerships, said they have never seen the dealers so strapped.
"It's worse than I've ever experienced," said PAUL POTRATZ OF POTRATZ PARTNERS, a SCHENECTADY, NY firm that handles automotive marketing for 45 dealers around the country. "Even in the '70s it wasn't this bad with the gas crunch. It's kind of scary."
Small and mid-size agencies that have come to count on business from local dealerships are also in for a rough ride, execs said. XHANG CREATIVE Pres./CEO DOUG ZANGER, who's agency specializes in radio ads and digital audio, was stung when his firm lost a local auto account.
In the first four months of this year, dealer ad spending fell more than 4%, to about $2.35 billion, the NATIONAL AUTOMOBILE DEALERS ASSOCIATION said. Last year, dealers spent nearly $8 billion on advertising, with much of that flowing to newspapers, TV and radio.
Meanwhile, dealers are having to advertise more to sell every car. The average dealer spent $626 on advertising for every new vehicle, a 5.5% jump from the same period last year, according to the dealer association.