December Auto Sales Rise, Will Ad Dollars Follow?
Gilford Securities Analyst Sees Auto Ads Increasing
January 4, 2011 at 4:00 AM (PT)
In what could be great news for radio, DECEMBER auto sales were at their strongest pace in five years. Auto advertising is traditionally a big money maker for radio, but not one manufacturer landed in MEDIA MONITOR's 2010 Top 10 list (NET NEWS 1/3). Things picked up in DECEMBER, with CHRYSLER-JEEP-DODGE landing at the #2 spot and HONDA as the #5 radio advertiser for the month.
"Year-end deals and pent-up demand, even amid a wobbly economy, helped fuel car sales of about 11.5 million last year," reports THE NEW YORK POST, "up from sales of 10.4 million in 2009. The estimates yesterday came ahead of today's announced sales results. If the estimates hold, it will mark DETROIT's first annual sales increase since 2005."
If the actual and prospective foot traffic even partially reflects Autobytelâ€™s level, the car companies and dealers are likely to pour large amounts into radio ads.
"Consumers have found a new buying behavior in uncertain times," said auto analyst JESSE TOPRAK of TRUECAR.COM. "They're saying, 'I'm not going to get a crystal-clear picture of what's going to happen to my job or the economy -- but I need a new car, now.'"
FORD and GENERAL MOTORS both ended 2010 with annual gains. TOYOTA landed in 3rd.
Analyst Jim Boyle Sees Advertising Increasing In 2011
GILFORD SECURITIES analyst JIM BOYLE is bullish on increased auto ad spending, noting "The popular car website, AUTOBYTEL, recently revealed a remarkable amount, 83% of the public may buy an auto in 2011. 44% said they’re looking now. 22% will be in the market in six months, with 16% looking in six to 12 months The last four quarters have seen 9% ($341MM), 39% ($231MM), 26% ($336MM) and 19% ($366MM) for Q4’09A, Q1’10A, Q2’10A and Q3’10A, pespectively. If the actual and prospective foot traffic even partially reflects AUTOBYTEL’s level, the car companies and dealers are likely to pour large amounts into radio ads."
"When we polled top private and public execs last summer," BOYLE continued, "they forecast just under 4% yr./yr. rev. growth. Recent comments affirm that expectation, given early 2011 bookings and rebounding ad category strength continuing despite unemployment levels and soft housing. We, too, have a 4% 2011E forecast."