Ryvicker Sees Auto Ad Growth

Marci Ryvicker

While some broadcasters have pointed to improvement in the auto advertising segment over the last couple of quarters, WELLS FARGO’s MARCI RYVICKER predicts even more room for improvement, especially for traditional media platforms, reports TELEVISIONBROADCAST.COM.

"With auto being one of the largest ad categories in the U.S., its year-to-year growth or decline tends to be significant," she wrote. "We see five catalysts in 2010 that could drive H1 growth in this meaningful category:

We believe that expectations are high, and rightly so. As auto comprised approximately 15% of broadcast ad revenue in '09 versus historical levels of approximately 25%, we believe there is still room for potential upside.

1- TOYOTA’s recent ad campaign, which has been scheduled for MARCH 2nd through APRIL 5th, may likely be extended;

2- The piggy-backing of other automakers, particularly GM, FORD, CHRYSLER and HYUNDAI, which together comprised approximately 52% of '09 auto unit sales versus TOYOTA at approximately 17%;

3- GM’s reinstatement of 661 dealerships -- out of a total of 1,100 closed in mid-2009;

4- Easy prior-year comparisons -- auto advertising was down roughly 50% in H1 2009; and

5- The Olympics, which has historically been an advertising 'haven' for auto makers.

"While all traditional media are likely to benefit, we view TV broadcasters as having the most potential upside to estimates, followed by radio, then local cable and lastly outdoor," RYVICKER wrote. "We believe that expectations are high, and rightly so. As auto comprised approximately 15% of broadcast ad revenue in '09 versus historical levels of approximately 25%, we believe there is still room for potential upside. We anticipate that incremental auto ad spend could result in several hundred basis points of additional top-line growth -- for the TV broadcasters, a rising tide lifts all boats."

[If auto advertising is as important to radio as we all think it is -- what is your station doing to bring more of it back to your airwaves? Is contesting the answer? Remotes? Share your thoughts below.]

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