7-31-13
By all accounts Automotive dealers have used radio as one of its many advertising outlets during its resurgence over the last 18 months. Most radio companies say auto is strong and has helped them inch their own revenue up, year over year. Historically automotive has been radio's biggest category, often dominating radio station inventory on Thursday's, Friday's and Saturday mornings. If you believe a new Borrell report, that's changing and changing quickly. The question is are you still throwing up a banner ad for your automotive clients or do you really know how to pitch them digital?
Borrell's 2013 Automotive Outlook Report concludes auto advertising will be a $32.8 billion category this year, up 2%. "Car sales are up 8%, rebounding to an estimated 15.6 million vehicles and approaching that of pre-recession years when 17 million cars were sold." However, the report says automotive advertising is no longer "an old reliable seesaw for local media." Borrell says radio will see a 15.9% decline in advertising this year. While not as big a decline as Newspaper in the report (down 29.3%) or TV (down 16.7%), nearly 16% is still huge and goes directly against what we've been hearing so far this year from radio operators. Borrell predicts online and mobile advertising to be up 18.7%. Borrell says within five years, annual spending by dealers and manufacturers on digital video advertising will go from $2 billion to more than $9 billion ? most certainly at the expense of local radio and TV.
The latest Borrell study says automotive advertising on the radio will go from $1.7 Billion in 2009 to $919 million this year while online advertising goes from $5.8 Billion to $14.3 billion. The report says most of these changes will take place through alteration of co-op programs ? emphasizing digital spending above other media choices and it is likely to persist for several years. "It represents a true sea change in the way auto marketers use media to sell their vehicles, based on solid information gained from research as well as their own websites."
Borrell also breaks down the total projected share of ad spending for new vehicles in 2013. Online is projected to have a 41.5% share. Broadcast TV is at 17.8%. Newspaper is projected to have a 13.5% share. Radio comes in at 3.3%. On the dealer side, it's even lower. Borrell says dealers choose radio only 2.7% of the time compared to online at 48% and newspaper at 21%.
Borrell also makes several recommendations on how you can improve your chances of getting more revenue as auto shift more toward digital.
Educate Auto Dealers.
Whether you?re on the buy side (agency) or sell side (media), this can be competitive advantage. We?ve found that agency and media people understand trends better than the advertisers themselves. Car dealers are too busy selling cars and managing the business and aren?t likely to know much of the information
contained in this report. Empowering reps with that knowledge will help them gain the ear ? and confidence ? of local dealers. (NOTE: Don?t try to educate them in the same room; dealers are highly competitive with each other.)
Get Past Run-of-Site Banners.
In the digital media race, untargeted banners are a losing horse. This report forecasts a rapid decline, which is actually a continuation of a trend that started several years ago. Dealers are migrating quickly to other, more effective forms of digital media. (NOTE: Those who continue to sell ROS banners
run the risk of being viewed as ?old? media.)
Build a Bullseye.
Targeted advertising in any form ? especially online ? will generate a better return on investment. Selling cars is all about getting high-quality leads. Dealers are looking for audiences who possess the highest potential to purchase.
Get Creative.
Social media is playing a significant role for manufacturers, and that?s likely to trickle down to dealerships. Become experts on how this works, and bring creative ideas to dealerships for contests and other promotions that wrap traditional and digital media together in a way that drives qualified leads. (NOTE: The more qualified the lead, the more valuable the promotion to the dealer.)
Study the Vulnerabilities of Existing Digital Media Companies.
Autotrader.com, Autos.Yahoo.com, Cars.com, Dealer.com, Craigslist and others may well be considered ?old media? within the emerging new media channel. All were built on the original model of the Internet that involved listings, traffic and exposure. While all are still relatively strong, they may also be encumbered by those models and find it difficult to adapt to the new social and mobile environment.
Challenge Internal Thinking.
New media is more complex than ever before. Don?t believe that all of the knowledge can come from within even if you have internal ?experts.? There are plenty of bright minds at other agencies or media companies, local dealerships, or at consultancies whom can help you build expertise quickly.
For more information about this report visit www.borrellassociates.com
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